Rideshare drivers, you are already obsolete.
Even as the cities and the state fight over regulating ridesharing services, you might as well get those legs ready for a future on the pedicabs. I’ll explain more on that in a moment. For now, though, you might see gold in your pocket as the hip hoards descended on Austin for South by Southwest, the city cratered this week to give Uber and Lyft a sweetheart deal to work Austin-Bergstrom International Airport for 45 days for a mere $2,500 fee. A couple of drunk-ride, surge-pricing fares ought to take care of that.
Last week, it appeared Lyft would be the only ride-booking company working at the airport during South by Southwest this year after the company signed an agreement that would have given the city 10 percent of all fares, with a minimum of $25,000 for the year. Uber had declined to sign a similar agreement.
For the drivers with dreams of filling your pockets with the expendable income of the South-bys, keep in mind that your long-term future as a part-time cabbie is as much in doubt as the traditional cabbies endangered by ridesharing apps. Driverless cars are on the horizon, according to a new report from McKinsey Global Institute, as recapped by the Detroit Free Press.
The first places we will see smaller autonomous vehicles likely will be in the growing networks of ride-sharing and car-sharing ventures such as Uber, Lyft and ZipCar. McKinsey’s research shows that the number of people who are members of such services has quadrupled worldwide to 4 million over the past four years.
Okay, my boy Elroy, you may wonder how we got to the twenty-first Century without our flying cars or Marty McFly’s hoverboard. You may think to yourself: I’ll never be replaced as a rideshare driver by driverless car. Driverless rideshares are far in the future. Think again. Google already is planning to do it.
Now there are signs that the companies are more likely to be ferocious competitors than allies. Google is preparing to offer its own ride-hailing service, most likely in conjunction with its long-in-development driverless car project. Drummond has informed Uber’s board of this possibility, according to a person close to the Uber board, and Uber executives have seen screenshots of what appears to be a Google ride-sharing app that is currently being used by Google employees.
Back down to the present day, where our mistakes can only be attributable to human error, even the business magazine Fortune is seeing the confluence of Austin weirdness, SXSW madness and the governmental conflicts that make the Legislature the place where Business does Bidness.
The local cab system in Austin, Texas, can’t support the flood of people in town during the annual South by Southwest festival. The city’s old-fashioned solution—pedicabs—does little for those staying at far-flung hotels and Airbnb rentals. Transportation has always been a problem during SXSW. There’s an obvious solution, of course: ride-sharing and taxi apps like Sidecar, Uber, Lyft, Hailo, and Flywheel. They’ve been around for the last three years, but this is the first year they’ve been legal in Texas.
“In Austin, a city where people enjoy their libations, the mayor has resisted [Uber] more than almost any other city,” said Bill Gurley, an Uber investor and University of Texas alumnus, during a keynote interview. Later, Lyft CEO Logan Green noted that his company has always participated in SXSW, including offering piggyback rides in 2012, but this year is the first time it can actually offer its service to attendees.
The need for more transportation options in Austin was abundantly clear at 2 a.m. on Saturday night of the festival, when pricing for an Uber cab surged to five times the normal cost.
I find it difficult to believe Austin is Uber’s worst offender when the company just pulled out of San Antonio because of disputes over criminal background checks for drivers. The company’s drivers will be able drop passengers off in San Antonio but not pick them up. The AT&T Center is exempt because it is county property.
Seven months ago, when Houston passed an ordinance requiring transportation network companies to have city-reviewed, fingerprint background checks for their drivers, Uber accepted the provision and continued operating in the city.
When San Antonio passed a similar ordinance (allowing drivers a 14-day grace period to meet the background-check regulation, compared to 30 days in Houston) on Thursday, Uber reps responded by immediately announcing they were pulling out of the city.
Traditional cabbies in Houston and San Antonio have taken Uber and Lyft to federal court, claiming unfair competition that fails to comply with local regulations and is promoted through misrepresentation of their services. Most of the claims already have been dismissed.
U.S. District Judge Vanessa Gilmore decided Tuesday that several issues remain in dispute that require additional consideration and, possibly, a trial.
Her order dismissed all of the taxi companies’ claims except for allegations that related to false advertising – namely, Uber and Lyft’s assertions to the public about their insurance coverages and Lyft’s claims of a donation-based payment model.
