3 lessons for buses, from Uber, illustrated by presidential candidates

Every form of transportation has some unique considerations. Car drivers worry a great deal about parking near their destination–a consideration bus riders don’t need to think about. But, as transit consultant Jarrett Walker has written about, some considerations are universal. As Uber and Lyft have added carpool services, some people have noted that they can learn from traditional transit:

But what lessons go in the opposite direction? What can transit learn from Uber?  Continue reading

5 Reasons Uber has leverage in Austin (or, How Austin made taking taxis awful)

Austin is in election season. City Council passed a new set of rules for Uber and Lyft, and the companies have funded an initative to repeal and replace those rules with rules more similar to the ones previously in place. On May 7, the issue will be decided by voters. This election has been heated, with charges that Uber pays its drivers too little and its campaign workers too much and countercharges that City Council members are in the pocket of Big Taxi. For many people I know, the referendum poses an awkward choice: they think the new rules the City Council passed are reasonable but they don’t want to see Uber and Lyft leave.

How is that when two young, money-losing startup companies contemplate stopping service here, that possibility gives them so much leverage? Mostly, the answer is that Austinites remember getting rides prior to Uber and Lyft, it was awful–and nothing has been done to fix the underlying problems.

1 The city (still) limits the number of taxis

Finding a taxi in Austin when you needed one was hard. At 2:00 AM on Friday and Saturday nights (closing time for bars), throngs of downtown revelers used to line up desperately searching for cabs. Many folks had to wait until the first wave of cabs had already driven to the suburbs and back. Others gave up and either drove home intoxicated, took unpaid rides from strangers, or hired unlicensed cabs. Since Uber and Lyft have arrived, the number of people offering rides for money and the number of paid rides have both risen dramatically, showing that the demand was always there, but couldn’t be provided for with the limited number of taxis the city permitted.

2 The city (still) forbids taxis from pricing appropriately

Uber and Lyft vary their prices for a variety of reasons. They use sales and first-ride discounts to promote their services; they use temporary price hikes to motivate drivers to get on the road at times of high demand. Given the city-mandated taxi shortage, taxi companies could have used similar tactics to build ridership at down times and motivate all their drivers to drive at times of highest demand. Except the city doesn’t allow taxicabs to change their prices except by act of City Council. The tools that Uber uses to provide reliable service aren’t available to taxis.

3 The city (still) limits the number of taxi companies

Ever wonder why, when riders and drivers both complain vigorously about the existing taxi companies, no other company came into existence and tried to lure drivers away to work for them instead? After all, Uber and Lyft are constantly fighting for each others’ drivers. The city only grants franchise agreements to three companies and limits the number of drivers for each, so they have no incentive to compete for drivers. As a member of my neighborhood association, I’ve met with people looking to start a new taxi company. Unfortunately, all their time was spent on the politics of convincing City Council members to allow them to serve customers rather than the actual logistics of serving customers. Starting a business is hard enough; starting a business that requires political approval before you are allowed to operate is a step too far for most people.

4 The city (still) forbids other companies from offering anything that even vaguely resembles a taxi ride

With the city-mandated taxi shortage, you might expect people to get more rides from slightly differentiated services like prearranged ride companies (called limousine service, but not limited to stretch limos). However, the city code includes many rules with no conceivable consumer benefit. For example, limo services are forbidden from charging less than $55/hour, must wait half an hour before providing service, and must keep trip tickets proving both of those facts.

5 Uber and Lyft provide better services than traditional taxis

Even acknowledging reasons 1-4, Uber and Lyft probably wouldn’t have as much leverage as they do if they merely provided another option on par with what existed before. But they really have managed to use digital technology to provide much better service for passengers. Just some of the Lyft features I’ve personally used recently:

  • Texted my driver before he arrived to okay bringing my cat along.
  • Waited upstairs until GPS showed my ride was a minute away.
  • Automatically matched for carpool with people I didn’t know.
  • Texted my friends a link to a map tracking my ride’s current progress.
  • Paid and tipped my drivers via credit card on file without driver interaction.

In addition to these flourishes, they’re better at the basics of requesting and dispatching cars. This is a point that gets acknowledged repeatedly at City Council. In one debate, Ellen Troxclair argued passengers already have a choice of fingerprinted drivers (taxis) vs. non-fingerprinted drives (Uber/Lyft), and Mayor Adler said it wasn’t realistic to expect passengers to choose taxis given their inferior service.

What next?

Uber and Lyft currently have superior technology and regulations that allow them to put as many drivers as they need on the streets and price rides based on the conditions they face. With the possibility that those companies will be unwilling to continue service under Austin’s new regulations, voters face a choice between having access to convenient, reliable paid rides and the regulations which at least some of them prefer.

Uber and Lyft’s tenure in Austin has exposed the massive gap between the ride services we had and the ride services we want. Whatever the outcome of the election on Proposition 1, I hope that City Council realizes that, as long as it forbids taxi drivers from collectively meeting the number of rides needed, they will always be providing a massive amount of leverage to non-taxi companies who want to meet that demand.

