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Posts Tagged 'cab'

The Future of Rideshare in San Francisco

I’ve wanted to say something and bit my tongue several times, but I have to get this out there. This is an example of tech gone bad and I feel the need to say something about this because while the news writes articles about it they don’t contact someone like me or my Facebook buddy Michael Gumora [the first rideshare driver] to get our input.

Ridesharing/Ride hailing/Uber/Lyft whatever you want to call it is a money pit that’s losing. It’s become something that everyone needs and wants, but it is simply not sustainable because the companies are going after markets that aren’t sustainable to begin with. 

Currently, Uber and Lyft are attacking the public transportation system. The problem with that is in every city in the United States, if not the world public transport is government subsidized. It never turns a profit. Going after a market that doesn’t make money to begin with is a stupid idea and especially when you can’t figure out a way to make money at doing it. 

Let me give you an example. Currently in San Francisco, the home town of Uber and Lyft there’s a major fare war between the two. To be honest in every city there’s a major fare war even if Uber, the most widely distributed rideshare company is the only business in town. They want to pull in riders and give them an awesome price so they’ll buy in and give up their cars.

In San Francisco, giving up your car isn’t too hard to do even if you live on the edges of the city because our SFMTA, as bad as everyone says it is still will pick you up and bring you where ever you need to go. If you need to leave the city it’s pretty easy to get a hook up between MUNI and BART or AC Transit or SamTrans. You can even get a Clipper Card that will work on all of these if you’ve got the money to spare.

Here’s a problem. As I mentioned previously, none of these turn a profit. Uber and Lyft are trying to pull people away from government subsidized transport systems without having a way for themselves to make money. Sure, there’s UberPOOL and Lyftline where you can stack riders together, but that still doesn’t turn a profit for either company.

Neither Lyft nor Uber has made a dime in profit since they started yet they are still getting investors to keep them afloat. Uber even admitted to losing $1,000,000/week just on UberPOOL in San Francisco in order to try and get ahead. The long shot game these companies are pushing towards is driverless cars. OK, I worked for one of the companies testing driverless cars and they’re coming along pretty good to be honest, but currently I’ve only seen a high speed hour and a half video of a car in driverless mode. Cool, it’s very cool, but what happens if there’s a problem with the car at an hour and thirty one minutes? What will be the acceptable failure rate of a driverless car? Once every week? Month? Year? Government will the the one to decide and it’s not going to go well for the companies building the cars. In California the DMV has specified that any company working with driverless cars must hit 4.5 million miles in driverless mode before they can even think of removing the driver, but again, you hit the mark, but how often will a problem pop up?

I asked once and was told that they were thinking of putting a big red button in the back that the passenger could hit if there was a problem. Here’s the problems with that:

  • Have you ever watched cartoons? Big Red Button. Someone will push it…especially if it says do not push unless there is an emergency.
  • People riding in a driverless car will tend to trust the car and not pay attention to what the car is doing. If you’re one of those who won’t trust it you won’t book a ride, but if you do you’re not going to pay attention to what’s going on and just sit there with your glass of champagne and laughing about what the poor people are doing. Seriously, check out this video of what people think driverless cars of the future will be like.

Perhaps I’ve moved forward a bit too fast. We don’t have driverless cars yet even though that’s the future. Let’s step back and take a look at today. Uber and Lyft just aren’t sustainable. Let me explain why. I did a little math today. I went out this morning and drove during morning rush. Two hours and pulled in about $60. For a driver, $30/hour isn’t bad, but throughout the rest of the day it doesn’t stack up like that. During those two hours I gave four rides and Uber lost $32.67 because they now tell the driver what the rider pays and gives a complete break down and they subsidize rides through surge guarantees in certain areas. Lyft does the same thing, but it’s a lot more convoluted in such a way that they can find a way to not pay you the guarantee.

Uber has a flat rate program that it offers some riders that if you google uber flat rate san francisco you might get a sign up page if Uber hasn’t sent you an email offering you the deal. For $40/month all your UberPOOL rides are $2.99 and UberX rides are $6.99 up to a ride that is normally $20. If you take a ride that say costs $25 you’d pay $5 + your $2.99 Pool/$6.99 UberX price. Drivers on the other hand are paid per mile and per minute so it doesn’t affect them and if a driver tells you it does then report them immediately. Because of this Uber loses money. Lyft is competing with them so they lower their prices and also are losing money.

