Reminder: I’ll Be Interviewing Juan Matute Live at 3 at Socal StreetsTube About “Ride Share” and Southern California

Just a reminder, at 3:00 today I’ll be interviewing Juan Matute, UCLA Lewis Center Associate Director about the role that the city plays regulating Transportation Network Companies and how these companies help or hurt mobility overall. The first question will be, why don’t you just call companies such as Uber and Lyft ride share like everyone else?

We’ll broadcast live at SoCal Streetstube. If you have a question for Juan, leave it in the comments section. As always, we’ll publish the broadcast as soon as it is completed.

  • Anonymous

    Give these “Transportation Network Companies” an honest name for Christ’s sake! They are eGypsy Cabs as in electronic gypsy cabs. Just because you have a smart phone app doesn’t mean you are an upstanding citizen. We license cabs to prevent robbery, kidnap, and body lice – and Uber and Lyft should have to deal with these things just like any other private person hiring their car out.

  • Niall Huffman

    Picking up on ubrayj02’s point, what legal/regulatory requirements are drivers for TNCs subject to, and how do those requirements differ from those that apply to conventional taxicabs (in terms of vehicle safety, background checks, insurance, etc.)? What additional requirements do the companies themselves impose on drivers? Have there been problems in other cities due to TNCs supposedly being subject to less strict regulation than taxicabs?

  • Sirinya Matute

    The Samohi student paper ran an op-ed last week concerning the emergence of real-time ridesharing applications. One student stated that he no longer felt safe using UberX because he believed drivers were operating in violation of the city’s cease and desist order and that they had fishy compliance with safety regulations. It was unclear whether the student was referring to the city of LA’s cease and desist order because Santa Monica hasn’t issued one.

    Can you elaborate on how the practices and policies that the primary players in real-time ridesharing (Uber, Lyft and that third company whose name I can’t remember) have implemented in order to assuage passenger/customer concerns regarding safety and reliability? In particular, some might be concerned about liability in case there is an accident and the passenger suffers from medical injuries. Further, the student expressed concerns about his safety, but did not seem informed about the background checks these companies complete prior to hiring drivers.

  • Sirinya Matute

    Another question: How do the cabbie smartphone apps compare to real-time ridesharing services like Lyft and Uber? Have you gotten any feedback concerning the user interfaces, the payment methods, and the amenities the cabbie apps provide? Do you foresee traditional cab companies investing in the information technology infrastructure in order to deliver higher levels of customer service and satisfaction? I believe that Lyft, in particular, has reset expectations amongst a large segment of their riders concerning this.

  • Sirinya Matute

    Do you anticipate that, as some customers begin relying on real-time ridesharing as a form of transportation, they will also begin or increase their patronage of so-called traditional cabs?

  • Sirinya Matute

    John and Logan really envisioned a future where impromptu carpooling was seamless and easy. The online ridematching website they built pioneered the use of APIs from social media sites in order to build some trust amongst prospective carpoolers, but it required considerable pre-arranging to set up a ride. Lyft currently allows me to pre-arrange a ride through my smartphone app. I don’t have to tell them where I am going. In contrast, in DC, the cabs are allowed to hail multiple passengers, assuming they’ll only take a 2nd, 3rd or fourth passenger if their destinations are all along the way. (This does not always work in practice.) Will real-time ridesharing apps ever allow us to get to that center — using the smartphone, to literally share the ride with someone headed in the same direction as you are?

  • Due to my computer crashing, I wasn’t able to access all the questions. Juan is hopping over here to answer them. Sorry all, and talk soon.

  • Juan Matute

    Josef, the state is trying to regulate the safety of these services, especially the insurance requirement (http://delaps1.cpuc.ca.gov/CPUCProceedingLookup/f?p=401:59:638605657211201::NO) The CPUC was not sympathetic to the argument that the services should have to jump through extra hoops just because Taxis have to. Taxi regulations are suboptimal from any perspective – the path-dependent result of decades of layering on new requirements. I personally feel like I have more recourse for a bad ride with a TNC company than with a taxi company.

  • Juan Matute

    I hope so. I don’t know if the blended TNC/Rideshare approach is good for the business model.

  • Juan Matute

    If an experience in a cab is bad, people avoid cabs as a recourse. If an experience in a TNC is bad, people rate the driver low and are never matched with that person again. Taxis will likely have to re-focus on customer service and two-way communications with customers (e.g. twitter complaints) in order to capture the increase in demand for Taxi/TNC services that I would expect in the future.

  • Juan Matute

    I can probably address this at dinner.

  • Juan Matute

    Here’s a summary of the regulations that will apply to TNCs. I’ve heard that TNCs will kick drivers out of the system if they receive poor ratings (under 4.5 of 5) and if they fail to respond to too many ride requests).