UberAccess Expands Mobility

I’m honored to have today’s guest post from friend-of-the-blog Boone Blocker. Boone is an active citizen in the transportation field, having served on the city’s Urban Transportation Commission and CapMetro’s Access Advisory Committee. Boone was Rider Zero for UberACCESS; he brings his user’s perspective on the new service that provides mobility for people with mobility challenges:

Around the world and in our own community of Austin, people with mobility challenges have been and continue to be left behind by the current antiquated taxi system. These rides are unreliable at best and exclusionary at worst. Under the model which exists today, drivers frequently break off from trips and paying customers are left stranded with no idea if their driver is actually coming or in what timeframe they might be arriving. As an answer to this very real problem, an innovative alternative to the old tired system recently arrived on the local scene: UberACCESS.

UberACCESS is a first of its kind, 24 hours a day, 365 days a year, on-demand, fully wheelchair accessible service. Instantaneously upon successfully requesting the ride, the passenger is alerted with the driver’s name and picture and additionally the type, color and picture of the vehicle. The passenger is also provided with the driver’s contact information if they need to relay any trip information and can carefully monitor the pick-up vehicle’s block-by-block movement and ETA as it approaches the pick-up location.

UberACCESS is empowerment in the face of hopelessness. It provides freedom and independence from the tyranny of transportation on someone else’s terms. It allows everyone to fully participate in all facets of our vibrant culture. We all see the world from different points of view and when a broader cross-section of our community is represented, we are able to forge new ideas together to break through the malignant status quo.

As we travel together in this brave new world of transportation, the inclusion of innovative companies and an engaged citizenry are imperative. This free-thinking environment produces solutions to problems which once seemed impassible. It’s equally as vital to have a flexible regulatory framework provided by the City, which affords companies the space to create and the citizens a clear conduit to provide our feedback for the necessary on-the-ground refinement of the products. We find ourselves on the precipice of a long overdue transportation revolution and we must do our utmost to ensure it benefits us all, not just the entrenched few.

Surge pricing, dynamic pricing, variable pricing, all types of pricing

I work for a company that does dynamic pricing in the live entertainment market.

Varying or dynamic prices is a big subject in urbanist circles.  Here, for example, is Ezra Klein / Vox analogizing two promising pricing ideas in the urbanist world:


To the extent that both Uber’s surge pricing and DC’s variable pricing for parking involve pricing, they are similar.  But as these ideas come more to the forefront, I’d love for folks to understand more about the nuances. Continue reading

Next regulatory steps for TNCs and ridesharing

City Council has passed a regulatory framework for Transportation Networking Companies like Uber / Lyft. (The “TNC” name comes from the idea that they are creating networks of drivers and passengers to match.)  A lot of the regulatons are nitty, gritty details of whose insurance applies in what situations, who conducts what background checks, etc.  But the basic framework is pretty straightforward: TNCs are mostly allowed to operate, as long as they follow some rules. In some ways, the rules that they have to operate with are far more liberal than the rules under which taxicabs operate.  This is true in small ways, such as slightly different insurance requirements, and in large ways, like the fact that taxi drivers and companies do not have the right to set their own prices.  (Taxis, of course, retain a right that TNCs don’t: picking up street hails.)  Now that the political hubbub of getting an initial ordinance has passed, I’m sure that reconciling these two frameworks and harmonizing the requirements will be some of the next regulatory discussions, especially the approach toward generating access for the mobility impaired.

However, I’m more interested in talking about what big changes could come next.  First up,


Both Lyft and Uber have begun to operate true ride-sharing services. Uber’s is known as Uberpool and Lyft’s is known as Lyft Line.  With these services, you request a ride (giving you starting and ending destinations) and opt-in to the service. They attempt to match other riders who are taking similar trips, then pick you up in turn and drop you off in turn. If they cna’t match, they will simply dispatch a driver to take you alone. Because of the efficiencies of taking multiple passengers in the same vehicle, the passengers get a discount, the drivers and the TNC make extra money (2 passengers fares with 20% discounts still add up to much more than 1 fare at full price), and everybody else benefits by having fewer cars on the road.To my mind, this is pretty much exactly what we want to encourage. Although I argued that TNCs may reduce congestion by acting as an emergency outlet allowing households to remain car-free, this service has a much more direct effect on reducing congestion, by combining two or more rides into a single ride.

True to their Silicon Valley ethic, both launched these services with questionable legality in California and have since received letters from California regulators telling them they were violating the law. If we in Austin could get out in front of California and legalize carpooling in this form, we could become innovators in not only using TNCs to reduce drunk driving and help car-free households, but also in attempting to use them to lower transportation costs and reduce congestion.