As I mentioned before, neither company has turned a profit. Now here’s where it gets interesting. General Motors has invested half a billion dollars in Lyft and has a spot on their Board of Directors. GM even made an offer to buy Lyft as the news previously reported, but Lyft rejected the offer. GM also purchased Cruise Automation last year that is working on driverless cars. Now Google’s driverless car company, Waymo has partnered with Lyft to provide cars. Google and General Motors have a few extra bucks that Uber doesn’t have and I can just assume that Travis Kalanick is sweating a bit these days. News reports have said that Uber lost $2 Billion in 2015 and between $2.8-$3.8 Billion in 2016. Current reports have suggested that Uber is hemorrhaging $1 billion every three months this year with Uber only sitting on $11.8 billion in actual capital.

The future does not look bright for Uber. I am guessing that Google who likes to toss money around will eventually purchase Lyft and it will be a game over man for Uber. Uber has had too much bad press lately and pulling in riders by subsidizing rides at a loss is no way to stay in business. I personally want to get out of the game because when I started drivers were getting paid $3.50/mile and today it’s $1.15 [or $1.10 for UberPOOL]. Even though Uber is still losing money, the 45,000 drivers who come to San Francisco every day to participate in the rideshare fiasco are starting to turn away, hopefully this blogging thing I’ve been doing for years will finally start to make me some money. 

If you’re a reporter working for a news agency please contact me. I’d be happy to talk to you and I can even hook you up with other drivers who’ve been involved in this for a long time.

A Requiem For Sidecar

Sidecar R.I.P.Today when people talk about ridesharing they don’t even use that word. They say, Uber or Lyft. Those are the big two everyone knows about, but there was a third company. This company started ridesharing where people who had a car could give other people a ride and make money in the process. That company was Sidecar.

Unfortunately, like many technology based companies, Sidecar will be ending its run tomorrow, December 31st, 2015. This saddens me in many ways because it was the first company I drove for and the people there really used to reach out to the drivers. Some of us, like myself were made Captains because of our interest in the company. We were able to give feedback, help train new drivers and host meet ups to answer questions other drivers had. This was something that Uber and Lyft didn’t do. There was very little wall between the drivers and the people who worked at Sidecar. Chances were if you drove for Sidecar you had met someone who worked there.

Sidecar was an innovative company in that it let the riders choose the drivers which for someone like me was great. I was a favorite among many of the riders and for a long time I rarely had much downtime. Then the fare wars started and Uber and Lyft started to drop prices to ridiculous levels. It used to be that if Uber fares were above 1.4x in surge it was cheaper to take a cab. Now if the fare exceeds 2.0x in surge it’s cheaper to take a cab.

The riders started to flock to Uber and Lyft and Sidecar unfortunately didn’t have the market penetration or money to advertise like the others and the riders fell off. They then moved over to incorporating deliveries which was great for drivers for a while, but then other delivery companies came in and the fare wars began again.

Ultimately, drivers needed to make a realistic amount of money to make it worth it to drive for any company and the drivers started to go where the money was. Drivers for Sidecar could set their own prices which in the end caused Sidecar to be more pricey than Uber or Lyft. This left Sidecar with only a handful of die-hard users that remained. I had made many friends and a few even had my phone number and would text me when they needed a ride, but because they were more expensive, even though the riders had more options, price beat out the service provided.

Now that will be gone and I’m sad because I probably won’t see a lot of those people anymore. I won’t have the fun chats or know ahead of time that the person I’m picking up won’t be so drunk that they’re going to pass out in my car or worse. I feel a loss that what could have been a great company from San Francisco has come to an end. Hopefully something will come out of this, but I suspect that 2016 will have many changes to the rideshare industry and gig economy so expect to see some changes here in the near future.

Taxi’s vs. TNC’s

Hey Taxi!I’ve been reading a lot lately of the war between taxi drivers and those who drive for TNC’s [that’s the new name for ride sharing companies such as Sidecar, Uber & Lyft]. Actually, it’s not so much a war between the two as it is taxi drivers voicing their anger to just about anyone in the media who will listen. This is were is starts to get interesting.

The reality of the situation is that the cabbies should be looking at the system they’re operating in and quite a few have started. Approximately one third of all taxi drivers have stopped leasing cabs and started using their own cars with TNC’s, mostly Uber, because they are well known and offer the chance for them to make more money through Uber’s surge pricing. It’s not the TNC’s that are a problem, it’s the cab companies that have to charge the drivers so much in order for them to drive the cabs.

One taxi company owner was quoted asking the question, what’s to keep me from buying a bunch of cars and running my own ride share company? Well, to be honest, nothing. There are actually several that are doing so right now. The owner wouldn’t have to purchase the exorbitant taxi medallions [$250k/car], and they wouldn’t have to provide comprehensive insurance to the drivers as they do now, but they could rent the cars out to drivers who don’t own a car and collect on what they make paying a small percentage to the driver. Cab company owners like this idea.