    Many state and local governments are considering injunctions or regulation. California & LA have not been unique, but the state has been the first to issue regulations. Look up DC and Uber for the most noteworthy battle between a city and Uber.

  • Sirinya Matute

    Readers,
    Mind you, Juan and I are married. But I pose these questions so they could be addressed on the record.

  • Sirinya Matute

    It’s interesting that you say all of this. In my experience (so sample size = 1), I have begun using cabs again, when I can’t arrange a TNC. I haven’t had a single decent cab experience (sample size 4) since Lyft began operating in LA. The idiocy on my part is that I keep using cabs despite the my dissatisfaction with them.

  • Kenny Easwaran

    Require “trade dress” on vehicles – is this saying that vehicles should be identifiable as operating on behalf of the TNC from the outside? Lyft has the mustache, and Uber cars tend to be black towncars with livery plates, but do Sidecar and UberX comply with that rule? Or am I misunderstanding it?

  • Juan Matute

    I was in the cab on one of those occasions. The driver chided us for taking a cab 14 blocks.

  • Sirinya Matute

    He drove his Prius cab like it was a hot rod. I tweeted at the MetroCabSM company on Twitter about our experience. No one responded.

  • Juan Matute

    yes. UberX cars and Sidecar cars must have trade dress. Uber livery cars are not TNCs. They’re regulated separately and those regulations will be updated now that it’s possible to contract for one without the use of a telephone. Previously, shutting down a telephone line was the primary means of stopping non-conforming charter party carriers. The CPUC has jurisdiction over telecommunications in the state, so shutting of phone lines was easy. The CPUC does not have regulatory capabilities over the internet, app stores, or other parts of the process needed to download an app, enter personal and payment information, and contract for transportation services.

  • Anonymous

    A TNC is a taxi company with an app is the point I am making, and a taxi company that is illegally lowering its costs by shortcuting local laws. If the CPUC is going to make eGypsy Cabs a special class of taxis I think that is grossly unfair. Taxi companies should be able to dodge regulations and become Lyft and Uber drivers (which is what will happen in the end anyway).

    If a Lyft driver doesn’t perform routine maintenance, isn’t carrying enough insurance, and the car gets in a crash, who can a “customer” turn to for medical bills? If professional taxis have to face one set of regulations and gypsy cabs get another – how does this help the public? It only exposes us all to more risk and a shrinking market for people who take transportation for hire seriously enough to call it a job.

  • Juan Matute

    Some anecdotal evidence from San Francisco suggests that taxi drivers are becoming UberX or lyft drivers – and taking home more money than what they get after a medallion owner takes a cut. No research yet, but in a supply-constrained environment it’s the medallion owner rather than the driver who makes the bulk of the money. TNCs are required to have $1M in insurance that supersedes any personal insurance someone has on their vehicle.

    Josef, do you think similarly about AirBNB versus hotels? That hotels should be compensated for the lower perceived/real risk associated with staying a night, and that AirBNB offerings should be made illegal?

  • calwatch

    There is the real time ridesharing app Carma (formerly Avego) https://car.ma/rtr which does just this.

  • Anonymous

    All I am saying is that we have created a playing field that will leave cities & state less money from licensing. more risk to the general public, and less professional full-time employment for people seeking such that isn’t totally dependent on their customers carrying a state-monitored tracking device with attached financial details jut to hail a cab. We just barely instituted the innovative “hail a cab” zones in LA a few years ago. It is illegal to use your hand to hail a cab in most of LA but some iTrackMe handjob can skip the bed rental fees and overhead costs of a hotel or taxi company to go gypsy all the way? Well, why have laws at all, right? Let’s let Lyft take all the money. I am sure they will help us pay for the insurance claims, delousing, and police work required to monitor grey market cabs and hotels. I think these services are an intrusion that is crippling to people trying to follow the rules. You have an app and now your firm can play a turbo version of Monopoly while the rest of us are stuck with the old rule book? That isn’t fair and it isn’t in the best interest of our republic.

  • Sam

    You paint this doomsday scenario, with the worst case issues. What you don’t understand is that these gypsy companies are offering a service that 1 is needed and 2 that people actually like. Also how safe are the taxi’s really, and have there been issues with them in the past and even now have you ever gotten into the cab and thought hey the guy driving the cab isn’t the dud ein the pic or you have negotiated a side deal not to pay the meter fair. Do you think all cabs are on the level and that safety is their premium. If there hadn’t been some many issues with them in the past they probably wouldn’t be regulated as much as they are, so let’s not give them a free pass because they have some additional level of regulation. Also if you haven’t been paying attention theres going to be some more regulation of these companies. But this is innovation driven by the market and it is forcing government regulations to adjust to them. You can chose not to take a lyft or uber or sidecar, its up to you but realize they these companies will continue to grow, and for the users they are far more responsive than any existing cab company.
    Also then how do you feel about “rideshare” apps or exchanges where you simply are sharing cost by renting out seats, this has been done for years and will continue, do you think these people who participate need to have more insurance or more testing, they have the same liability and they will be facilitated through a website, so what then.

