Is A Women-Only Ridesharing Company A Bad Idea?

Harry here.  I get lots of pitches from ‘rideshare companies’ every week, but more often than not they’re more of an idea than anything.  There are a few like Fasten in Boston and Juno in NYC that have some real backing and funding behind them, but it takes a lot of work to go from a landing page to an actual company.

Today, RSG contributor John Ince takes a look at a rideshare idea that isn’t new, but has gotten a lot of buzz lately.  There’s definite a market for a women-only ridesharing company, but is it legal and will it work?

Today John Ince covers a women's rideshare start up, Uber vs. investors and more.

Women-only ride-sharing is proof bad ideas are equal-opportunity providers

Sum and Substance: Almost every day brings word of a new ride-sharing startup somewhere, all of them in one way or another trying to outdo the wildly successful model established by Uber. Now comes Chariot for Women, a startup that intends to hire only female drivers and offer rides only to women and children, all with an aim of ensuring riders that safety is its top goal. It’s a laudable goal, but one that’s just flat-out wrong — no matter how popular it already seems.

In fact, the startup has gotten tons of publicity before it’s even been launched, and so many women have offered to drive for it, that Chariot for Women is now planning to launch nationwide, instead of just the Boston area as originally planned, its founder said in an interview late Monday. 

Michael Pelletz — who is the Ben-Hur (so to speak) in this chariot — decided to create an all-women’s ride-sharing service after his own bad experience as an Uber driver, as he explained in an interview with Tripping and on the start-up’s Web site. Pelletz, who had lost his regular job, joined the gig economy in January, putting in 17-hour days ferrying passengers for Uber. One night, after about a month’s driving and more than 850 rides, he picked up a young male passenger who was so drunk or high on drugs that he seemed threatening. Pelletz said he ran from the car in terror and flagged down two Massachusetts state troopers.

When Pelletz returned to his car, he was shaken. He asked himself: what would have happened if that had been my wife, or another woman driving? (Answer: she too could have summoned a police officer?) And the idea for a women-for-women ride-sharing service was born. Pelletz said his fear was real, and for a woman, he said he could imagine how much worse it would be.

The Pelletzes sound like good people. Pelletz’ wife, Kelly, is the firm’s president. She’s a former nurse and health-care professional who, the website says, happened to be in Haiti on a medical mission when the 2010 earthquake devastated the island. As if to emphasize the firm’s good intentions, the site says it will donate part of every fare to charity. “Driving women toward empowerment and safety,” is its slogan.

Their idea for an all-women’s service is thoroughly understandable, especially in light of some of the horror stories involving Uber and other ride-sharing services. Just this week, Los Angeles police announced the arrest of a man who posed as an Uber driver to kidnap and sexually assault a female passenger. But their women-only service is also a thoroughly bad idea, and probably an illegal one, too. Chase C. Liu, the firm’s general counsel, asserted in a lengthy interview and email that Chariot for Women rests on solid legal ground — although he also acknowledged the likelihood of a court challenge in the future.

My Take: The headline suggests a bias in this article right out of the gate.  I don’t know enough to offer an informed opinion on whether or not this is legal.  But my gut is telling me that there is definitely a market for a rideshare service that caters only to women. How many of you male drivers have had a woman passenger who just seems really uncomfortable in the company of a male driver?  How many female drivers think that woman would be more likely to use a service where all drivers were woman? What are your thoughts?

Uber received over 400 data requests from US law enforcement in just six months

Sum and Substance: Uber processed 415 data requests on its riders and drivers from US law enforcement agencies in the last six months of 2015, according to the ride-hail company’s first-ever transparency report released Tuesday.