For the drivers, they wouldn’t have to sit down and take a 7 hour class and test [yes, it’s not a very comprehensive test and they are allowed to consult notes] and they can get started quicker with no outlay of cash from their pocket. To get serious for a moment, what cabbies are taught in the training school is minimal at best and they usually take the test right after the class so what they do after they’ve passed don’t necessarily apply to what they just learned. The cab company owners don’t like that idea.

So in the end you’ve got the cab company owners pushing the drivers telling them how bad all the TNC’s are, when in reality it’s the system that the cab drivers have to work under that is the problem. When the TNC’s started as Ride Share companies there was a lot of anger at these new drivers, but now that many cabbies are moving over to the TNC’s they might be yelling at a fellow driver that’s just decided to switch teams in an effort to make more money.

I haven’t had a cabbie yell at me in months lately and a few have actually talked to me about how they could get into the business. One thing that sets apart cabbies from TNC drivers that I think a lot of cabbies learn quickly is that they’re driving their own car and they can’t treat it like a car they’re renting for a shift. Everything is now on them to keep the car looking nice and they have to make sure the brakes are working and the shocks are in good shape, not the company owners. That’s a new way of thinking for a lot of cabbies, but if it makes them more careful drivers when they’re out on the road then everyone wins in the end.

SideCar.banner

Cab Wars And The Taxi Mafia

Ssssh...I work for Sidecar. www.side.crChange has come. As of today Sidecar, Lyft & Uber have been made legit in spite of the cabbie protest down at city hall. While this still leaving airport pickups and drop offs up in the air [rumor is that they’re now arresting ridesharing drivers at SFO], it’s a good start. It still needs a final sign off, but it’s a step in the right direction.

For those of you who like to take a taxi in San Francisco you run into a problem. First there are only 1500 medallions so there aren’t that many drivers. Second, while against the law cabbies have been known for not taking passengers especially if they want to go out to the western side of the City. Third and finally you have the growing number of complaints levied against cab companies that don’t do much to help their image.

Enter the ridesharing companies who have crews of people who are all over the city and most of the Bay Area that don’t have a problem taking you to where the cabbies won’t. They don’t have bedbugs in their cars and they tend to be people who are more like those at a car show who are proud of their cars and work on keeping them up just to show them off.

As many of you know I’ve been driving for one of these companies and I have to say that I never realized how many people are still into taking cabs. I also hear on a daily basis all the complaints about taking a cab in San Francisco. The complaints are almost as bad if not worse than those about taking Muni. It seems like the time is right for someone who is thinking outside an old box to step in and offer an alternative.

Many of the complaints lodged against the ridesharing companies are more valid against the cab companies. Cabbies have to sit through a one week  training class. It’s not like cabbie college it’s more like traffic school in which you’re just there doing your time. There is no guarantee that the cabbies really know their way around the City and they aren’t taught things like 60 minutes isn’t an acceptable wait time and NO, according to the law you cannot deny someone a ride or pick up based on their destination. The background checks are pretty cursory as well.

I sort of feel sorry for the cabbies because they don’t realize that in of all places, especially San Francisco, you need to move forward with the technology. With the ridesharing companies you whip out your smartphone and call for a pickup the person usually calls you on the way to confirm everything and to see if there’s anything special like you’ve just been shopping and need to stash your groceries on the trip home and you can track their arrival via GPS. In most cases they get to you in under ten minutes, usually under five minutes.

When you get in many of the drivers have perks that they offer — anything from candy to water, etc. When you’re finished the driver closes out the ride and you’ll never hear, the machine is broken, cash only because there’s no machine, it’s all done with the smart phone and no cash changes hands. You’ll see the total [which with some you’ll see even before you call for the ride] and you tap a button and the money is transferred from your bank account and you’re done.

There’s no tricks or additional fees it’s just paying for the ride. No airport, child or baggage fees. Some of the drivers [myself included] have promo codes for new riders that will give them $10 credit on their first time riding with the service [my code is EventuallyEric hmmm…I might have to change that since it sounds like eventually I’ll get there which isn’t true.]

I like the ridesharing idea so much that I’ve even used it as a rider and I have to say that the ride was very pleasant and the driver who took me was a nice girl [Thanks again Jenna!] I needed to get from point A to point B quickly and without and attitude and that’s what I got. I did have a bit of a chuckle since I called for the ride in the Sunset District and she was there three minutes after I submitted the ride. Now just try THAT with a cab.

