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Car and Driver
Lyft, Uber, and other app-based auto services are changing how we get from point B to point C in L.A.
It’s sometime around midnight on a Thursday, when after a dinner party in Echo Park, I realize the friend who’d brought me is gone. Being that I’m one of those mythical creatures people occasionally whisper about in Los Angeles—a resident who doesn’t own a car—I’m now without a ride to get me the few miles back to my apartment.
If I had been in the same situation last year, I would have called a cab, waited for 20 minutes, and stopped at an ATM when the driver inevitably complained that he preferred a cash payment to my credit card. On this night, however, I just tap the Flywheel app on my phone. If I want to, I can track the driver’s whereabouts, too. Five minutes later I’m in the backseat of a Bell Cab Company Prius en route to my home. The $12 fare is automatically debited from my credit card along with a 20 percent tip. The modern business transaction is automatic and cold, but that matters little when your destination is a warm bed.
Flywheel is just one of several app-based taxi and rideshare services that have popped up in Los Angeles since Uber soft-launched here in February 2012. While some, like Flywheel and Hailo, work in tandem with existing cab companies, others, like Lyft and Sidecar, rely on freelance citizen drivers who use their own cars to shuttle customers. For cab companies, this has been a serious point of contention. “My view is that they fit the traditional definition of taxicabs and they provide the same kind of metered trips that we do, but they operate outside the rules and regulations that we are required to operate within,” William Rouse tells me by phone one afternoon as he fills up his car at a gas station. Rouse was until recently the president of a trade group called the Taxicab, Limousine & Paratransit Association, and he’s the general manager of Yellow Cab of Los Angeles.
The nine cab franchises doing business in L.A. endure a barrage of scrutiny to help ensure passenger safety: Drivers must go through fingerprinting and criminal background checks by the city, which automatically denies applications from sex offenders and people who have been convicted of certain felonies, like burglary, credit card fraud, selling drugs, and DUIs that resulted in injuries (DUIs not resulting in injuries disqualify applicants for three years). Vehicles must be inspected annually by the L.A. Department of Transportation. Drivers must be “well groomed,” their vehicles must be able to transport wheelchairs, they must have functioning heating and cooling systems and radios—the list goes on. Sidecar and similar entities, the argument against them goes, don’t fall under such strict regulations.
But those companies and their drivers beg to differ. Scott, who asked that I not use his last name, works for Lyft, which famously requires its drivers to plaster a giant pink mustache on their front bumper. Before being allowed to join the company in 2013, Scott had to undergo a series of checks not unlike those faced by franchise cabdrivers. Lyft drivers must be at least 23 and pass a criminal background check, performed by Sterling Infosystems, that is sometimes more stringent than the city’s standards. Lyft drivers, for instance, cannot have had a DUI conviction in the past seven years. More than two moving violations in the past three years disqualify a person as well. Scott also went through two interviews, and since Lyft drivers provide their own wheels, a company representative inspected his 2012 Honda Civic (cars built before 2000 aren’t accepted). What’s more, Scott, who wanted to supplement a bartending job as he pursues an acting career, is covered by the company’s $1 million in excess liability insurance when he ferries passengers.
“The riders are something of a closed group socioeconomically,” he tells me, “as you not only need a smartphone, but you must have heard of this app and have a Facebook page that you log in through and a credit card that you can link to the system, which gets billed directly. No cash is exchanged in the vehicle as policy.” Where payment is concerned, in California Lyft will soon switch from a suggested-donation system calculated by the app to a set fare that is comparable to what regular cabs charge, including a 20 percent tip. (The company recently began experimenting with a mandatory 25 percent tip at certain times of the day.) Scott, who tends to drive on Fridays from 9 p.m. to 1 a.m., gets to keep 80 percent of his donations; the other 20 percent goes back to Lyft. “I can pretty much guarantee a good rate on Friday nights,” he says. “I usually make between $26 to $31 per hour.” According to the Bureau of Labor Statistics, regular cabbies average about $11.55 an hour in L.A., which may explain anecdotal reports of professional drivers leaving the cab business behind to work for the newcomers.
Is it possible that at least some of the pushback from traditional cab companies has to do with money? “I think that’s a real part of a lot of this,” says Lyft cofounder and president John Zimmer, whose San Francisco-based company began operating in L.A. last January. Zimmer contends there is room for both types of business models to flourish. “This isn’t a zero-sum game. I feel like we’re competing more with the concept of people owning cars than we are with existing cab companies,” he says. “By providing our service, we’re allowing people more opportunities to not have cars, thus making the need for more alternative options necessary. ”
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It would be an understatement to say that L.A. isn’t known for its cab culture. With roughly 2,300 official cabs on our streets, we have about a fifth of the number operating in New York City. But the popularity of the transportation apps—whether for taxi-affiliated services or for peer-to-peer companies like Lyft—does seem to fit a larger shift in driving habits and attitudes. A study published last August by the nonprofit California Public Interest Research Group Education Fund shows that per-person driving miles in California are down by almost 8 percent since 1999 (and are down in 45 other states as well). In the L.A.-Long Beach-Santa Ana area, driver miles dropped 2.3 percent between 2006 and 2010.
