Why San Francisco turned sour on Uber, Lyft and other ride-hailing apps

Newcomers to San Francisco looking for signs of a futuristic tech metropolis are likely to be disappointed. yes there is one Robot Barista Making coffee at the airport, but other evidence is harder to come by. The city’s apathy towards its own tech sector is evident in the low regard for ride-hailing apps. Not that that’s likely to deter a new service from trying its luck.

Alto hopes to stand out from the competition Uber and Lyft by making their drivers employees – with all the benefits that come with that – and sending them off in a standard car model, a mid-size Buick SUV. That can convince riders and drivers. However, the company should not expect a warm welcome from the city.

Uber and Lyft were both founded in San Francisco. Both don’t feel wanted. San Francisco Airport may have been one of the first in the US to introduce ridesharing, but it is true seems to have regretted the decision. If you’re arriving on a domestic flight and want to take an Uber, you’ll have to look for non-existent signs, shove your suitcase down a concrete pass and down a flight of stairs, and head to a remote parking lot.

This is intentional. The Troubled History of San Francisco with his taxi drivers suits New York. In 2010, shortly after Uber’s launch, the city introduced a new auction for medallions, the licenses that give drivers the right to operate taxis. The price was a simple but stratospheric $250,000. In the past these were available for a small fee, but there was a long waiting list. Medallion owners kept them for decades – sometimes renting them out to other drivers as a form of passive income.

San Francisco’s decision to create a market for lockets made the city big – $63 million, according to the San Francisco Municipal Transportation Agency (SFMTA), the city’s regulator of the taxi industry. Locket sellers also made millions.

But within a few years of the sale, ridesharing had flooded the city, offering cheaper rides via handy apps. Taxi revenue plummeted. The market for used lockets did not exist. Taxi drivers who took out huge loans were left with unpayable debts. Many have defaulted. Motorists want the city to buy back the medallions to the prices paid – the last organized protest was earlier this month. But that’s unlikely. New York City cab drivers are fighting the same battle, fighting huge loans taken out to buy medallions before taxi companies changed the market.

A satisfactory assignment of blame is not possible. In San Francisco, a credit union that backed many of the loans sued the SFMTA for failing to protect the medallion’s value. Last year it lost its case. The SFMTA is not responsible for transport service providers. They are regulated at the state level, not the city level.

San Francisco’s response is to give money to cab drivers who have paid a high price for medallions Priority over other taxis at the airport. This is supposed to help with the enormous financial burden, but it is a small compensation. you are allowed to drive on Market Street, one of San Francisco’s main streets, closed to private vehicles. From 2020, the city will add a 3.25 percent surcharge to ridesharing, but not to taxis.

Passengers who don’t know the backstory won’t stop calling Ubers. Some might think twice after being forced down an uncomfortable path, but not many. The strange thing is that both the taxi drivers and Uber lost out financially. Ride-hailing companies still exist trying to figure out how to make sustainable profits and get users booking rides. Uber has only just started reporting positive net earnings. His latest battle is figuring out how to offset rising oil prices. An oil levy on passengers to cover the price hike will help drivers but could deter drivers.

The disadvantages of ride-hailing companies are now well known. They don’t reduce car use – they increase it. Congestion has increased, making cities noisier, polluted and journeys longer. research of Carnegie Mellon University shows that Ubers and Lyfts produce 20 percent more greenhouse gas emissions than private vehicles because they spend so much time driving around to pick up passengers. Alto could well carve out a niche for itself in the Bay Area. But the future of urban transport is yet to come.

Elaine Moore is FT’s Deputy Lex Editor

Why San Francisco turned sour on Uber, Lyft and other ride-hailing apps Source link Why San Francisco turned sour on Uber, Lyft and other ride-hailing apps

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