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.

May 16, 2017December 18, 2021

Is San Francisco Traffic That Bad?

Yes. Let’s get that out of the way first. San Francisco traffic in the last few years has gotten a bit horrible and it might be getting worse. Here’s a few things to keep in mind when you wonder why the traffic is so bad:

Taxis: OK, this isn’t really so much of a problem because San Francisco has had 2500 taxi medallions for years now. The biggest problem from the beginning is that taxi drivers love to stay only in the FiDi/SoMA/Wharf areas where all the money is which caused a problem with people who needed transportation in other areas.
Lyft/Uber: The answer to getting a non-SFMTA ride in areas where taxi drivers would tell you, Going off shift now. There are currently 45,000 Lyft/Uber drivers driving in San Francisco every day. Many of these are people from outside the City who come in because they work 40-70 hour weeks since that’s their only source of income and living outside San Francisco is the only place they can live when they drive for Lyft/Uber.
Tech Buses: While they’re universally hated by many in San Francisco they piss people off more than contribute much to the traffic jams we see in San Francisco.
Chariot and other bus like systems: These come and go every month with someone who’s managed to get enough investment to give them a shot in the arm to disrupt the travel industry. Oh dear. They tend to drive worse than Lyft/Uber drivers from my experience and they appear to disrupt traffic quite a bit considering they only are out during rush hours.
Commuters: I didn’t think there would be that many of them, but in the mornings there are tons coming into the City and in the evenings there are tons leaving the City. Not to point fingers, but I see BMW’s, Mercedes, Audis and Lexus’ [Lexi?] as the majority of these cars.
Bikes: C’mon, I have to add them in. They frequently drive downtown like they own the street and shoot in and out of cars with a total disregard for the welfare of pedestrians or people driving a vehicle that is more than capable of turning them into hamburger if they can’t move out of the way fast enough.

It is really getting bad to say the least. Even out in the Suburbs of San Francisco, or the Sunset District we’re starting to see more traffic as more people like to get away from the hustle and bustle of downtown, but don’t have a car so they come out here to visit or even move out here because it’s more peaceful.

A few years ago traffic was bad, but not as bad as it is today and the problem I’ve seen is that it’s only going to get worse more likely. I say that because now that the big news is all about how driverless cars are going to disrupt the rideshare industry which of course the rideshare industry was built to disrupt the taxi industry there’s a few things people who know nothing about this industry haven’t noticed.

Driverless car technology is the new Kool-Aid styled drink for techies because, well, it’s a tech thing. I have to admit that I did work for a company as a test driver for these cars and they have come a long way since I started, but they aren’t reading much of the data from what goes on in the rideshare industry.

One company, Cruise Automation posted a recent video of a night time drive with one of their driverless cars that lasts almost an hour and a half. I have to admit that I was pretty impressed with the video, but there are a few things that aren’t mentioned because it’s showing a car driving around downtown San Francisco simulating stops that rideshare drivers do. The problem is in the high speed they show only four stops in the almost hour and a half video in downtown San Francisco. These four stops equal 2 pick ups on 2 drop offs. To do this within an hour and a half isn’t workable in San Francisco. On a bad night in downtown SF you could do 3 pick ups and drop offs downtown within an hour and on a good night you could do 4-5 of the same within an hour. 2 pickups and drop offs within an hour and half would drive the riders crazy.

Currently, according to the California DMV, driverless cars can move at a speed of no more than 25mph. This is fine since that is the general speed limit in San Francisco, but, how often do cars really obey the speed limit? The cars can’t travel on freeways which are frequently used by all of the above mentioned traffic contributors to shave time off trips, so currently the driverless cars are at a disadvantage.

I also have yet to see a driverless car [any driverless car, I don’t want to seem like I’m picking on Cruise] properly pull over to pick someone up. After seeing the progress that has been made I suspect they will find a way to do this in the future, but right now that’s still a sticking point and especially in parts of San Francisco where there simply is no place to pull over you’ll be stuck with slow cars double parking to pick up or drop off passengers and then who will the police officer write a ticket to?

San Francisco is growing like a balloon that is overfilled and one day soon it will likely pop due to any number of things. It’s very hard to get around in the City anymore even for someone like me who’s been driving around here for the past 30+ years. I can’t remember the last time my wife and I have gone somewhere outside the Sunset District in San Francisco other than our monthly trip to take our daughter to a play day in the Mission which we drop her off in the morning before everyone’s awake on the weekend.

I honestly wish I had an answer to this problem, but other than regulation which limits the number of cars or an increase in better public transportation [which is always a loss to the city that provides it] I don’t see an answer. I do think that some people need to see the problems inherent in the direction some people are trying to push things right now.

April 19, 2017December 18, 2021

Kids And Uber/Lyft

Hi everyone. Remember me? I know it’s been a while and I’ve been busy since my tech job ended which is a whole different story that I don’t plan to get into here, but I’m back and I’ve found a few things I feel I should talk about.