Sidecar In The City

Get Sidecar...Apparently there’s more problems in San Francisco than just Muni. It turns out that I was wrong and that there are lots of people who like to take cabs, but they have trouble getting one or getting one to take them where they need to go — enter Sidecar.

I’ve actually started driving for Sidecar mostly because it seemed like an easy way to get some extra money in my free time. It has been a good thing and I’ve learned a lot since I’ve started driving for them. First is that getting a cab in San Francisco is really difficult depending on where you live. Most of the cabbies only want to be in high traffic areas so places like the Sunset and Richmond will get you thrown out of a cab quick style. There really isn’t anything you can do about this, except call and hope you’ll get someone. If you hop in a cab downtown and tell them you’re going to the Sunset or Richmond be prepared to get thrown out quickly because they usually can’t get anyone to drive back to the high traffic areas they like.

Then you’ve got surly cab drivers. I’ll admit it’s been awhile since I took a cab in San Francisco, but I always remember they always looked and sounded grumpy. On top of that they would try and pull their tip out at the end before you could figure how how much you wanted to give them sometimes tipping themselves 50% of your fare.

Well Sidecar doesn’t work that way. You’ll need an iPhone or Android phone and download the app which uses GPS to tell the driver where you are [it gives them more info than that, but it’s based on your GPS co-ordinates]. You ask for a Sidecar and you tell it where you need to go and then all the drivers in the area are notified that you need a ride. Someone will pick up the call and come get you. There will be a suggested donation for the ride. All rides are done through donation and not a fare like a cab because that comes under a different set of rules then. Once the car gets there you hop in and they drive you to where you want to go. At the end when the driver closes out the ride on their phone you can pay then with your iPhone based on the suggested donation. You can add more for a tip or less if you like and I’ll get into that in a minute or two. People who drive Sidecars can be identified by the bright orange MOX [mirror socks] that are on their rearview mirrors. Much more discrete than the big pink moustache that Lyft drivers have to use and there’s no requisite fist bump when they pick you up [really? who’s douchebag idea was that?]

Now in the time I’ve been driving I had to say that I’ve met a lot of really fun people. No one creepy and almost all of them were happy that I was able to get to them so quickly. They’ve been all over the map from 20’s to 50’s and students to doctors so they’ve been a very interesting group of people to talk to. They always seem to like when I tell them that I’m born and raised in San Francisco and I usually hand them a card for this blog so if any of those people are reading this HI!

Now there’s a few things I’d like to suggest to anyone who uses Sidecar for a ride.

  1. The drivers only make 80% of what you pay them keep that in mind.
  2. I strongly suggest you at least pay the suggested fare and if within your means add a small tip. We appreciate it.
  3. Don’t pay less than the suggested amount. I’ve got a couple of friends who have been paid 80% under what was suggested and that sucks because the 80% is figured after the 20% is removed so it’s more like they paid 90-95% under.
  4. Don’t ever pay $0. Drivers can block you if you don’t pay or undercut the suggested price too much and if you start to collect blocks you’ll be banned from the system [it’s 3-5 to get blocked depending on who you talk to] because the idea behind it is that it’s a community of drivers and people who want to get some where not people you get to stiff for a free ride.
  5. If you need to pay less because you’re short on cash then you should think about taking the bus or at least tell the driver and try to keep the deduction at no more than 25%.
  6. Don’t wait forever to make the donation. If you don’t pay right away you’ll get a text in 24 hours and if you don’t pay then you’ll be charged the suggested fare. You have to keep in mind that the drivers don’t get their money for six days after you’ve paid so waiting a couple of days to pay is kind of bad form. Please try to pay within a couple of hours of your trip.

The drivers have to keep up their cars and pay for the gas and if you haven’t heard gas is getting expensive. I did use Sidecar as a passenger the other day and told the girl who drove me I was a driver and that I wouldn’t stiff her and even told her how much I was going to pay. My drive from the Outer Sunset to Inner Richmond was suggested at $17 and I paid her $20. She gets $16 of that. I think I made her very happy.

I’ll keep doing this for awhile because with Sidecar it’s cheaper than a cab for most people and when I want to drive people I run the app and get ready to hop in my car. I don’t have any schedules so I get to drive whenever I get free time and I drive a few hours every day. At the very least it got me to wash my car and I recharged the air conditioning today so it feels like I’ve got a new car once again. It’s also easy to move stuff around when I don’t have piles of empty McDonald’s bags in the back from my daughter anymore.

Oh and if you’ve never used Sidecar and want to give it a try you can enter the promo code EventuallyEric and get a $10 credit to make it cheaper for you the first time. I even made a little sign I put in my car.