Most, if not all, of those requests pertained to criminal investigations, such as cases of fraud, theft, or assault. Uber received 309 requests for rider information and 205 for drivers. The company says it “fully complied” with almost 32 percent of those requests, “partially complied” with over 52 percent, and either came up with no information or the request was withdrawn by law enforcement with 15 percent. Uber was subpoenaed for its data 267 times

Uber’s first transparency report — which also details its interactions with other government agencies like airports, taxi commissions, and public utility regulators — is a perfect illustration of the ride-hail company’s pugnacious reputation. No appeal is met without some pushback. Uber lists the number of requests it receives, its compliance rate, and how many drivers and riders are affected by each data request. In some cases, Uber was able to aggregate the data and scrub it of any personalized information, and therefore lists the number of affected riders and drivers as zero. Other times, Uber was able to successfully narrow down the amount of data it is being forced to hand over. But most of the time, it is powerless to resist the long arm of the law.

How was Uber receiving these requests from law enforcement? Uber was subpoenaed for its data 267 times between July and December 2015, 138 times for driver data and 312 times for rider data. In over 82 percent of those cases, some data was produced. It also received 90 search warrants, 30 emergency requests, and 28 court orders. Some data was handed over in at least 80 percent in each of those categories. Also, the majority of these inquiries came from state law enforcement agencies: 368 state requests versus just 47 federal requests. This is a reflection of the nature of Uber’s business: a for-hire vehicle service that operates primarily in cities and rarely rises to the level of federal inquiry.

My Take:  So we’re talking about a subpoena from U. S. law enforcement agencies of almost one a day, roughly divided between drivers and passengers.  Now think about this: what percentage of these complaints involve some kind of audio or video recording? I estimate that percentage is very low … probably less than 25%.   If that’s right, then the vast majority of these criminal investigations are based on a “he said, she said” dynamic.  So if you’ve got a really picky passenger, and they go to law enforcement officials and file a report, you can find yourself under criminal investigation, strictly on the  basis of  what someone accused you of.  Add this to the list of risks you take when you become an Uber driver.

Uber is a nightmare: They’re selling a big lie — and the New York Times keeps buying it

Sum and Substance: Uber has been slowly rolling out its latest “trust me, I’m saving the world” product, this one a service that allows its Uber-taxis to pick up multiple passengers in serial fashion. Much like a commercial airport shuttle, strangers share part of the same ride and pay a reduced fare for just their part of the ride. It’s called UberPool, as in carpool, and CEO Travis Kalanick touted its alleged environmental and labor positives in a recent interview with the New York Times, saying that “reducing traffic was part of Uber’s mission.”

If true, this is a welcome change from the CEO whose previously stated mission was to flood the streets with Uber cars to win his war for market share with Big Taxi and ridesharing competitor Lyft.

Before going into the considerable labor, environmental, consumer and public transit downsides to this latest blitz of Uber hype, I can’t help but say that it has been puzzling to see the New York Times consistently offer up its pages to Uber as a genteel and uncritical forum for promoting its private interest. Much of the latest article from its tech columnist Farhad Manjoo reads like a press release from Uber, without a single comment from a critic or transportation expert on the impact of UberPool. To be fair, Manjoo has written some excellent articles about technology – his series on the impact of robots and automation for Slate a few years ago was first-rate – but that’s what makes his “Uber blind spot” all the more baffling.

No question, taxi service in most U.S. cities has been sub-par for many years, and if Uber and Lyft have demonstrated nothing else, it’s that there were not enough taxis on the road to service all the customers (in Berlin, where I am currently living for a few months, taxi service has always been pretty good and Uber has had a hard time gaining traction). Properly regulated, there could be room for app-driven ridesharing in the overall transportation matrix. Despite its considerable downsides, Uber has become popular in the U.S. because it’s filling that “taxi gap,” and that makes it harder for many well-meaning people to figure out what to make of a service like UberPool. So let’s break it down, sector by sector:

 My Take: Steven Hill, the author of this article and of the new book, Raw Deal, is one of the most articulate critics of the Uber / sharing economy model.  The headline in this article gives a good attention-grabbing hook to the article, but it misses the real point.  Hill initially takes the NY Times to task for acting as a PR mouthpiece for Uber, but his real point is that Uberpool is stealing money from driver’s pockets.  He goes through the analysis and demonstrates how Uberpool enables the company to take a higher commission per fare, while making the driver do more work.  I reduced my diet of UberPool rides long ago and glad I did.

