National Consumers League

Ride sharing services battle it out

sg.jpgThe war is on in ride sharing business!  According to the Wall Street Journal, Lyft is joining forces with a Chinese start up – Didi, which provides ride-hailing services so companies in the alliance can share services and ally themselves against Uber. Lyft hopes the alliance will draw more international users because the app, which is used in China, will be usable on Lyft in the US. So customers won’t have to pay a foreign transaction fee, which another part of Lyft’s strategy. 

Uber is now available in 60 countries! It’s valued at more than $50 billion. But, it has fierce competition everywhere it is present and its competitors are also earning money hand over fist.

Have you ever heard of BlaBlaCar? I hadn’t either – they are a European start up valued at $1.5 billion that brokers long distance ride sharing between drivers and passengers. It’s huge and operates in 19 countries and has 20 million users. BlaBla thrives where there are gaps in public transportation or where it’s too expensive. For example, a customer can grab a ride from Paris to Prague for $57.  BlaBla doesn’t anticipate a US presence anytime soon because gas is cheap here and car ownership is affordable, unlike in many EU countries.

I think these “disruptive” technologies are exciting and good for the economy, including Uber, Lyft, BlaBlaCar and other ride sharing start-ups.  In the case of Uber, Sidecar, and Lyft, the fight isn’t to try to drive them out of business because they aren’t unionized taxi drivers, because it’s not going to happen and consumers love the service so it’s a losing battle.

The model instead should be what Seattle City Councilmember Mike O’Brien suggested. His legislation would certify that in Seattle, non-profit organizations are eligible to represent drivers. These organizations would receive a list of all the drivers in the city that have performed a minimum number of trips and will have 120 days to show that a majority of these employees want to be represented. When verified, the non-profit will speak on behalf of the employees and give them a place at the table. The city is essentially saying, “If you want to do business in our town you have to let drivers organize and give them a voice.” I think that’s the way to go. Don’t drive out the technology, just organize the workforce and give them a voice. Uber’s design is brilliant, but workers must be able to share that wealth and have a say in how the company operates and the many benefits it can provide to workers and consumers.