9 Comments

Summary:

Enterprise has bought up Zimride, the ride-sharing service from the makers of Lyft. The deal shows how ride-sharing just hasn’t caught on in the U.S. like it has in Europe yet.

Lyft Zimride car-sharing real-time app

For around five out of its six years of life, startup Zimride has been focused on building communities in the U.S. around ride sharing, or allowing people to arrange shared car rides together. Despite a solid team, strong backers and a lot of hard work, the company amassed just 350,000 users and sold its ride sharing service to rental giant Enterprise this week.

In contrast, the group that created Zimride, also launched an on-demand peer-to-peer car service called Lyft a little over a year ago, and that business has exploded in growth in certain cities in the U.S. The Lyft team has said its system has been generating 30,000 rides per week, and the group closed on $60 million recently from venture capital heavyweights Andreessen Horowitz to expand that growth even more. At the time of the sale of Zimride, 90 percent of Lyft’s 80-person team were working on Lyft, according to AllThingsD.

Zipcar, Zimride Team Up for Shared ZiptripsSo why did one service struggle to grow — despite time, effort and funds — while the other has sprouted like a weed in near record time? I think the answer can be found in the transportation infrastructure, and behavior, in the U.S.

In Europe, ride sharing networks have actually become quite popular. Carpooling.com says it has 4.7 million users in Europe. Blablacar says it expects to transport 10 million people in Europe by the end of 2013, and says soon its European users will be transporting about 600,000 passengers per month across the continent. For comparison’s sake, the Eurostar moves 900,000 passengers per month.

Part of the reason for this lies in the expensive nature of owning and driving a car in Europe. Europe’s transportation system can be generalized by:

  • Expensive to own a car.
  • Expensive to buy gas, and drive on toll roads or in congestion charge areas.
  • Cities and countries that are relatively closer together.
  • High volume cities where parking in cities is difficult and driving in cities is difficult due to traffic.
  • Public transportation networks that act as hubs of transportation for communities.

U.S.’s transportation system can be generalized by:

  • Not that expensive to own a car.
  • Many cities built around car commuters.
  • Not that expensive to buy gas and drive cars.
  • Depending on the city, parking is more accessible.

Obviously these are generalizations, as places like New York City, and San Francisco have decent public transportation, a shrinking amount of parking spaces and growing traffic.

Blablacar’s founder Frédéric Mazzella told me that recently Blablacar launched its service in Germany and has been seeing record growth in the country. In some German cities citizens had already been organically managing their own casual carpooling around train transportation hubs, so Blablacar only had to come in and make it an official service. Mazzella also told me that Blablacar isn’t necessarily interested in moving into the U.S., despite its success in Europe, because the U.S. market is still uncertain.

  1. Odile Beniflah Saturday, July 13, 2013

    I disagree. I think Lyft’s sale of Zimride shows the explosive growth of ridesharing, both in Europe and in the U.S., and the need for Lyft to focus on its widely successful, yet challenging local transportation app.

    Zimride has been a ridesharing pioneer in the U.S. but maybe the initial trips SFO-LA and SFO-Tahoe were not the best rides to start with. As you mention, we know in Europe that ridesharing works best in high volume cities that are close to each other, with good public transportation, and where it’s expensive to own a car. The North East might be a better bet…

    Share
    1. It is significant though, that Lyft is selling its actual ride-sharing operation, while continuing to operate its taxi service which it also calls “ridesharing”, though the terms seems just to be used for legal purposes, to avoid regulation.

      What I see here is the effect of the term “ridesharing” being taken over by for-profit services, with a resulting dilution and loss of clarity in meaning. The folks at Avego, a more legitimate ride-sharing company operating in the US, have been complaining about this for some time.

      If ridesharing fails to take off in the US, one of the reasons may well be this confusing mis-use of the word, and the resulting associations it is gaining with the anti-regulatory movement, and with a corporate culture of shifting responsibility onto workers and consumers. For which Lyft and companies like it are squarely to blame.

      Share
  2. we do like our alone time, don’t we?!

