Lyft drivers and riders shared their stories at community rally in Seattle's Capitol Hill neighborhood Wednesday evening.
Lyft drivers and riders shared their stories at community rally in Seattle’s Capitol Hill neighborhood Wednesday evening.

One by one, riders and passengers of fast-growing Lyft came up to the microphone Thursday night in Seattle’s Capitol Hill neighborhood, sharing their stories about how the ride-sharing startup has had a positive impact on their lives.

Some spoke about the friends they had made through Lyft. One driver liked how it provided a safe and convenient option for his kids to get home after a night out. Many touched on the community aspect of it all.

“We’re trying to build the startup culture here in Seattle, and Lyft totally brings that energy of a more vibrant entrepreneurial feel,” said Amber Jin, a Lyft rider. “It’s what we need more of here.”

But while the couple hundred people that gathered Thursday for Lyft’s second-ever “Community Meeting” shared similar feelings, there are others in the city that aren’t so happy about this whole ride-sharing craze.

Taxi companies in Seattle and other cities are concerned that the three ride-sharing companies — Lyft, Sidecar and Uber — are cutting into their customer base with services that say require far less regulation and oversight. They’re letting the city hear about it — quite literally.

Lyft co-founder John Zimmer.
Lyft co-founder John Zimmer.

Lyft co-founder John Zimmer, who flew up from San Francisco for the event, understands this point of view, but he has a unique take on it.

“This is not a zero-sum game where having this new service is bad for the old service,” he told GeekWire. “Having all of these services makes it easier for you to not need a car. Then, if you don’t have a car, you will use all of these services even more.”

The problem the taxi companies have is that Lyft and the others are not regulated by the city the same way taxis are. Technically, since the ride-sharing companies operate without any licensing or inspection by the city, some argue that the ride-sharing startups are conducting business illegally.

On top of that, they are certainly creating serious competition. Lyft and Sidecar allow riders to pay via “donation” with credit and debit cards linked to their smartphones, while Uber charges similar rates to taxis but does not require tips. These models typically save riders money over typical taxi services.

But as all three startups continue to do scoot around town, the City of Seattle and King County have yet to take action. The Seattle City Council will meet next Tuesday to review data relating to taxi and ride-sharing demand from consumers.

A Lyft vehicle. (Photo via the Lyft blog)
A Lyft vehicle. (Photo via the Lyft blog)

Perhaps the city will follow what the California Public Utilities Commission recently proposed: A new category called “Transportation Network Company” that requires entities like Lyft and Uber to be licensed, require criminal background checks for drivers, establish driver training programs and use a zero-tolerance policy on drugs and alcohol.

Lyft, which just expanded into three new cities and passed the one million rider mark, is happy with the proposal, which mimics several of the company’s polices that are already implemented.

“We have been doing those things from the beginning because we felt like it was the right thing to do,” Zimmer said of the regulations. “If there’s another party that wants to make sure we are doing what we say we’re doing, I think that makes sense.”

Zimmer is big on both making transportation more efficient for cities (eliminating traffic, saving drivers money) and creating a sense of community with riders and passengers.

“Making systems to connect people unlocks what people really want, which is a sense of belonging,” he said.

The 29-year-old said he wants to collaborate with both the for-hire drivers, as well as his direct competitors in Sidecar and Uber. In the end, he knows the community wants more affordable and more sustainable transportation and that everyone can contribute to that goal.

“Change is coming,” said Zimmer, who co-founded the popular Zimride service in 2007. “One day, we will have self-driving cars. All of us need to adapt and I think as long as we’re all being respectful of each other, competition can be a good thing and new industries can be a good thing.”

Comments

  • margaret Bartley

    Any service that requires a driver to drive to pick up a customer should NOT be considered a “green” enterprise, whether it be a cab or a network service. It ends up with almost double the amount of cars/exhaust/carbon emissions as a single passenger car trip.

    If you are really concerned with cutting emissions and affecting global climate change, we should have rent-a-cars sprinkled around all the neighborhoods, with parking available everywhere, including malls, ferry terminals and the airport.

    • http://ohheyworld.com/ Drew Meyers

      Isn’t that Car2Go?

  • ClaimsAdjuster

    Lyft, UberX and Sidecar are running gypsy cab operations. These companies are dispatching private cars to pick up passengers. Most of these gypsies do not have insurance required for the transport of passengers. Furthermore the drivers, who are supposedly independent contractors, do not have business licenses or have industrial insurance coverage. Thus the drivers have no coveraged if they are injutred on the job.

