A few bits about the (probable) upcoming arrival of ride hailing apps such as Uber and Lyft

Lyft app screenshots

Screenshots from the Lyft app. / images: Lyft

As you've no doubt heard, the big blob of legislation that wrapped up the new state budget included a provision opening the way for ride hailing companies such as Uber and Lyft to start operating across New York State.

The services will be allowed to start operating 90 days after the governor signs the budget legislation. So, it's probably going to be sometime this July. And then whether the services are offered in a specific market will be in the hands of the individual companies.

The legislation sets out rules for a handful of issues that had been holding up the approval, including insurance requirements and local regulation. Here are a few bits and other stuff...

A few bits about the rules

The provision allowing ride hailing services -- "transportation network companies," as the state refers to them -- to operate in places within the state that are not New York City (where the services already operate) is embedded deep within a much larger piece of budget legislation (Part AAA if you'd like read through it yourself). A few bits:

Receipts and whatnot
+ The companies are required display a picture of the driver and provide info on the make, model, color, and license plate number of the vehicle in the app when a person has ordered a ride.

+ Companies are required to provide an electronic receipt in a "reasonable period of time" that lists origin and destination, total time and distance, itemization of total fare paid, state any applicable fee or surcharge, as well as the name and operating license number of driver.

+ There will be a 4 percent state tax on fares.

+ The legislation says companies shall have a policy prohibiting solicitation or acceptance of cash payments for fares for prearranged trips and that drivers shall not solicit cash payments.

+ Companies are prohibited from discriminating against customers on range of characteristics, including destination, race, and disability.

Drivers
+ Companies are required to do criminal background checks on drivers.

+ Participating drivers are not allowed to accept street hails.

Insurance
+ The amount of required insurance had been a topic of debate within the legislature, and it shook out this way: When the drivers have the app on, but aren't responding to a ride request or carrying a passenger, there's a requirement for at least $75,000 in coverage for death or injury for one person, and at least $150k for more than one person. When drivers are responding to a request or have people in the car, the requirement is at least $1.25 million.

Local control
+ The legislation includes a provision allowing counties -- as well as municipalities with more than 100,000 people -- to opt-out of allowing ride hailing within their borders. That shouldn't be an issue here in the Capital Region -- many local leaders have consistently said they welcome the services. (Also: The Capital Region doesn't have any cities or towns with more than 100,000 people, though there's maybe some chance Albany might make it over the mark in the next Census.)

uber app sample screenshots
images: Uber

A few other things

Expectations after all those years
The push to open the way for these sorts of companies to operate here has been years in the making. (It was more than three years that local restaurant owners Matt Baumgartner and Vic Christopher started publicly advocating for the services.) And there's been a lot of hype over that time about how the services will be able to shake up the local taxi scene here.

There's plenty to shake up. The current state of taxi service is, by all accounts, not good. Introducing new competition is a good thing. But it'll be interesting to watch the degree of change, and how much these services do -- or don't -- expand the supply of rides for hire. Companies such as Uber and Lyft -- if they decide to operate here (and there's no reason to think they won't) -- will no doubt draw more people and vehicles into the pool by appealing to people who, say, might do it as a job on the side. Are there enough of those people to significantly change the situation, though?

Is the concept better than the business?
The ability to request a ride from your mobile and then handle the whole transaction virtually is a great idea, especially from the user's perspective. But this sort of business is still relatively young and there are still some real questions about how things are going to work in the longterm. Uber has been burning through tons of cash as it tries to expand market share, subsidizing rides. All the while drivers have started to complain in many markets that they're not being paid enough, and there are serious questions about the employment status of drivers and the employment practices of the companies.

One view has been that Uber and other companies are essentially trying to hold out until self-driving cars are viable, and that will allow them to eventually cut costs -- by cutting out the drivers. But that's not a sure thing, and if it comes to pass, it blunts the employment benefits touted by these companies.