    Share
  3. Lyft has not innovated in any sense except for the fact that they have sold the career/job of cab driving to the millennial generation that thinks of cab drivers as the immigrant with a turban who is just your servant/chauffeur and not a hard working guy, risking his life daily for meager pay to feed his family, put his kids through school and live the american dream; all while being treated like shit by nearly everyone he encounters throughout the day.

    Lyft is not ridesharing in any sense of the word. The term ridesharing refers to giving someone a ride thats going your way and if they want to help with the bridge toll or kick in a couple bucks for gas they will. According to EVERY SINGLE JURISDICTION IN THE US, lyft, sidecar and any other “ridesharing” service is just a taxi service without proper licenses, insurance, vehicle safety inspections and regulation to insure that there is fair, safe and equal access to everyone in the city, not just 20 somethings with smartphones and a credit card. Do you think the 80 year old woman living on social security with subsidized transit coupons waiting at the dialysis clinic has an Iphone and would feel safe getting in a strangers car? I think not. In fact ridesharing is never about picking up strangers unless its carpooling, which happens when you are picking up a stranger with a common work related destination.

    The reason there is regulation in transportation is to prevent congestion, provide for public safety on the roads and give recourse to someone if they are harmed in the course of travel. Lyft and their BS secret “insurance policy” is a complete lie. When you sign up as a user/driver you are waiving your rights to financial recourse if something happens to you and waiving your constitutional right to a jury trial should you even manage to get them into court. Your typical vehicle accident that results in a permanent handicap will end up with a settlement in the tens of millions. Do the self professed “broke” 20 year olds Lyft recruits have the insurance to cover this? NOPE. But a licensed legal taxi does, this is why they are licensed and legal in the first place. Without protections for passengers, this is a problem, and we have barely touched on the fact that lyft does not provide workers comp for the drivers (who incidentally have also signed away their rights to sue lyft should something happen to them while working), or even look out for their drivers from whom they are making their money. Cab companies customers are the drivers, the drivers customers are the passengers (strangers), who can sometimes harm the drivers whom the cab companies protect with partitions, workers comp and video cameras to catch and prosecute the strangers that cause harm to the drivers.

    Moreover, Lyft’s claims that drivers only use the app as drivers sporadically is a complete lie. Its been proven by many parties that Lyft actively encourages drivers to work long hours and focus on areas and hours of traditional high taxi demand. This is contrary to the definition of ridesharing and, by many observations, actually increasing congestion. There are many reports of lyft drivers having suspended licenses, no insurance, driving intoxicated and selling drugs while working for lyft. Again this is not ridesharing.

    Stop Lyft before someone gets hurt physically, financially or otherwise.

    To recap:
    NOT ridesharing
    NOT legal
    DANGEROUS for driver
    DANGEROUS for passenger
    DANGEROUS for others on the streets
    NOT GREEN
    DOES NOT reduce congestion
    NO LEGAL OR FINANCIAL RECOURSE FOR ANYONE USING THE SERVICE

    Sincerely,
    an actual expert on these matters

    references below:

    S.F. Transp. Code 1106
    $5000 fine for driving a taxi without a permit.

    Cal. Ins. Code § 11580.24
    Commercial insurance

    Cal. Pub. Util. Code § 460.3 (ADA accesible)

    Cal. Pub. Util. Code § 5353 (RIDESHARING)
    (h) Transportation of persons between home and work locations or of persons having a common work-related trip purpose in a vehicle having a seating capacity of 15 passengers or less, including the driver, which are used for the purpose of ridesharing, as defined in Section 522 of the Vehicle Code, when the ridesharing is incidental to another purpose of the driver.

    Califrornia Vehicle Code
    §522. “Ridesharing” means two or more persons traveling by any mode, including, but not limited to, carpooling, vanpooling, buspooling, taxipooling, jitney, and public transit.

    SFTMA Opening Comments to CPUC
    http://www.taxi-library.org/cpuc-2013/sfmta.pdf

    Christopher Dolan ESQ 1 of 3 – Passenger Dangers
    http://www.sfexaminer.com/sanfrancisco/know-the-risks-of-rideshare-services/Content?oid=2482848

    Christopher Dolan ESQ 2 of 3 – Driver Dangers
    http://www.sfexaminer.com/sanfrancisco/ridesharing-also-bad-for-drivers/Content?oid=2507217

    The Truth about Lyft
    http://www.buzzfeed.com/justinesharrock/life-behind-the-wheel-in-the-new-rideshare-economy

    THE WORST LAW LYFT IS BREAKING:
    California Business & Professions Code
    §17200. As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.

