Lyft Continues it's Battle to Expand to NYC

Lyft has expanded to 60 US cities and had hoped make it 61 with the addition of New York City last Friday. However, NYC has declared Lyft an "unauthorized service" and threatened legal consequences if the ride-share app launched. Lyft held off as long as they could before announcing they would work with the Taxi and Limousine Commission:

"Today we agreed in New York State Supreme Court to put off the launch of Lyft's peer-to-peer model in New York City and we will not proceed with this model unless it complies with New York City Taxi and Limousine regulations. We will meet with the TLC beginning Monday to work on a new version of Lyft that is fully-licensed by the TLC, and we will launch immediately upon the TLC's approval."

Lyft assured the public that there was no TRO (temporary restraining order) or injunction, but that everyone agreed to meet Monday if Lyft held off on their launch. Wall Street Journal reports that the decision was less nonchalant than Lyft lets on. They state that familiar face, New York Attorney General Eric. T, Schneiderman (from the Airbnb's subpoena in NYC earlier this year) and plaintiff Benjamin Lawsky, filed court papers on Lyft's original launch date in order to stop the company from operating in the state. 

"Lyft's arguments are a disingenuous attempt to disguise old-fashioned lawbreaking that jeopardizes public safety," Messrs. Schneiderman and Lawsky said in a news release. Schneiderman is no new face to opposition of the shared economy and knows that NYC will set a standard for other cities worldwide. 

Lyft's competition Uber, managed to get licensed in NYC after initially launching without the TLC's approval. Some have speculated that this was because Uber had recently hired Ashwini Chhabra, the then TLC deputy commissioner for policy and planning. Many within the taxi industry find this to be very suspicious:

"About 4-5 weeks ago, [we] ... accused Ashwini of working for Uber presently and in the past," Evgeny Freidman, who owns one of the largest taxi fleets in New York, wrote to TLC Commissioner Meera Joshi shortly after Chhabra's hire, according to the New York Observer. "I would insist as a major stake holder in this industry ‎that the TLC open a [Department of Investigation] investigation into this matter."

However, several industry experts believe that Chhabra's hiring had nothing to do with Uber's licensing but rather that Uber agreed to play by the TLC's rules, which up until now, Lyft has refused to do. Uber has embraced regulations and operates only with city-licensed vehicles. TLC spokesman, Russell Murphy states:

"From our perspective, … Lyft is unique from Uber in a larger sense because they’re not following TLC regulations. Uber, at least from what the TLC says and what Uber says, is following all the regulations,"
 

So yet another legal battle to watch in the sharing economy. Let us know what you think, will NYC grant Lyft a license? Or use them to set an example for other "unauthorized services"? To read more check out the Business Insider article on Why NYC's Lyft Crackdown Probably Isn't Linked To Uber and Wall Street Journal's coverage of Friday's decision.

Taxi Protests Gridlock Downtown Washington DC

A caravan of angry taxi drivers gridlocked downtown Washington DC this Wednesday. The source of their anger? Ride-sharing services such as Lyft, Uber and Sidecar.

A taxi caravan of hundreds drove slowly and honked car horns as they held up traffic on Constitution Ave on Wednesday. Photo via Washington Post

Photo via Washington Post

Cab drivers all over the world have been protesting these new ride-sharing services claiming they have an unfair advantage over traditional taxi drivers. Cabbies must follow strict regulations and require special licensing to operate. Regulations on ride-sharing apps are still being decided and at best, a gray area. 

Wednesday's gridlock has been the newest form of protest from the taxi-industry and it wasn't just in DC. Drivers in London, Paris, Madrid and Berlin brought traffic to crawl earlier this month, honking their horns and waving signs denouncing the local transportation agency and taxi apps.

Wednesday's protest shows that cab drivers will not back down and raises concern as to just how far they will go. Considering that some of these protests have gotten violent, the question now is how (and how quickly) regulators will respond. Driver's voices have been heard in some areas including Virginia, who recently issued a cease and desist letter to Lyft. Where in other cities, such as Seattle, ride-sharing apps have been welcomed as competition to local taxi services. 

"Authorities said Pennsylvania Avenue Northwest opened in both directions around 1 p.m. The roadway had been closed from 15th to 9th streets Northwest because of the protest. The street closure caused other delays in the downtown area. Ironically, because of the protest, some people reported difficulty hailing cabs."