This shouldn't the end of the taxi and transportation discussion
It might be tempting to say, "Hey, we have ride hailing apps now, problem solved." But the push to expand -- and improve -- local transportation options needs to continue. That means CDTA needs to keep moving on its efforts to finally regionalize rules for local taxi service. It means local taxi services need to up their game. And, of course, the region needs to keep rolling along on bus service, bus rapid transit, bike share, and car sharing.

A big reason to keep pushing on all these fronts is to make sure there are good, affordable transportation options for all sorts of people in this area. But it's also about diversifying the portfolio so that if one part fails, there are other services ready to help fill the gap.

Earlier

+ New York State could be closer to allowing Uber and Lyft to operate here. Maybe. Sort of. (2016)

+ A few more thoughts about the push for Uber, Lyft, and similar services upstate (2015)

+ A Lyft for Albany? (2015)

+ "The cab driver was eating an entire plate of take-out food while driving. I'm not kidding." (2015)

+ An attempt to hail Uber for the Albany area (2014)

Comments

From today's New York Times editorial titled "The Gig Economy's False Promise":

"Since workers for most gig economy companies are considered independent contractors, not employees, they do not qualify for basic protections like overtime pay and minimum wages. The use of independent contractors is hardly an innovation. Traditional businesses like garment factories, construction companies and trucking have often misclassified employees as contractors to avoid offering benefits, paying payroll taxes and abiding by labor laws."

"But so far, experience with these companies shows that without the legal protections and ethical norms that once were widely accepted, workers will find the economy of the future an even more inhospitable place."


I have thought AOA has always taken a bit of a guarded stance towards this issue, and perhaps that is an effort to remain neutral on the issue, and take a wait and see approach. For those who have never used these services and read AOA I would imagine their views would be similarly guarded. They shouldn't be.

The ride sharing idea may not be better than all cabs, but I can say with 100% confidence it will be better than Albany cabs. The reason? An immediate feedback system which is taken very seriously by ride sharing companies who have high standards for their service and the staff providing this service. Albany cabs will either meet this standard, or fail, and the Capital Region will be better off for it.

One of the biggest reasons people are so excited about ride-sharing finally coming to the area is the ability to now know that you can get home from somewhere. Right now, we do not really venture to Troy, Albany, or Saratoga to go out to eat, as we can't really have more than two drinks, and feel comfortable driving. With the area cabs, there is no guarantee that you will be able to get one, and if you do get one, you most likely need to wait 45 mins to an hour. With Uber and Lyft, we now know that we will be able to get a ride there and back.

A hint of pure evil:

https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html?_r=0

the crux:

'Employing hundreds of social scientists and data scientists, Uber has experimented with video game techniques, graphics and noncash rewards of little value that can prod drivers into working longer and harder — and sometimes at hours and locations that are less lucrative for them.'

It's investor class subsidy used to exploit drivers/workers while creating monopolistic hold on an industry. Anyone who uses Uber is in tacit agreement with the model.

anon, I'm not sure anyone is worried about the level of service, which currently is almost unanimously considered sucky.

Some of us are worried about the capital region being better off. Level of service is only one piece of that puzzle; the overall "ecosystem" of businesses, services, and the opportunities they offer is the big picture.

Competition! You're right, competition is needed in ride services. But consider that Uber does not make money. In fact they've been losing money faster than just about any tech company ever has. Ask yourself why (and if that's truly competition, a different topic though). There aren't many reasons that make sense beyond an attempt to corner the market. Force traditional cabs out of the picture, get rid of drivers, and there you have it. Only problem is you've just eliminated that competition that's supposed to help all of us - and a lot of jobs while you're at it, through some really shady business practices (driverless cabs are coming regardless, but Uber's tactics are denying a transition into other fields for current drivers). If you think Uber will be beneficial overlords, well...

So yeah, we want the capital region to be better off, but don't miss the forest for the trees here.

I'm glad this is finally happening. Now we can talk about public transportation options without the Uber shills screaming that public transportation is incredibly stupid and no money can be spent on it until they have Uber so they can go bar hopping.