“Plaintiffs have adequately pleaded that Uber’s statement’s regarding insurance could have been false or misleading … because the type of insurance policy held by Uber is not the same as that held by cab companies,” the 39-page order said. “Lyft lacks commercial auto insurance like cab companies.”
If fighting with cities and cabbies wasn’t enough, Uber still faces criticism of its surge-pricing policies that sometimes surprise riders with high bills even though the company app estimates the cost before the ride. In New York, a new company called Gett is taking on Uber by promising no surge pricing. That might be appealing to a Houston woman recently hogtied by Uber at the Houston Rodeo.
Patricia Clark said she and her friends decided to use uber to get to the Houston Rodeo BBQ Cook-Off on Friday. According to Clark, the service charged them about $60 for the ride to the event but more than $500 for the ride back to Humble.
“Nobody in their right mind would step into a car knowing that it was going to cost them $500 to go 30 miles,” said Clark.
On more than one occasion, I’ve had a traditional cabbie jack up my fare by taking the long way around a city. Even when I’ve told the cabbie they’re going the wrong way, I’ve gotten excuses like: No, there’s construction, or No, this way is faster. On my first business trip to Boston, the cabbie at the airport yanked my bags out of his trunk and threw them onto the sidewalk after I gave him the address of my hotel, which, unbeknownst to me, was just a mile from the airport. Imagine that South Boston accent as the cabbie said something like: “I didn’t wait in no @#**!! line for a !!&$## hour for a %#@!! three-dollar fare!” That’s discard the luggage and the passenger pricing. (The airport cab line operator solved the dilemma by putting a rider with a long-distance fare into the cab with me.)
While conflicts exist elsewhere, the City of Dallas has made its peace with the future by adopting Uber-friendly rules.
But the rules set the stage for officials throughout the region to adopt a uniform cars-for-hire policy. And as ride-share companies — Uber, in particular — continue to meet with resistance in some cities, the council action establishes Dallas as a noteworthy marker in the industry’s evolution.
“We have to accept that it’s time for change,” said council member Jennifer Staubach Gates. “All industries have been affected by technology, and transportation now has been affected.”
Dallas has grappled with car-for-hire rules for about a year, after the city tried to crack down on the app-based companies operating outside existing taxi regulations.
All well and good, but this is rapidly becoming the legislative session of Big Centralized State Government. So what do you do if you are a lover of freedom and Big Centralized State Government? You file a bill to put the state in charge of ridesharing instead of the cities. As the Texas Tribune reported:
House Bill 2440 from state Rep. Chris Paddie, R-Marshall, would grant firms like Uber and Lyft statewide operating permits if they pay an annual $5,000 fee and follow various rules. In some cases, such as background checks conducted on drivers, Paddie’s bill would be less rigorous than ordinances approved in some Texas cities…
“As Republicans, we talk a lot about free market principles,” Paddie wrote Friday on Facebook. “This bill enacts those principles and will ultimately empower you, the consumer.”
A quick check of a Web site dedicated to ridesharing services tells me neither Uber nor Lyft operate anywhere near Marshall. Apparently, the free market has decided there isn’t a market for ridesharing in Paddie’s hometown. In fact, neither Uber nor Lyft appear to be operating anywhere in Paddie’s House district, according to the cities listed in this Web site.
I couldn’t find much reason for Paddie to be interested in the rideshare fight. I don’t think it could be related to the $2,600 in campaign donations last year from registered Uber lobbyists, because it’s hardly the kind of money that prompts a legislative rideshare. So maybe Paddie really is interested in making free market, central government decisions on behalf of the elected officials of Austin, Dallas, Houston and San Antonio. Or maybe the rideshare lobby needed a legislative sponsor not subject to pressure from his or her local officials.
Speaking of lobbyists, Uber has 26 registered. Lyft has nine. Uber’s highest paid lobbyist is Robert D. Miller, and the highest paid lobbyist for Lyft is Joshua Sanders. Each reports compensation in the $100,000 to $150,000 range.
However the legisltive fight turns out, when you rideshare drivers finally wake up today, remember this is all about the companies. Your days as a driver are numbered. The driverless car is coming. And for the consumer, in the not far too distant future, you driver may be named WALL-E or Chappie or Decker.
But then, would it be all that bad if your rideshare artificial intelligence was Scarlett Johansson.