Lyft will pay you to ditch your personal car

CXIV

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The kindness of strangers.

The other week I had a rather terrible UberPool ride. I should just have walked, but it was raining, the ride was cheap, and I am only human. We drove a couple blocks before pausing on a busy avenue to wait for the other riders. We waited, and waited, and the driver called the guy, who said he was standing on a corner that was very much not his pickup address. After a few more minutes the driver cancelled his trip and we made it another few blocks before a new Uber ping came in—for the same customer. So, we turned around and finally located this guy and his girlfriend. All in all it added about 10 minutes to the trip. “Slight delay,” a pop-up in the Uber app informed me.

I tell you all this to give context for what happened next: Uber sent a push notification to my phone, suggesting I “save your co-rider 2 minutes on their ride.” I clicked. A screen popped up suggesting I change my dropoff location to the nearest corner and walk the remaining half block, presumably preventing the Pool from having to turn on a one-way street in the opposite direction from its next destination. “Update your dropoff to make this route faster for your co-rider,” the screen read. It presented two buttons: “No Thanks” and “Update.”

Picture me: wet, late, annoyed at the couple in the UberPool. Consider Uber’s ask: That I walk half a block, in the rain, to save two minutes for strangers who had delayed me by at least 10. Like I said, I am only human. Obviously I said no.

Uber unveiled “suggested dropoffs” in May 2017, a feature it said would enable “a happier POOL ride for all.” Any good city dweller knows that it’s better to walk a bit to hail a cab going in the correct direction than to hail one wherever you’re standing. Suggested dropoffs was Uber’s way of incorporating this logic into its ride-hailing platform, with end destinations instead of pickups. The idea was that if you encouraged people to exit at a convenient corner and walk a little bit, you could avoid those unpleasant and time-consuming situations where the driver is forced to loop around the entire block just to make one dropoff.

Via, a ride-hailing company that provides only shared rides and which in my opinion has by far the best routing of any ride-hailing service, has been doing this for ages. The difference with Via is that the suggestions aren’t optional. Via’s routing is great because it snaps all its riders to a grid, ensuring that drivers don’t waste time making stops on streets that run in the wrong direction. The price of the service is that it’s a tiny bit less convenient—if you measure convenience in how little you have to walk, versus how efficient the overall ride is.

Uber has also started doing something like this with Express Pool, a version of Pool that has you walk to a convenient pickup spot and drops you off near, but not always exactly at, your destination in order to make the entire trip more efficient. In exchange for this mild inconvenience, Uber has made Express Pool its cheapest ride option yet. Like with Via, the modified dropoffs and pickups work with Express Pool because they are an assumed part of the experience. It’s not a choice; you just do it. The trouble with Uber retrofitting these dropoff suggestions onto Pool is that, like Blanche DuBois, it depends entirely on the kindness of strangers.

To cap or not to cap.

Elsewhere in Uber, the New York City Council is considering a series of bills that would regulate it and other ride-hail services. The main proposals are to:

  • Give the city’s Taxi and Limousine Commission (TLC), which regulates for-hire vehicles, the power to set minimum pay rules for app-based drivers

  • Cap the number of vehicles driving for Uber and other ride-hail companies

The minimum pay legislation, introduced by councilmember Brad Lander, would boost driver earnings to $17.22 an hour, a rate designed to equal $15 an hour after on-the-job expenses like gas and maintenance. It’s based on a very smart proposal from economists James Parrott and Michael Reich that suggests applying a “utilization rate” to each company’s fare calculations, which would adjust the amount the driver is paid based on minutes and miles to account for the share of time they actually get a fare. We talked in a previous newsletter about how this system would essentially create a flexible and natural cap on the number of drivers on the road, because it would stick the companies with the bill if there were too much driver supply.

The cap proposal is to freeze the number of app-based cars for up to a year while the TLC studies the best number. It’s similar to a proposal mayor Bill de Blasio and city council tried and failed to push through in the summer of 2015.

New York editorial boards are remarkably in agreement that the pay legislation is a good idea, and the freeze-cap is bad:

  • New York Daily News: “A cap, though, is a last-resort blunt instrument. Used properly, the driver-income rules can and should make the apps themselves find the equilibrium on the number of cars, while also setting the right balance between Manhattan and borough services.”

  • New York Times: “Instead of capping new licenses, officials should devise policies that limit the number of cars on the busiest streets during the busiest parts of the day… The proposal to establish a minimum wage for for-hire drivers carries more promise.”