Check out the Washington Post article and let us know what you think. Are these protests getting out of hand or are they warranted? 

Seattle decides in favor of Uber, Lyft and Sidecar.

Back in March, Seattle city council voted to heavily regulate ride-sharing apps like Uber and Lyft by capping the number of active vehicles to 150 each. Considering Uber claims to have around 1,000 drivers in the city, this initiative would have severely limited each company's capacity to meet demand.  Yet by mid-April these regulations were suspended due to more than 36,000 signatures on a repeal petition (double the 16,510 required to force a public vote).

Now, after more than a year of debate, Seattle Mayor Ed Murray announced an agreement between the taxi industry and ride-share apps. App-based transportation platforms such as Lyft, Uber and Sidecar can continue to operate without any limit of drivers. The key terms of the deal include:

• Transportation network companies and their drivers will be licensed and required to meet specific insurance requirements.
• The City will work with the industry to clarify or change state insurance law to account for recent changes in the industry, similar to recent actions in Colorado.
• There will be no cap on the number of transportation network company drivers.
• The City will provide 200 new taxi licenses over the next four years.
• Taxi and for-hire licenses will transition to a property right that is similar to a medallion in other cities.
• For-hire drivers will have hailing rights.
• An accessibility fund will be created through a $0.10 per ride surcharge for drivers and owners to offset higher trip and vehicle costs for riders who require accessibility services.

This is a huge change from the March decision not only because of the unlimited drivers, but also because you can now hail for-hire drivers, a right originally reserved for taxi's only. 

“I believe Seattle once again will lead the nation in showing how what appears to be conflicting interests can actually come together,” Murray said after announcing the agreement. “We have deregulated a highly regulated monopoly, allowing taxis and for-hires to become far more competitive than they are in the current situation. We are recognizing that a technology exists that is rapidly changing the marketplace.”

GreenCab Taxi General Manager Chris Van Dyk, talked with Geekwire about the decision:

“The experience in Seattle in years past, in San Francisco and in Ireland now, is that if you have unlimited entry, if you have no limit on the number of taxi and for-hire vehicles, operators simply cannot make a living wage, and the industry goes to hell in a handbasket, and in a relatively short time,” Van Dyk told GeekWire. “The economics of the industry are counter-intuitive, because of the low threshold of entry. Apps do not change this.”

We have yet to hear if the taxi industry will choose to fight the decision or not. 

Seattle joins a small handful of cities allowing ride-sharing apps including Chicago. It seems like every city has a different attitude when it comes to the sharing economy, Miami police are impounding Lyft drivers while Uber is banned in Brussels and in high court in London. We're curious to see if this decision holds in Seattle and if will influence other cities still in debate. Regardless, it's becoming more and more obvious that the sharing economy is here to stay.

Check out the complete article by Geekwire and let us know what you think.

Trust and the Sharing Economy

This last week several articles came out regarding one of the collaborative economy's most popular keywords, trust. It's a massive piece of what it takes to be an active participant of the peer economy and now a hot topic of conversation.  

Jason Tanz' recent Wired article "How Airbnb and Lyft Finally Got Americans to Trust Each Other" covers everything from interviews of Sharing Economy users to a history lesson on when America's started losing trust in each other in the first place (according to Tanz, sometime in the mid-19th Century). 

Shortly after Tanz' article released, Christine Lagorio-Chafkin of Inc. published "Why Trust Is the Sharing Economy's Pipe Dream", which concluded that any sense of real, organic trust "still feels like a hologram".

A recent Wired cover story seemed poised to explore how companies in the sharing economy foster compassion, community, and trust, but it actually surfaced a more complex and compelling argument, one with which I agree: These companies actually have built quite a sturdy backbone of protections for users (certainly these fail from time-to-time, but they exist) that they've eliminated much of the need for that elusive trust by customers.

Lagoria-Chafkin goes on to quote Tanz's article who writes:

Indeed, for the time being the boundaries of the sharing economy are protected fairly rigidly. If you’ve ever been caught driving more than 20 miles over the speed limit, you can't rent a car on RelayRides. Aspiring Lyft drivers must pass a background and DMV check and get approved by a mentor, who judges applicants not just on driving ability but on personality. DogVacay hosts go through a five-step vetting process that includes training videos, quizzes, and a telephone interview.

