It seems like a lot of the breaking news happens on Thursday/Friday so we’ve decided to push the round-ups to Saturday for now. This week, RSG contributor, John Ince takes a look at what it means to be courteous in a rideshare vehicle, Uber’s phantom cab problem and more.
John and I were both intrigued by the collapse of Homejoy last week, especially after they cited customer retention as one of their biggest problems. This is a common problem for lots of today’s start-ups and it’s an important lesson for those in the space.
The Murky Etiquette of Ride-Hailing Services
Sum and Substance: Harry Campbell is used to people throwing up in his car. He’s also shuttled around amorous couples who were going at it in the back seat. The Los Angeles-based Uber and Lyft driver says there’s not much he can do. As a driver—especially working the post-bar crowd—you’ve got to be ready to pull over, look for warning signs (like a user who can’t drop a pin properly to save his life, or an especially belligerent person) and keep Ziploc bags handy. … It’s no longer as simple as hailing a taxi, sitting in silence, and hopping out. The social dynamic is amplified. There’s the potential for greater accountability; if a driver’s ratings dip too low, he could be out of a job. Since drivers and passengers both have profiles and ratings, there’s a unique etiquette involved. Here’s how to avoid being your driver’s nightmare customer throughout your journey together.
My Take: This is a good primer for driver passenger / etiquette. The author gets some good stories from a range of drivers and passengers including our very own Harry Campbell.
Uber’s Phantom Cabs
Sum and Substance: When Heather*, a driver who has been working for Uber for about eight months, opened up the passenger app a few weeks ago from her residence, she noticed something peculiar. The app’s map showed four drivers on the streets immediately by her pick-up location. Yet, the estimated wait time for the closest car was 17 minutes, and there were no other drivers in sight. … There are two versions of Uber’s app: one for drivers to use to find passengers, and one for passengers to use to hail a ride. Frequently, drivers login to the passenger app to see where other drivers are so they don’t sit unknowingly in the same one-mile stretch as the competition. … What the passenger app shows can be deceptive, however. The discrepancy Heather noticed wouldn’t have been obvious in a busy location with a shorter wait time. But in more remote areas, the app clearly shows drivers where there are none. …
My Take: Speculation that Uber is deceiving customers through phantom cabs has been a frequent and controversial topic on Uber driver message boards for awhile now. The authors of this article try to get to the bottom of the issue, but get contradictory statements from Uber about whether there really are phantom cabs on the app. Chalk this one up to the ongoing mystery of life.
HotelTonight And Lyft Can Now Be Expensed by 30M Employees Via Concur
Sum and Substance: Concur, the travel management and expense toolset that was purchased about a year ago by SAP, announced that it is partnering with HotelTonight and Lyft to allow employees to easily expense the two services. Used by over 20,000 businesses and 30 million employees, the platform is an easy way for employees to book and get reimbursed for travel and other expenses.
My Take: Just one more sign that Uber and Lyft are slowly but surely being woven into the fabric of life, especially the fabric of corporate life in America. This has to be good news all around – for drivers, for passengers and for TNCs.
What Really Killed Homejoy? It Couldn’t Hold On To Its Customers
Sum and Substance: A cleaning company charges north of $85 for a 2.5-hour house cleaning, but to rope in as many new customers as possible, it offers the service for a promotional price of $19. Guess what happens when the introductory deal is used up? You don’t need an MBA to solve this riddle. The customer never books again — and that’s the problem that plagued Homejoy, the cleaning services marketplace startup that was, for a while, a Silicon Valley darling before it said Friday it was shutting down. Homejoy cofounder and CEO Adora Cheung told Re/code that the “deciding factor” was the four lawsuits it faced from cleaners who claimed they were misclassified as independent contractors. That’s likely true — the liabilities and legal costs associated with the suits were no joke. But there’s more to Homejoy’s demise: its customer acquisition model simply didn’t pencil out, former employees and industry sources said. Former employees tell FORBES that Cheung and the startup pushed relentlessly for high growth numbers instead of fixing its poor retention rates, …
My Take: This is my favorite article this week because not only is it well written and researched, but also because it gives real insight into the big problem I see for TNCs – retention issues. With Uber and Lyft the concern isn’t client / passenger retention, but rather driver retention. In Harry’s intro to Scott’s article last week on “Staying Positive” he cited a very alarming statistic for Uber – within a year almost half of all drivers have packed it in and gone inactive. So far it hasn’t hurt them because the pool of potential drivers is so large, but how long can this last, especially with lawsuits piling up against the company by drivers.
Uber Makes Its Pain New Yorkers’ Problem
Sum and Substance: History reveals the perils of both too little and too much regulation. In the four short years that Uber has operated in New York City, it has sent about 12,000 new for-hire cars onto city streets. Growth like that cannot continue without examination. But of course growth like that might never have occurred if the city’s yellow-taxi system could respond to fluctuations of supply and demand. Instead, arcane aspects of state and local law and, crucially, the power wielded by wealthy and politically generous fleet owners — who don’t want to see the creation of more medallions lest the value of theirs decline — make that virtually impossible.
My Take: Good thoughtful analysis of the “Ubering” of NYC in the aftermath of last week’s regulatory dustup. The New York issue is much more complicated than most media accounts would suggest. Has Uber aggravated traffic congestion in the Big Apple or relieved it? What is the optimal number of Ubers for the city?
While last week’s “deal” with the Mayor was hailed by the media as a victory for Uber, the small print requires Uber to turn over data on their operations that has been hard to come by – especially data on accidents by Uber drivers. One must wonder why Uber has been so reluctant to provide data where others … ie Lyft and Sidecar have been forthcoming. Far from being over, the New York City transit, traffic battle has just begun.
Muffled in the Hamptons, Uber Makes Some Noise
Sum and Substance: MONTAUK, N.Y. — It was just past 1 on a Saturday night, and the scene outside the Memory Motel had an air of frenzied desperation. Hedge fund types and N.Y.U. students stumbled out of bars in their white jeans and Tod’s loafers as barely legal women in crop tops, jean shorts and Gisele sandals flagged down taxi drivers. One by one, drivers rolled down their windows, asking potential customers how far they were going, then naming their prices, … “We so need Uber,” Ms. Elrod said. … Uber suspended use of the app in East Hampton in June and celebrities like Andy Cohen took to Twitter on its behalf, saying: “I am trying to be a responsible citizen. I don’t drink & drive. Plz don’t ban my designated driver in EHampton.” The East Hampton Star published an editorial calling for an accommodation for Uber. But there was a vocal group of dissenters as well.
My Take: Having grown up on Long Island, I know this scene well. It’s becoming a familiar story with a catchy refrain … Please bring “Everyones Private Driver” back. The bigger picture here, however, is how a sense of entitlement has become the norm in upscale neighborhoods. Uber has just institutionalized the sense of entitlement, and when Uber leaves many of the rich and famous don’t have a clue what to do.
What do you guys think about the week’s top stories?
-John @ RSG
