There's a new player in town, and there's a lot of chutzpah around the rollout: New Taxi Service Lyft Set To Go In Pittsburgh (Volunteer Drivers Face Insurance Questions). (Post Gazette, Feb.6 2014)
Another great article was in Pittsburgh City Paper: Bumpy Road Ahead?: At least one ride-share company plans to launch here this week, but how long it will be allowed to operate is another story (CityPaper, Feb 5 2014)
What's Lyft, How's It Work?This is a pretty neutral description. Customers download a smartphone App that they use Facebook to login to. They tell the App when they want a Lyft. The App notifies the nearest Driver that's available (on-duty). The Driver gets the location, destination, a picture of the customer, and sees the Customer Profile. If the Driver accepts the ride, they click YES.
When a driver accepts the ride, the Customer gets a picture of the driver and sees the Driver Profile and chooses to accept it. When both say YES, the driver comes over and picks the Customer up, in the car with a pink moustache on it. The driver and passenger exchange fist bumps. The passenger sits in the front, and gets to pick the radio station.
At the destination, no money changes hands. The Customer pays through the App, including the tip. The Customer rates the Driver. The Driver rates the Customer.
Sounds Innovative. What's the Problem?It does sound kicky and fun but there are major issues, mostly like: legality, insurance, liability, definitions, taxes, ADA, race, and class. Things like that. But hey, the moustache is pink!
Lyft is not a taxi company (in spite of the PG headline). They don't have a taxi license. In fact, their website tells you that they're not a transit company. And their drivers are not employees, they're subcontractors which is an important legal and liability distinction.
Since Lyft isn't a taxi company, your driver isn't a taxi driver, and the car isn't a taxi: it's a jitney service. Jitney services are illegal. They've previously existed in mostly poor, black, and immigrant neighborhoods that legal cab companies don't serve. Jitney services face periodic, low-level law enforcement sweeps but they are clearly operating outside of the law. You get in a crash as a jitney passenger, you're not covered by anything.
Lyft is a jitney service for white people, with AEO-dressed drivers. This map shows Lyft's Pittsburgh coverage area and their "hot zones":
What's curious is that Lyft's illegal jitney service has been embraced by government officials in a way that the other (legacy, black-operated) jitneys haven't. In fact, Lyft has been embraced in a way that tax-paying Yellow Cabs hasn't been loved. If I was a Yellow Cab driver, or a Jitney driver, I'd be like WTF?
A few quotes from grown-ups who aren't paid by Lyft:
- Rosanne Placey, spokeswoman for the Pennsylvania Insurance Department: "Once you start using your vehicle for business, it's considered commercial, so you need a commercial policy or an add-on to your personal policy."
- Jennifer Kocher, spokeswoman for the Pennsylvania Public Utility Commission: "If the driver is receiving compensation, they are supposed to have a commercial license." she said. And, drivers who are found operating a commercial vehicle without a commercial license could face criminal charges, she added.
Why Pittsburgh and not Philadelphia? As a matter of fact, the CityPaper article talks about Sidecar launching a ride-share service in 2013 in the City of Brotherly Love, and maybe that's what Lyft is in Pittsburgh:
But when Sidecar launched its own ride-sharing service there last year, it was promptly shut down. "When we became aware of them operating, we conducted a sting operation," says James Ney, director of the Taxicab and Limousine Division of the Philadelphia Parking Authority. "We issued stiff citations and impounded the vehicles." Ney says Sidecar was fined for dispatching without a license; Sidecar drivers were charged with operating unauthorized taxis.
We have laws and regulations for reasons. They evolved out of a need to protect people. There are insurance, training, testing and licensing requirements for carrying passengers for money.
It's not an innovative business model to say, We're going to skirt the laws, we're going to hide behind a facade, and we're going to put young people at risk because they will have to cover their passengers - even though we know their insurance won't. That's why they're subcontractors and not employees. Lyft makes more money that way.
Cynical misrepresentation isn't business innovation.
Embracing companies that put the public at risk isn't responsible government.
It's all fun till somebody gets hurt.