  • New York Post: “As the City Council rushes to freeze the growth of Uber and other for-hire vehicles, no less than the Rev. Al Sharpton is raising an inconvenient truth: It’s a hit on minorities and the poor.”

Uber per usual has launched a campaign in its app, which advises that “some of the proposals are worthwhile, but others could make Uber more expensive and less reliable.” Uber obviously dislikes the idea of a cap, and it says letting the TLC set prices could lead to “substantially higher prices.” But, I mean, that is sort of the point, right? For drivers to earn more, someone needs to pay more, and it’s either going to be Uber or its riders. The city council votes on Aug. 8.

Scooters!

One thing I love about startups is how broadly they define innovating. Take Spin, an electric scooter company, whose co-founder Euwyn Poon told Vice the company is known for “going out there and innovating on the regulatory side”:

Vice: Can you understand how the phrase “innovating on the regulatory side” could, to regulators, be seen as just breaking the law?

Poon: I mean that’s what, I mean, bringing—I guess uh—putting my, my lawyer hat on, I think it’s a process.

Vice also talked to a pair of bros who support the scooters:

Bro 1: Once you get on there and you start the wind in your hair, it’s pretty fun.

Bro 2: You know, either there’s girls checking you out, or there’s, you know, the angry elderly couple that’s saying, “Get off my streets!”

Meanwhile, Vice also profiled Bird Graveyard, an Instagram account with nearly 18,000 followers devoted entirely to photos and videos of scooters being destroyed:

“Smashing scooters is just funny,” the account admins wrote to me. “It’s amusing when people come to the page and do not get why it’s funny. If you can’t laugh at a rideshare scooter being lit on fire at a house party, that’s a problem with you. There’s nothing in the Constitution that says we all have to respect and love brands.”

Elsewhere: Lyft gave DJ Khaled an electric scooter

Free money.

It’s not quite universal basic income, but Lyft is giving $550 to 100 people in Chicago if they agree to ditch their personal vehicles for a month. Andrew Hawkins at the Verge calls it a “bold, if slightly gimmicky, way to highlight the high costs associated with car ownership,” which sounds about right:

To be sure, Lyft isn’t handing over $550 checks to people and then sending them on their way. The money will come with strings attached. Those who accept the challenge to put away their car keys for 30 days will get $300 in Lyft shared ride credit (for use in carpool trips only), $45 for a monthly Divvy bike-share pass, $100 in Zipcar credit, and $105 for “L” train and bus service.

“We are literally asking people to get rid of their cars,” said David Katcher, Lyft’s general manager for the Midwest. “Basically, we’re giving people this opportunity to park their cars for 30 days, and here’s everything you need to get around this city.”

Lyft will rely on the honor system with people selected to participate in the program, and also encourage them to post about it on social media. The company is reportedly thinking about duplicating the experiment in Portland, Oregon, later this year.

One of the hardest parts of getting people to give up their cars is simply changing their habits. That means getting to a place where the first thought of someone who needs to go to the grocery, or pick up a child from school, or commute to work, isn’t “I’ll drive there,” but “I’ll take a Lyft,” “I’ll take the bus,” or “I’ll bike.”

Getting there means giving people a reason to consider these alternatives. Uber and Lyft and other ride-hail companies have made progress by making their services extremely cheap, to the point where taking a shared ride might be cheaper than paying for a trip on the local transit system, which it already is in many cities. But switching out some trips is much different from switching out all trips, which means to make it happen the incentive has to be that much bigger. $550 seems like a good place to start.

Other stuff.

Waymo and Walmart test self-driving cars for grocery delivery. Uber is giving extra tips to its best-rated drivers. Uber hits 10 billion trips. Shared electric mopeds land in Brooklyn. GM launches Peer Cars. Massachusetts extends hotel tax to Airbnb. Uber stops developing self-driving trucks. Uber driverless cars are back on the road in Pittsburgh. PennDot updates autonomous vehicle testing guidelines. MTA blames Uber for decline in subway ridership. Cargo wants to reinvent the Uber experience. Taxis strike against Uber in Spain. London cabbies say Uber cost them £10,000 a year each. Avis partners with Airbnb. Kushner startup fails to get backing from SoftBank. Retailers use home installation services to compete against Amazon. Gig workers demand better benefits. Lyft and Hitch Health cut missed clinic appointments by 27%. Tentrr expands to Pennsylvania. Apart-hotels. “Zen mode.” How Goop’s Haters Made Gwyneth Paltrow’s Company Worth $250 Million.