6 min read

    6 min read

    In this week’s roundup, senior RSG contributor John Ince covers redesigned taxis in LA, problems with Waymo, and advice for passengers.

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    Los Angeles Rethinks Taxis as Uber and Lyft Dominate the Streets [NY Times]

    Sum and Substance:  LOS ANGELES — The cars flow into Los Angeles International Airport in an endless stream, and in this loosely organized chaos, for-hire vehicles self-segregate at a new pickup terminal, called LAX-it. On one side, fast-moving lanes of app-hailed cars jockey to pick up their passengers. On the other, cabs inch along the curb, waiting for a fare.

    “I’ve never taken a taxi,” Heather Brandon, 36, of Arizona, said moments before she was whisked away in an Uber on a recent Sunday morning to catch a Carnival cruise. Taxis are more expensive, and the Uber app is more convenient, she said.

    This year the city is changing the system. Instead of calling an individual company to request a cab, passengers will be assigned rides through a centralized dispatch that connects all the cabs in the city. The taxis can be requested with an app, as well as with a phone call. Passengers will know the cost of their rides before getting into the car.

    Meters will be modernized, and cabs’ garish colors will be optional. Instead, they could simply sport a decal and registration number.  If that sounds more like ride-hailing, that is exactly the idea. …

    My Take:  So how do you redesign the system to make taxis more competitive? This is a good start. It takes the difficult issues and makes them more rational.  Who knows whether it will work, but at least they’re making the effort.

    Waymo Wants More Money from Uber, Drama Continues [Market Realist]

    Sum and Substance:  Alphabet’s (NASDAQ:GOOGL) Waymo has already picked up hundreds of millions of dollars from Uber Technologies (NYSE:UBER) and expects more. Both companies are racing to put self-driving vehicles on the road. They’re also involved in the ride-hailing business.

    In 2017, Waymo sued Uber. Waymo accused the company of stealing trade secrets related to self-driving technology. In 2018, Uber agreed to pay $245 million to Waymo to settle the dispute. However, the payment wasn’t hard cash. The company paid Waymo using its shares. As a result, Waymo took up a 0.34% equity stake in Uber. Notably, Uber went public in May 2019 at a valuation of $82 billion.

    The dispute stemmed from Uber hiring former Waymo employees, which was controversial.

    My Take:  Complicated stuff here. The net is that Waymo isn’t done. In the end, Waymo may end up licensing the technology to Uber, which would be a nice touch, especially when Uber has already paid up through the previous settlement.

    Grubhub sale rumors highlight the state of the struggling food-delivery industry [Vox]

    Sum and Substance:  Grubhub sale rumors highlight the state of the struggling food-delivery industry  Tough competition makes consolidation a really attractive idea.

    Grubhub has seen its market share decline to about 30 percent of US sales in November, down from more than half just two years earlier, according to data from credit card measurement company Second Measure. Meanwhile, venture capital-backed startups like DoorDash have moved into the lead, with 37 percent of US sales. Uber Eats, Postmates, and a handful of smaller competitors are also duking it out in cities and towns across America.

    Food delivery is a low-margin business, which makes money from charging customers delivery and other service fees, and from revenue shares with restaurants. And to sign up some bigger restaurant chains, food delivery services have had to lower their commissions. Those margins are further tightened as food-delivery companies seek to beat out their competition by lowering their fees for customers and offering expensive promotions. These discounts, however, aren’t necessarily locking in customers, but rather encouraging customers to shop around. It’s a similar situation to ride-hailing, where customers are not loyal.

    My Take:  This industry is a mess. The numbers don’t look good, and the configuration of players doesn’t look any better. So let Grubhub sell.Who might want to buy it is the big mystery.

    I’m a driver for Uber and Lyft — here are the 10 biggest mistakes I see passengers make [Business Insider]

    Sum and Substance: Uber and Lyft users frequently make mistakes that cost them both money and time.

    I know this firsthand — I’ve been driving for both companies for almost a year, and I see riders do things that hurt themselves in the long run.

    Some of the biggest mistakes passengers make include failing to price-check both apps before requesting a ride, ordering the wrong type of vehicle, and leaving a mess that requires a big cleaning fee.

    Here are 10 of the biggest mistakes that Uber and Lyft passengers make that cost them.

    Requesting a carpool over a regular ride.

    The carpool features of Uber and Lyft were designed for multiple passengers to share a ride from near point A to point B.  The ironic thing, though, is that it’s actually best for the passenger if you don’t share a ride with anyone else, unless you want to waste a ton of your precious time.

    Not price-checking both Uber and Lyft before requesting a ride.

    If a product were $10 cheaper at one store over another store — the exact same product with the exact same service — would you buy that product from the more expensive store? Probably not.  Uber and Lyft are almost the exact same products. Surprisingly, a lot of passengers do not check prices between the two.

    Experienced users know that the companies run promotions from time to time to compete with each other. …

    A common misunderstanding among passengers is that if the ride is much cheaper, then the driver is getting paid much less. This is not true. Drivers always make at least a base rate, and possibly a little more depending on bonuses. If a normal $20 ride is suddenly $10, the driver’s pay is still the same regardless of what the passenger pays — it’s the company that’s making less money…

    My Take:  This is a long article and most of the items here are self-evident, but if you’ve got nothing better to do… then go ahead. It can’t hurt.

    Uber’s new policies could encourage discrimination, advocates fear  [SF Chronicle]

    Sum and Substance:  Advocates for minorities and low-income people fear that Uber’s recent overhaul of its ride processes could lead to discrimination against people traveling to neighborhoods some drivers perceive as less desirable. Drivers can now decline to take passengers to San Francisco’s Bayview-Hunters Point or East Oakland, for instance — areas already underserved by transportation.

    Uber last week gave California drivers much more autonomy, including the ability to know every ride’s destination in advance and to reject ride requests without penalty. The changes are Uber’s attempt to shield itself from being forced to reclassify drivers as employees under the state’s new gig-work law, AB5, but some outside groups say the overhaul creates conditions for prejudicial treatment. …

    My Take:  This is a tough one. The changes to the app give the driver more autonomy, but they also give them the option of declining rides that they think might be hazardous. Who knows what the answer is here. Having choice sometimes might not be a good thing.

    Readers, what do you think of this week’s roundup?

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    John Ince

    John Ince

    John Ince is a former Fortune reporter and Wall Street banker. He has about 1,000 rides under his belt driving part time for Uber and Lyft.  He’s writing a book about his experiences entitled:  Travels With Vanessa:  A Rideshare Driver Tries To Make Sense of It all - For a sneak peak visit the link above.

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