She goes onto say:

In comparing the evolution of the modern marketplace economy to the explosion of institutional banking and insurance in the early 20th century, Tanz continues: "this new system acted as a trust proxy; it didn't require people to trust one another, because they could rely on a centralized system to protect their interests."

The digital marketplace as a trust proxy: Now this makes a lot more sense. 

Both articles make interesting points. Read Jason Tanz's enttire article advocating trust here and Christine Lagorio-Chafkin's rebuttal here. 

What do you think? Is the Sharing Economy based on real, organic, neighborly trust? 

Seattle Suspends ride sharing regulations one month after passage

Just one month ago, Seattle City Council enacted new regulations on rideshare companies like Uber and Airbnb. Yesterday, Uber, Lyft and Sidecar submitted more than 36,000 signatures on a repeal petition forcing a public vote. An ordinance so challenged is suspended until the public vote.

The suspension — whatever happens in the future — is a major victory for companies offering an alternative to Seattle’s much-criticized taxicab service.

In a wider sense, it is a win for the city’s technology economy, which took to heart the cause of ride sharing, arguing that Seattle must be a 21st century city open to innovation and new ways of providing services.

This is huge news for not only Seattle ridesharing companies, but for the technology driven collaborative economy in general. A public voice this strong is an obvious indicator of the popularity of sharing economy services.

Check out the entire article on the Seattle Pi's Blog and let us know what you think. Is Seattle's response to city regulation only the beginning? 

Seattle City Council Votes to Limit Rideshare Services

City legislation around the world are making decisions on where they stand in the sharing economy. We've seen San Francisco Announce their Sharing Economy Working Group and have become the poster child of American Shareable cities. Other cities like Amsterdam and Seoul, Korea have been endorsing the sharing economy and are actively working to become shareable cities. Even the United States Congress has started to address the sharing economy and it's impact. But not everyone is convinced that this movement is right for their city. Portland, Oregon has opted to exclude ridesharing until it can fully understand potential impact.

The latest news is from Seattle, Washington where city council has met several times over the last few months to discuss ridesharing and recently decided that they would limit the amount of rideshare services to 150 drivers (per company) on the street at any given time of the day. So far the ruling seems to satisfy no one. Lyft, Uber and Sidecar all released statements of extreme disappointment in the ruling.

In a statement, Lyft outlined its objections.

By passing an ordinance that does not prioritize public safety or support consumer choice, members of Seattle’s City Council have shown that their sole intent is to eliminate competition and protect existing industries in Seattle. This ordinance will eliminate Lyft in Seattle; local residents who drive for Lyft on their way to work, while they are running errands, or on the weekends to make ends meet will no longer be able to act as drivers, especially when passengers who have chosen to live car-free in Seattle need them most. While safety is often brought up as a reason to apply an old regulatory model to an innovative transportation solution, the truth is that new technology provides an opportunity to increase safety above and beyond what has been done previously. In comparison to existing requirements, Lyft’s $1M commercial liability policy is more than three times the $300,000 requirement of Seattle taxis. Despite today’s disappointing decision, we will continue to stand strong as a community and do everything possible to ensure a path forward that allows ridesharing to thrive in Seattle.

San Francisco’s Uber released a statement by its general manager in Seattle,  Brooke Steger.

It is extremely disappointing that the Seattle City Council Committee on Taxi, For-hire and Limousine Regulations has chosen to ignore the tens of thousands of their constituents who support uberX and, instead, decided it is a good policy to protect the taxi industry and effectively shut down uberX in Seattle as we know it. This decision will put hundreds of small businesses out of work and leave them without an opportunity to earn a living. The Committee has sent a strong message that they support the status quo over opportunity, transportation choices and safety. We hope when these regulations come to the full Council that innovation and safety win the day.

And Sidecar weighed in with a statement similarly expressing disappointment.

Sidecar is focused on offering safe and affordable transportation in Seattle. We share the Seattle City Council’s goal of making transportation safe for its residents. In fact, we have safety measures in place that exceed what is required by Seattle taxis. But the City Council’s decision today to cap the number of Seattle rideshare drivers is not about safety. It’s designed to protect the taxi industry by eliminating competition.These regulations move Seattle in the opposite direction of innovation by restricting consumer choice for residents who depend on safe and affordable transportation alternatives like Sidecar. Seattle residents want choice in transportation. We are disappointed that the Seattle City Council moved in favor of regulations designed to protect the narrow business interests of the taxi industry over the interests of its citizens.