Gig economy leaves workers unprotected

Sum and Substance: Smartphones, apps and flexibility are cool; creating a larger group of totally unprotected workers is not. California has always led the nation in innovation. Once again, it’s time we do that — with innovative updates to our labor laws so that workers can keep up with the rest of our economy.

I’ve introduced Assembly Bill 1727 — known as “The California 1099 Self-Organizing Act” — to accomplish exactly that. This bill would simply allow independent contractors who perform their work through any hosting platform the basic rights to come together and collectively bargain. For the first time in history, these independent contractors could organize themselves into small or large groups and negotiate with their employer over working conditions, wages, health care and even retirement. The companies would simply have to bargain in good faith and couldn’t retaliate against workers who chose to organize. 

We’ve heard loud and clear from these workers and their customers that one of the best things about the structure of the gig economy is the uncommon flexibility it provides. That can be a big help to workers who have any number of other complex demands on their schedules and fewer supports to help them succeed. It’s also a big part of why AB 1727 doesn’t mandate benefits or institute any new regulation on hosting platforms. Instead, it’s truly a free-market approach to the new economy. 

By eliminating outdated barriers to workers’ rights, we can give these individual workers — the ones on the front lines who know better than any of us what they need and want — the opportunity to determine what they want to do next. There are those who question whether California can take this bold step, not just for tech workers, but all independent contractors who are used by companies to directly serve their customers. But after review of existing law, it is clear the state of California can.

My Take:  Living in California, I take a measure of pride in seeing how many of the country’s innovations have been spawned here.  It’s an innovative culture and here the author of The California Self Organizing Act is laying out the case for legislation that will help protect gig workers from the downsides of innovation.  Many of the arguments in this article seem old hat by now, but the fact that legislation is being introduced in the largest state in the union is significant.

Uber may be the ridesharing goliath in the US, but internationally it’s become a wounded, whining David

Sum and Substance: Yesterday, the coalition of billionaires and entrepreneurs wanting to destroy Uber launched an already promised service: the ability for Lyft to fulfill rides booked via Didi Kuaidi’s app in the United States. 

It’s the first step in an ambitious plan where Grab, Ola, Didi, and Lyft– the four major Uber spoilers in the world– will work together to provide a global ride sharing solution. It’s anyone’s guess how well this will all work in practice. Let’s not pretend four distinct companies with different user interfaces, languages, and back ends will somehow just seamlessly work together. It’s hard enough for Uber to operate the same in the United States, as it does in China where driver fraud is rampant. And that was before Uber announced plans to expand to motor-bikes, a specialty of Grab in Southeast Asian countries where traditional ridesharing only means you are stuck in endless traffic in someone else’s car.

As usual, Uber’s ambition and the press release belies the complexity it’ll face actually pulling this off. Anyone who has spent time in these markets knows, most motorbike drivers in cities like Jakarta speak no English, deal only in cash, and can’t be recruited via online apps. Grab has substantial local on the ground operations to make this work– and their teams are from these markets. That’s the kind of investment that Uber usually eschews, preferring instead to spend billions per year on subsidies. For those who have spent decades watching Valley companies trying– and largely failing– to compete in China, Lyft’s approach of ceding the market to the undisputed giant in exchange for some additional investment dollars and revenue share dollars may wind up being the smarter option– the same way Yahoo’s Jerry Yang “won” in China by investing in a fledgling Alibaba. It will certainly be the more cost effective strategy. Without an IPO, China may well bleed Uber dry, and Uber has raised several times the capital of Lyft.

 My Take:  Sarah Lacey of Pando Daily has emerged as perhaps the best informed and relentless critic of Uber.  Here she synthesizes a mountain of data to come up with a persuasive thesis on why Uber is in big trouble – competitively.  She points out that Uber tried to initiate an IPO just for their China operation, but it’s fallen flat.  She outlines other reasons why an IPO in the United States isn’t in the cards for the foreseeable future.  Put it all together and Uber is facing a mountain of trouble, and Lyft is looking increasingly like a very cagey competitor.