  • Juan Matute

    Hank, I don’t think Carma will achieve scale outside of Dublin to match a high proportion of requested trips. It’s a numbers game, and people need to perceive a high probability of match in order to return to the service (and keep increasing the numbers). The TNCs can guarantee a ride, and potentially in the future with dynamic pricing, charge less for incidental trip within the same platform where someone is guaranteed a passenger-serving trip so long as they’re willing to pay the price premium to have someone go out of their way.

  • calwatch

    Carma is very useful in the Bay Area. The TNCs are better at getting that critical mass since they pay people, but there are easily other ways to get that, such as campus/employer based Zimrides, university bulletin boards (online or physical), and church based ride boards. The TNCs open this up to a wider public, but informal ridesharing has always occurred amongst peer groups, churches, and other affinity groups.

  • calwatch

    Sidecar is the other one. The taxi operators are regulated by a government entity, while the TNCs are supposedly self regulating. I had a cabbie overcharge me going from Santa Monica to LA once – I filed a complaint with the City of Santa Monica, uploaded the receipt (he was charging a number higher than the meter, claiming it was prearranged, and I didn’t want to argue at such a late hour, instead paying and filing a complaint after the fact), and the City contacted the taxi operator and they provided a refund to my credit card. Now, in a TNC, arguably this wouldn’t have happened in the first place, but regardless if you fail to address it at the TNC level, who do you go to? The CPUC? Local regulation, especially in a case where regulators are responsive such as Santa Monica, can be helpful.

  • calwatch

    I’d have to review the insurance requirements but this is generally excess liability insurance, above regular car insurance – and car insurance generally does not cover travel for hire. It covers cost sharing arrangements but that applies for something like an Avego/Carma or Craigslist rideshare, where the driver is headed in the same direction anyway, not someone as in Lyft/Sidecar/UberX who is specifically getting into a car to pick someone up and delivering them to that destination, while then picking someone else up or returning back home.

    Renting out seats is different, and the dollar van market is different. Dollar vans have a potential of skimming off important transit revenue, which is why jitneys were banned 80 years ago.

    Although I am a bit more comfortable with Lyft/Sidecar/UberX now that they have a better track record and are somewhat regulated from the PUC, it is still a step down from professional drivers. The people on a rideshare app are doing it as their avocation, which can be beneficial in some ways, since they are friendlier and have other interests, but in other ways, they may not have 50,000+ miles without a collision a year or more as a taxi driver might have.

  • Juan Matute

    Understood that informal ridesharing is far easier when two of the following are fixed: origin, destination, departure time, and when the driver & passenger share social ties.

  • Juan Matute

    Based on a presentation I heard the chief of staff for CPUC President Peevy give, it seems that some of the companies initially saw a driver’s personal policy as the primary safeguard in the case of an incident during a rideshare ride. However, most insurers would refuse coverage under the grounds that the trip was commercial activity. One of the major reasons for the rulemaking and the insurance requirement was to ensure a minimum level of coverage for rides connected on a TNC platform ($1M per incident) that superseded any personal coverage. This exceeds the CPUC’s requirements for limos (charter party carriers, $750K).

    Remember, jitneys were banned when transit service was private and unsubsidized. LA has since experimented with jitney service (early 80s, didn’t go well as they started the program just as they cut already heavily-subsidized transit fares).

    These services (Lyft/Sidecar/UberX) are not yet regulated by the CPUC. They have an interim operating agreement and the CPUC is just now issuing instructions on how they can apply for TNC licensing. Based on comments in the rulemaking proceedings it’s possible that Uber/UberX will not seek licensing, which could lead to some enforcement activities. I think that Lyft will as their business model is most similar to the expected model of a TNC firm.

    It’s an exciting market and I can’t wait to see how it develops.

  • calwatch

    Of course, Lyft’s excess liability coverage in particular may cover the rider but in many insurance policies, by virtue of operation in a for hire business, the insurance policy may not cover the driver (as in liability to a third party due to a collision caused by the Lyft vehicle, collision coverage for the Lyft vehicle itself, or medical bills of the Lyft driver should the medical coverage be purchased, which I usually do not recommend). http://phantomcabdriverphites.blogspot.com/2013/10/the-cpucs-proposed-decision-good-bad.html

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