As you might remember I have been driving for various ridesharing companies and I recently came across something that’s a bit disturbing that no one seems to be talking about and that’s regarding kids, specifically minors, people under the age of 18 who use Uber unaccompanied by an adult.

It’s happening more and more frequently lately where parents will either:

Call an Uber/Lyft to get their kids home from school.
Load the app and set up their accounts on their kids phone
Set up their kids with an account

These are all very terrible ideas and let me tell you why. It’s illegal. Yes, that’s right. In the San Francisco Bay Area in the rules that rideshare companies agreed to with the CPUC they are not to give rides to unaccompanied minors.

Why aren’t any of these companies doing anything about it? My guess is because they’re making money so they don’t check the accounts of people who are willing to give them money. They don’t point this out to the drivers and definitely don’t tell the customers this because it would hurt their already failing bottom line.

OK, so it’s illegal, but it’s more convenient and will help teach my kid to take care of themselves so where’s the harm? The harm is in the terms of service agreement. That thing that nobody ever reads, but everyone is accountable for. Because it mentions that rides to unaccompanied minors are not allowed per their agreement with the CPUC if you send your kid to or from school in a rideshare vehicle and said car is involved in a crash these companies will tell you, I’m sorry, but you’ve committed a violation of our terms of service agreement so we are not liable.

I can’t really blame the companies for having this in place as unfortunately in today’s society with all the child kidnappings that pop up it’s probably good for them to err on the side of caution in case one of the background checks on a driver misses something, but it also helps save their butt once again in case of an accident, but it won’t help protect your child.

I usually start my afternoon run between 4-5pm and I live a few blocks from a local Catholic school that is almost always my first request. What started me looking into this was a ride I gave to a couple of kids who had me drive them from San Francisco to Corte Madera to drop off one kid then drive back to the city and drop the other kid off in Tiburon. It was a bit of a long trip so I was talking to the kids on the way. They were both 16 and the Dad of the kid who ordered the ride set him up with an account so Dad didn’t have to take him to and from school. Oddly enough just as I dropped the kid who’s account it was off in Tiburon [the Corte Madera kid was just a friend of his he was doing a favor for] he said to me:

You were a really cool driver. I doubt you’re going to get anyone back from here so why don’t you just leave the ride open and close it when you get back to the city.

Uhm, why thank you sir. That is very generous of you my kind sir.

Turns out the entire trip ran about $60. I’m wondering if his Dad was very happy about that, but considering he lived in Tiburon on the hill in a house that looked more like something out of Beverly Hills I’m guessing Dad wasn’t hurting for money. Something seems so wrong with this whole thing of a kid being able to blow that kind of money just to get home from school that I had to look into it.

So please. If you’re a parent, don’t give your kids your rideshare account or set one up for them. While I’ve never been in an accident in all the time I’ve been driving for a rideshare company that doesn’t mean that it’s not going to happen and many of the drivers out there don’t have specific rideshare car insurance so their insurance won’t cover any damages either if an accident happens.

There were a couple of rideshare services aimed specifically at kids, but unfortunately those companies ran out of steam and have closed up shop.

Last time, please, keep your kids safe and find another way to get them where their going regardless of where it is. At least Muni insurance will cover your kids.

December 30, 2015December 18, 2021

A Requiem For Sidecar

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.

July 16, 2014December 18, 2021

Need A Ride To The Airport?

This isn’t getting mentioned in the media or even in any bloggers so I figured I better scoop this story for all my fellow TNC drivers so that the public knows and understands a current problem that we all have now that is especially bad in San Francisco.

In September of 2013 The CPUC decided that ridesharing companies such as Sidecar, Lyft & Uber had every right to operate in California. The CPUC call the companies TNC’s for Transportation Network Companies because they use cell phones to communicate ride requests as well as the processing of payments for rides. One of the little things that was sort of buried in the decision was that all TNC’s much work with local airports to establish an agreement for operating at these locations.

As you know I drive for Sidecar and it was always the general rule of thumb that you could drop off, but not pick up passengers at SFO until further agreements could be reached because at the time that was what the airport had written into it’s laws. Any company doing business on the airport premises or off for the purpose of picking up passengers on airport property had to have an agreement in writing with SFO. Nothing was said about dropping off people so that what we went with.

Well, things have changed. SFO has issued a statement to all TNC’s that until they get a permit from them they cannot drop off or pick up passengers on SFO property. I believe LAX has issued the same statement, but not pretty much every airport in California is like this. From my experience with Sidecar I know that they are actively pursuing the permit, but they have run into a few snags from SFO’s list of items TNC’s need to provide in order to get the permit. This isn’t only a Sidecar problem, but something that all TNC’s have a problem with. Some of the requests are based on old technology that doesn’t apply to new technology. Kind of like if the horse trade organization said that all cars needed to have distemper shots so they were healthy. The two don’t necessarily work together. All the TNC’s are trying to work the bugs out, but currently, no one has a permit.