    This is not a case of stodgy regulation versus entreprenuerial innovation. These well financed gypsy operations are cutting corners.

    • Joe

      I’m pretty sure only gypsies use that word as much as you do

    • Astral Writer

      I believe these ride-sharing companies provide insurance to offset any amounts not covered by the driver’s insurance. When you transport friends, you take a similar risk.

      An example of an independent contractor is a freelance resume writer. In my opinion, I doubt they need to be certified to write resumes and cover letters.

      Independent contractors take a risk to be work on their own. This is usually the case in these working arrangements.

      • ClaimsAdjuster

        Sorry, there is no such piggyback insurance. Insurance companies would be foolish to agree to such a plan.

        Independent contractors of any sort are required to have a business license in the state in which they operate. In Seattle, the city also requires a license. They are supposed to file taxes.

        Cab driving is one of the most dangerous occupations in the US because of accidents and crime. The state of Washington requires that cabdrivers obtain Labor and Industries insurance to cover them for on the job injuries.

        These gypsy cabdrivers do not have business licenses, coverage for their on the job injuries, or the proper insurance to cover their passengers.

        • New driver

          who said it was an insurance company who is paying for the compensation?

          • ClaimsAdjuster

            Lyft, Sidecar and Uberx state that they have an umbrella insurance policy that kicks in when the driver’s private insurance denies a liability claim. But they also argue that their magic policy is proprietary so they don’t want to show it to the city. So who knows? Maybe their insurance policy is Jeff Bezos’ pocket.

  • http://www.you-read-it-here-first.com/ John Bailo

    The issue that worries me about ride sharing is that you might end up with the boom and bust cycle typical of predator-prey relationships.

    Think of the drivers, as predators, looking for fares. The prey are passengers looking for rides. When these ride-sharing services start up a lot of people will join to give rides, because it’s easy money…people will call the services to get bargains.

    Then interest tapers off. Drivers are not getting as many calls because the market for drivers gets saturated, so they do other things. Then passengers get fed up and go back to calling reliable taxi services.

    This is why taxi services are regulated…so they don’t drive themselves to extinction.

    • laughtiger

      Unfortunately, the supporters of this free-market ideology don’t have any interest in learning from history, as it doesn’t fit their beloved assumptions.

  • ClaimsAdjuster

    Lyft,UberX, SideCar talk out of both sides of their mouths:

    “LYFT OFFERS INFORMATION AND A METHOD TO CONNECT DRIVERS AND RIDERS WITH EACH OTHER, BUT DOES NOT AND DOES NOT INTEND TO PROVIDE TRANSPORTATION SERVICES OR ACT IN ANY MANNER AS A TRANSPORTATION CARRIER, AND HAS NO RESPONSIBILITY OR LIABILITY FOR ANY TRANSPORTATION SERVICES VOLUNTARILY PROVIDED TO ANY RIDER BY ANY DRIVER USING THE LYFT PLATFORM.”

    http://www.lyft.me/terms

    This from a legal blog on the subject:

    “If you are a passenger and a Lyft driver is using a borrowed car, has not maintained the car in good operating condition, “misrepresents” anything about Lyft, breaks any law (vehicle code?) or does anything else Lyft does not like, Lyft can, unilaterally, deny its touted $1,000,000 in insurance.

    Drivers get screwed too. If Lyft denies the driver protection under the $1,000,000 policy they may lose their house, car, or bank account, have their wages garnished, or be forced into bankruptcy. Insurance industry groups have stated that they consider these drivers to be engaged in a business thereby canceling out their private car insurance pursuant to a “business exemption.”

    http://www.cbdlaw.com/Know-Your-Rights/Ridesharing-also-bad-for-drivers.shtml

    If insurance comapnies find out that a policyholder is running a cab business under a non-commercial poicy, they will deny the claim. At that point, the injured party will seek relief from the dispatch service(Lyft, SideCar, UberX)who will fight the liability on the pretext that they are not responsible – as they stated quite clearly in their disclaimer.

    Lyft will lose most of these cases that go to trial. Enough of these small settlements and the insurance company will cancel the policy. The liability policy is to protect Lyft from big lawsuits as in a fatality accident. But paying out every claim under 350,000 adds up to real money. .

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