From my personal experience, having lived in Washington DC when Uber was introduced, the outcome has been that consumers got more choice and better service and the taxi companies finally got their "heads" together and are providing much better service than before. For example, taxis now (finally) offer payment by credit card (which you would expect to be common place but they had no incentives to install the system beforehand). I personally hope this will bring a change for the taxi service in the Capital Region as well.

And let's not forget about the proposed gondola!

http://www.timesunion.com/tuplus-local/article/Churchill-An-Albany-gondola-Give-the-idea-a-10625544.php

Both the senate and assembly bills create a group insurance that the TNCs will need to carry which could be seen as a pretty decent L for them given their previous stance in liability suits that have been brought against them. This is good for the drivers and passengers, though.

And, in case anyone is playing along at home, with either bill if you are an Uber/Lyft driver, you will need to carry 2 types of auto insurance: your ridesharing insurance which has higher than normal BI/liability limits (but not higher first party medical which.. is interesting) and your regular personal auto insurance (in effect while you are not using the app). Not. Cheap. Do the cost benefit analysis before signing up- it will probably make more fiscal sense to be a waiter, get a part time job at Target, etc. unless you're doing a lot of driving.

@ -B

Uber does not make money in the sense that when a real estate company is building it's apartment complex all they are doing losing money putting up an initial investment to build something for the long-term.

The folks invested in this are extremely intelligent people who do not want to lose their money, if they felt they were at risk, they would leave and Uber would have no capital.

On competition- you're thinking about ride sharing vs cabs not ride-sharing vs ride sharing. There are tons of ride sharing companies out there beyond Uber and Lyft.

Usually what happens in these scenarios is there will be a few dominant players, like Uber and Lyft who get so big they can't please everyone and then smaller competitors develop a regional advantage.

Fasten started small in Boston and I recently took one in Austin. With way less scale they offer the same rates as Uber and Lyft and the same service level. The little guy can not only compete, he can flourish. So there you have it, competition and an increased standard of service.

As much as I dislike Uber, I dislike our cabs far more. Lyft will be getting my business and I'm confident downtown Albany (and Troy) will see a nice uptick in business. I know plenty of people who avoid downtown due to our public transit/cab options - TNC's remove that hassle at a cost in between the two.

No way do we have the density for Uber drivers to make a profit at a price people will be willing to pay. The drivers will be deadheading too much between fares for the economics to work.

As a public transit enthusiast and bolster, I’m curious how the ride-hailing evolution will ultimately pan out.

On one hand, there are some evident compliments between ride-hailing and public transit, with the most obvious being getting folks from a location with limited transit options, to one with many (take a Lyft downtown, then use the bus system to bar hop, take the Lyft back home). Additionally, some interesting data is emerging that several stakeholders can and are being to leverage. Case in point, some evidence is pointing towards the potential of identifying “flex-routes” that transit agencies could incorporate into their broader system, chiefly in denser inner-rung suburbs that presently have limited transit options. For example, it may not make sense to run buses to Delmar all day (the traditional model), but have select route runs around dinner on the weekends, when suburbanites may be collectively hailing rides to get downtown.

However, there have been some rumblings that ride-hailing may be all smoke and mirrors, or a dream too good to be true. For example, NYC has seen increased grid-lock as folks increasingly rely on ride-hailing, which may eat into the convenience of hailing a ride versus utilizing public transit which can accommodate far more people, but use less physical space. For me, the biggest stumbling block for ride-hailing is pricing and how sustainable it is to continue to support the low-occupancy model of getting folks from point A to point B (typically low density to high density environment). A lot of evidence is pouring out that the model is just not viable in the long run and that the convenience factor to the consumer is presently being heavily subsidized and can evaporate overnight when the economics of performing the task are officially priced in. Additionally, the environmental externalities of ride-hailing are pretty bad, given that most rides are typically to transport one consumer; but then again, the environment is never really priced into any economic models, so most folks just don’t see those costs and remain blind to them. Ultimately, given the Capital Region’s relatively low density, sprawling set-up, I don’t think the economics will be there. But only time will tell and think the experiment is a worthwhile one to let play out…you never know what surprises may result.

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