The biggest problem and this is the most important thing that anyone who uses TNC’s for transportation needs to realize that as of right now the airports are off limits. Let me put that is a bit large type so it stands out:

TNC’s cannot drive you or pick you up from the airport.

Please pass this along to all your friends, neighbors, everyone. This has become more of a problem because the airports and especially SFO are starting to crack down. I see reports daily of drivers for many of these TNC’s getting stopped and ticketed for dropping off or picking up passengers at SFO. I’ve heard that it’s happening at other airports in California as well, but SFO is the worse.

Some of the TNC’s are being a bit passive aggressively defiant in that they are telling drivers they will cover the cost of the ticket [which I have heard runs between $220-$600 depending on what they write you up on], but they aren’t telling drivers not to take people to the airport. This makes some of these TNC’s look bad to the CPUC who has given them the right to operate in California. Sidecar has officially told all of it’s drivers to not accept rides to or from SFO and that is easy because riders have to put in their destination when they request a ride. Sidecar is also working on blocking requests to the airport until they can resolve the problem with SFO. Those other TNC’s aren’t doing this.

Why is this a problem for you the rider? The CPUC has given TNC’s a right to operate in California and it was the first state where this was done. All of these companies have started in San Francisco as well so we are the bullseye that everyone is aiming for. Many of you love TNC’s because they’re more pleasant than taxi’s. TNC drivers are held more accountable than taxi drivers to the point that we’re seeing a lot of taxi drivers changing their attitude and coming over to work for TNC’s because they can make more money with less outlay of cash [you do realize that taxi drivers have to pay upfront before the cab even leaves the lot]. In San Francisco and the Bay Area TNC’s have changed the way people get around. TNC’s you can request and they show up within minutes. They don’t demand a tip [though they appreciate it], you will never hear, machine is broken, cash only and in general the drivers are much more pleasant to ride with. Pricing can even be less expensive than a cab frequently.

If you want to see this all go away then go ahead and book rides to the airport. There will always be drivers who will take the risk that don’t understand that while they might get $35 from that ride to the airport [less than a taxi] in the end they could help bringing TNC’s in San Francisco, California and then spreading out to the rest of the country and world to an end. I happen to like driving for a TNC and I’ve met lots of fun and interesting people and made lots of new friends. I know I’m helping out people who need to get somewhere quickly and it’s giving me a way to make money on a flexible schedule. Please do not ask for trips to the airport because if you do you might find yourself walking home at 2am on a Saturday night or waiting an hour to find a taxi to hail.

July 5, 2013December 18, 2021

Strikes Happen…

As of today it looks as if the BART strike is over at least for now. I have a feeling in my gut that sometime late Sunday things will break down and the strike will be back on Monday giving the Bay Area a break for the weekend.

I’ve realized that when I say to myself, don’t they remember? This has happened before. Most of the people in San Francisco haven’t been here before and don’t remember things like June and July it’s normal to have fog in the city and sun in the summer is considered odd. Our summer comes in September and October. Like the weather, transit also has it’s shifts.

It has been awhile since there was a BART strike which probably means that half the people in the City weren’t here for the last one. Hardly anyone was here for the 1989 quake and has forgotten how people used to get to work when BART and the Bay Bridge were closed down. I think the ’89 quake is one of the reason I never liked the idea of working outside of San Francisco. You can get to and from here in the case of an emergency, but it isn’t as easy.

During the ’89 quake people discovered the ferries for the first time in I don’t know how many years. Suddenly people were saying things like, Gee, it’s kind of nice to glide home across the Bay with a glass of wine in your hand. Yes, it does sound a bit like I wonder what the poor people are doing, but it sort of became a luxury commute for some people compared to having to drive or deal with grumpy people smashed together like sardines on BART.

Then there is the casual carpooling which has been around for years. I worked with a guy who used to drive into the City across the Bridge and he’d always pick people up who would give him money to cover the bridge fare which would also help cover his gas as well. Now that BART has been on strike there’s an uptick in the number of people looking into that way of getting to work.

There was also a boom in people who realized that they had a job where they weren’t retail and didn’t have to be face to face with people every day so they could work from home once the internet was more robust.

All of these things led to a drop in the use of BART and to a lesser extent MUNI. People found a way around the problem which in the long run was more enjoyable and gave them an alternative. This caused less crowding on BART and MUNI [I’m not sure why MUNI is affected by a BART strike, but in the past numbers have shown the two co-relate].

BART strikes to me are like a purge that’s needed every once in awhile to get ride of extra people that bloat public transit. In the long run that means less income for public transit which can lead to an increase in fares, but the ride is more enjoyable. Ultimately the solution to the problem would be for people who work in San Francisco to live in San Francisco. They could spend the money from their higher incomes in the City and give something back.