- Check out SFGate's Blog Post for more info

It's easy for supporters of the peer economy to be upset by rulings such as this but these aren't easy decisions to make. April Rinne explains the dilemma best in her perspective piece "How Shareable is Your City".

To date, city governments and the sharing economy companies have rarely been seen as partners. More often, city leaders have dealt with transformative new business models from a reactionary position.  This is understandable: the rules governing many new businesses were developed for an industrial age in which mass consumption and ownership were the norm, and before today’s technologies existed, so they don’t fit within current regulatory structures. Moreover, regulators must strike a balance between competing pressures – from the public, incumbents and a variety of other stakeholders – to encourage innovation and maintain public safety.

The proposal in Seattle still needs to be officially passed by the entire city council on March 10 and would take effect 30 days after being signed into law by Mayor Ed Murray. 

What are your thoughts on this? Do you think city council's ruling was fair? If so fair to whom?

The 'Sharing' Hype - Do companies like Lyft and Airbnb help democratize the economy?

“How can a movement that has been started by corporate and venture capital be any kind of socialism?”

2013 marked significant growth in the new sharing economy, ride-sharing company Lyft saw a twenty fold increase in users and room-sharing platform Airbnb gained 6 million customers. Last year also exposed the legality issues of sharing services and has now intertwined the sharing economy with regulators. Currently, most legal focus is on ride-sharing (e.i. Lyft and Uber) and room-sharing (Airbnb). However the sharing economy has a directory of hundreds of different platforms that provide peer-peer sharing that have the potential to violate some sort of established regulation. The sharing economy has been referred to as an "ugly throwback to the dark days of socialism". The article by In These Times asks "Is the sharing economy in fact socialist, or in any way anti-capitalist?".

In these Times met with David Golumbia, assistant professor of English at Virginia Commonwealth University and author of The Cultural Logic of Computation, Neal Gorenflo, co-founder and publisher of Shareable Magazine, and the SolidarityNYC collective to discuss the sharing conundrum. Check out the full article here and let us know what you think. Does the sharing economy encourage an anti-capitalist economy? Or a socialist one?

Taxis vs Ride-Share

One obvious issue arising from the increase in ridesharing companies is the impact it will have on the taxi industry. The taxi industry is highly regulated by the government including how many cars they can put out and how much they are allowed to charge. Taxi drivers are mandated to obtain special licensing as well as attend special courses just to be allowed on the road. As of right now, most ride sharing drivers are not required to meet any of these regulations along with many others.  Some taxi drivers are already seeing a financial impact and the debate is reaching government levels. Jon Brook's article "Will 'Ride Sharing' Kill San Francisco's Taxi Industry?" highlights the frustration that taxi driver's are feeling since Lyft, the Ride Sharing App, started in their city in 2012. 

“On the streets of San Francisco, what might be called the “Mustache War” has begun, pitting the traditional taxi industry against the networked ride services like Lyft (of the pink mustache), Sidecar and UberX. In September, the California Public Utilities Commission approved regulations to oversee the ride-service startups, which allow passengers to hire private drivers through smartphone apps.”

— KQED

San Francisco drivers aren't the only ones feeling an impact. In the article "Taxis vs ride-share: How one cabbie views the industry's transformation", Frances Nazarian of Los Angeles says that business is slower since ride-sharing came to town, but she is more bothered by what she sees as unfair competition. 

“The likes of Uber don’t have nearly as many regulatory hoops to jump through. Unlike taxis, they can raise their prices during peak times, and they can pick and choose which rides they accept and which neighborhoods to serve.

“I guarantee I could get on the Uber app right now and call from where we are right now, South Central, and not one Uber driver would take that call, or Lyft or Sidecar,” said Nazarian. “Basically, they want to work in the most affluent areas of town.”

Uber has been advertising for drivers in LA, promising they can make up to $60,000 a year.

That’s twice what Nazarian averages.”

— SCPR

San Francisco established their Sharing Economy Working Group in March of 2012 whereas Portland has chosen to wait and see how other cities regulate before allowing ride sharing.  

What do you think? Are taxis at a disadvantage? Do you see similar issues arising in other areas of the sharing economy?