I promised myself I would never own a car again after moving to New York in the mid-aughts and living without the hassles of having a car—the traffic, the tickets, the tow trucks. I’ve held to that promise since returning to L.A. three years ago, in part because there are so many more options than when I lived here the first time. The bus network is vast, and Measure R is transforming the city back into one where light-rail is a viable option for commuters. The Metro Expo Line, which is already exceeding expected ridership, is slated to link downtown with Santa Monica in 2015, providing a happier alternative to the city’s maddening east-west traffic pileup. For those inclined to pedal rather than rely on public transportation, there is the slowly emerging network of bike lanes and sharrows (those share-the-road street markings) across the region. Mayor Eric Garcetti has said accommodating bicyclists is a priority in his plan to push L.A.’s transit into the new century. Meanwhile some 15,000 Angelenos have become members of Zipcar, the auto-sharing service introduced here in 2006. By allowing you to borrow a vehicle for as little as an hour at a time, Zipcar and its competitors provide a way to drive across town without needing to own a car.
The app-based transportation companies that have set down stakes more recently, as Lyft’s Zimmer says, are simply offering yet more options to a populace that wants them. When Uber launched in 2010, the San Francisco-based company used its app to connect riders with luxury sedans and SUVs belonging to existing limousine services and charge lower fees than those services. Since then, the company has rolled out UberX, which operates like Lyft (drivers provide their own cars), and begun experimenting in Chicago with Uber Taxi, which partners with Yellow Cabs on a driver-by-driver basis.
That’s the model used by Taxi Magic, Hailo, and Flywheel, the service I used to get home on the night of the dinner party. “Taxis are really where it’s at,” says Steve Humphreys, Flywheel’s CEO. “It’s what people want to use, but the issues have always been availability and quality.” Humphreys says he considers Flywheel to be a tech company rather than a taxi service, providing GPS technology and app-hailing to cab fleets that are getting hammered by forward-thinking competitors. Founded in 2009 as Cabulous (in, you guessed it, San Francisco), Flywheel now has contracts with three cab companies in charge of more than 1,000 vehicles in Los Angeles (Lyft and Uber would not comment on how many vehicles are operating under their technology).
Michael Calin, the general manager of Bell cabs, says that less than eight weeks after partnering with Flywheel, his company was already getting about 50 fares per week from the app. What’s more, he says, “there was no resistance from the city whatsoever.” Three months before, the Los Angeles Department of Transportation had sent cease-and-desist notices to Uber, Lyft, and Sidecar when authorities raised concerns about how equitably safety regulations were being applied to rideshare operators.
In late September, amid copious media coverage, the California Public Utilities Commission voted to allow and regulate Lyft, Sidecar, and Uber’s UberX service, designating them “transportation network companies.” Under the ruling, the businesses were allowed to continue operating in California but would face controls—overseen by the CPUC—analogous to those imposed on regular cab companies. They include everything that Scott, the Lyft driver, said he had previously faced and more: thorough driver background checks, driver training, and commercial insurance policies with a minimum of $1 million per-incident coverage. The CPUC also left in place regulations prohibiting transportation network companies from operating at LAX.
Though the move should have pleased people like Yellow Cab’s Rouse, he still sees a fundamental lack of equity in the CPUC’s actions. “Why isn’t a government agency taking it upon itself to vet the drivers?” he says. “Why are they not requiring annual, postaccident, and random drug testing? What is it about the public safety that isn’t important to protect?”
L.A. city councilman Paul Koretz echoes Rouse’s sentiments, telling me he has “a lot of concerns about these 21st-century bandit cab companies. They have apps, but otherwise they’re largely unregulated. And I’m very skeptical that the CPUC, with its lack of staff, is going to be able to enforce any of its regulations.”
Uber wasn’t satisfied with the ruling, either, and has filed for a rehearing. The company, it seems, bristles at the thought of any state regulation. “In fact and law, Uber does not provide transportation services of any kind and does not own, lease, or charter any vehicles for the transportation of passengers,” reads the petition. “On the contrary, Uber is a technology company that licenses the Uber App to transportation service providers.”
As that latest salvo makes its way through the courts, Uber has started adding more whimsical services to its menu. On National Cat Day, in October, Uber users in Seattle, New York, and San Francisco could get a kitten delivered for a 15-minute, $20 snuggle session. In December Uber teamed up with Home Depot in various cities to deliver Christmas trees for $135.
They were attention-grabbing ploys, to be sure, but neither gained the attention that UberX’s other gambit in December did, when the company began charging almost eight times the usual rate during periods of especially high demand in certain cities. That the move coincided with winter storms on the East Coast led to blogospheric rantings about gouging vulnerable customers. Then stories emerged of people in Los Angeles being hit with whopping surge-pricing fares, too. Maybe some better-heeled Angelenos will pay up, but the move is a potential boon for Metro’s marketing team. Because while taking the bus or light-rail may not be as cushy as taking a cab—whatever the company—at $1.50 a ride, it’s still the best deal in town.