    Share
    1. Odile Beniflah Sunday, July 14, 2013

      I don’t find your comment constructive. I think we need both cab companies and peer-to-peer transportation services.
      Also I agree that a poor, sick woman is unlikely to have an iPhone, so let’s all work in giving everyone access to affordable, safe transportation. On this matter, I encourage you to read the article from Markus Barnikel, CEO of http://www.carpooling.com in Europe on the future of transportation: “Collaborative Consumption is still an elite movement. We need to break that”. See http://ouishare.net/2013/02/markus-barnikel-carpooling-mobility-collaborative-consumption/

      Share
      1. This illustrates my point, that the term “ridesharing” is being used differently in the US than in Europe. Barnikel is talking about carpooling, whereas Mr. Johnson is talking about the deregulated taxi model pushed by Lyft and similar companies. Those are two completely different things, with different consequences for urban transportation.

        Share
        1. What’s the difference?

          Share
      2. In the article you mention above the author gives examples in Europe of real ridesharing aka carpooling and none of the companies mentioned encourage the participants to make a living doing carpooling or operate as de-facto taxis in the way that Lyft and Sidecar (especially Lyft) does.

        Real ridesharing is not giving the drunk stranger a ride home from the bar at the end of the night or taking 20 year olds out to the club for the equivalent of a taxi fare when the driver was not already going to make that trip.

        For example, you are going across town and your neighbor needs to go to a destination either along the way or near where you are going. SO you offer them a ride and they thank you and possibly kick in a couple bucks for gas. That is ridesharing.

        P2P transportation as you call it has existed since people were using horses to get around and taxis have existed since there was any form of transportation other than walking. Although there is vague evidence of for hire transportation being regulated in Constantinople, the first real record of taxis being regulated was in 1635 with the Hackney Carriage Act in London. Taxis (on-demand transportation for compensation over short or long distances) are regulated to provide minimum standards of service and vehicles. Additionally when you leave it up to self regulation you get unchecked numbers of vehicles clogging areas that the taxis keep clear of congestion, and everyone trying to work only the busy times. Lyft drivers I have spoken to often say “I only do it for a few hours at night on the weekends…” When you have 1000 drivers doing exactly this you completely break a proven system on top of making it so those who follow the regulations cannot feed their families or keep a roof over their heads. Taxi drivers make the majority of their income on the nights and weekends, so when you take this away or diminish it you are reducing their pay to less than minimum wage. Would you work for $5.00 an hour for 10-12 physically grueling hours, risking your life and getting treated like you are less than human by the majority of the people you deal with? I think not.

        I agree that parts of the transportation system are broken and need the gaps filled, but flooding a city with an unregulated amount of on-demand vehicles for hire that solicit the same exact business that taxis do, completely defeats the purpose of the 378 years of regulation.

        http://sfcda.org/CPUC/Seattle_DeReg.pdf

        Deregulation is a race to the bottom and every time it is tried it always results in re-regulation. An iphone app and a pink mustache will not change that.

        Until Lyft, Sidecar and any other “ridesharing” service make it so a driver participant cannot make a living and are giving rides to people along the route of travel they were already headed, they will never be able to coexist with taxis. Period.

        Zimmer sold off the real ridesharing portion of his company because its not profitable, and is focusing on his illicit taxi business where the drivers carry all the risk and liability all so he can take 20% to the bank. John Zimmer, Sunil Paul and Travis Kalanik are all criminals and are far more exploitative than the taxi companies and drivers they demonize.

        Share
  4. A good cab services company should offer you not just punctuality and reliability, but also ease of booking. Cab services also endow you the added benefit of calling them up from virtually anywhere throughout the area. We provide cab rental service in Chandigarh at very affordable price

    Share

Comments have been disabled for this post