Commute Carpooling

My understanding of the Uber/Lyft platform today is that it’s built on the idea of a driver making themselves available and then picking up requests that are sent to them. They are free to reject requests, but rejecting too many may disqualify them from future work.  An obvious expansion of their services would be for a driver to log in, say where they are going, and then match them with drivers. At this point, the carsharing service moves from being a nifty, well-run vehicle-for-hire service to being an ad-hoc carpool service. A driver who needs to drive into downtown from Northwest can advertise his services and pick up 4 others making a similar trip. The advantage this would have over traditional carpooling is merely convenience and ease of access.  You don’t have to set up a standing carpool, communicate with all your regulars about whether they’ll be late, etc.  Instead, you rely on the network to match those who are driving with those who are riding. I don’t believe that any new regulations are needed for this, but there might need to be changes in the TNC’s model.

Van Service

Eventually, Lyft and Uber may begin butting up against new private, data-driven transit services like Bridj, and at that point, there will be many regulatory changes needed.  Currently, for example, there are limits on the number of passengers in a given cab.  But for commutes such as the weekly, weekend back-and-forth between West Campus and downtown, a private provider might be able to provide a better, more specialized service for these passengers by bridging the gap between cabs and buses.


TNCs are not some solve-all that will single-handedly answer “the transportation question” for the city of Austin, but I have high hopes that they will go on to be far more than just taxis by another name. Indeed, in the process, I hope that taxis will see a huge improvement too.

Should we ban part-time taxi drivers?

Lyft and Uber have (re-)arrived in Austin, offering free rides for a couple of weeks, despite the City of Austin declaring they are operating against the law.  You can’t beat free, so I’ve been taking a lot of these rides.  All of my drivers have been part-timers, looking to supplement income.  This is in stark contrast to taxicab drivers, who are pretty much all working more-than-full-time hours.

The economic reasons why taxi drivers are full time make a lot of sense. Cabs are dedicated-purpose vehicles, going for the most part unused when they aren’t working.  Taxi licenses are an extremely scarce resource due to city regulations.   The taxi industry will find a structure to make sure these two expensive resources are working as often as possible.  Taxi licenses are issued to individuals, though; so this means that any structure that ensures that we have a lot of usage of our limited taxi licenses also ensures that our taxi drivers are working overtime.  The form this takes in Austin is high costs for either purchasing or leasing a taxi and high “terminal fees” for getting the right to use the taxi companies’ dispatch system.  Every month, each taxi driver starts deep in the hole and has to work a lot of hours just to break even, to pay for the fixed costs of their cab and their terminal fee.

So how do Uber and Lyft turn this dynamic around and allow for part-time drivers?  Uber and Lyft (whatever the legalities of their operations) are not limiting themselves to a city-capped pool of taxi licenses, nor are they limiting themselves to cars that are used exclusively as taxis. If a driver decides not to work Uber for an afternoon, a week, or a month, this doesn’t take the expensive fixed cost of a taxi out of their network, nor does it take the scarce resource of a taxi license out of their network.  Because of this, Uber and Lyft can do away with the terminal fee and instead just take a percentage of each ride as a dispatch fee.  Felix Salmon does the math and finds that, if the numbers are to be trusted, a full-time driver with Uber makes pretty good money compared to most taxi drivers, but a part-time driver does very well indeed.

There are many, many issues at play with Uber and Lyft, but from a very zoomed-out perspective, current city regulations make it uneconomical to have part-time drivers, and Uber and Lyft have come up with a model to change that.  Now, why we do we care?  Because taxis have very variable demand.  At peak hours, the number of licenses Austin hands out aren’t nearly enough to keep up with the demand.  But because drivers are starting off so far in the hole, they can’t just work peak hours; they have to work additional hours even if they’re very poorly paid for those hours, because they have to pay off the high fixed costs. So our current structure works for neither drivers nor riders: drivers have to scramble for every last ride in off-peak, but there still aren’t enough of them to give rides on-peak.  A structure (whether Uber/Lyft or something else) that allows drivers to come online during peak but doesn’t force them to work tons of off-peak hours could be beneficial to drivers and riders alike.  This presents a test of sort for any change in regulations.  Will it allow the economics to work for part-time drivers?  If not, then it really hasn’t accomplished much.

My email regarding Uber / Lyft / Sidecar, etc.

Mayor, Mayor Pro Tem, and Council Members–

I urge you to vote yes on resolutions 24, 25, and 26 regarding transportation networking companies. For people like me who do not drive, paid rides are an essential emergency backup. However, I have had so many bad experiences with taxi companies telling me they do not have enough capacity to give me a timely ride that I cannot consider them a reliable backup.

I use taxis when I am too tired, too sick, or carrying too much to walk or use public transportation. I have used taxis to take friends home from the hospital, to take pets to the vet (not allowed on Cap Metro buses), and to take myself to doctors’ appointments that weren’t on transit routes. I have been told that I will have a long wait because most drivers don’t want to work off-peak and that I will have a long wait because it was peak hours and most drivers were already occupied. Waiting for a long time for a ride to a hospital is the sort of defining experience that makes many people give up on living without a car.

Living in Austin without a car is difficult enough. Making it easier to sell rides will give more security to those of us who cannot drive to know that when we really need it, there will be a timely ride for us.