That’s the conclusion from a study conducted by Taxi Research Partners and the Tennessee Transportation & Logistics Foundation for the City of Seattle, which is trying to figure out how to regulate new ride-sharing startups like UberX, Sidecar and Lyft.
The study noted that the market for limousines, for-hire vehicles and ride-sharing services — basically all alternatives to taxis — is “growing rapidly and vehicles in service are growing to meet it.”
The study, which surveyed more than 1,500 people across varying demographics, also found that service is an important factor for customers. There were quite a bit of negative comments for taxi customer service and response time, although the study concluded that in terms of setting regulations, “response times are not a sufficient metric for judging the need for additional vehicles as customers appear to seek out additional services when response times become unsatisfactory.”
With services like Lyft and SideCar, passengers use their smartphones to try to locate nearby drivers who have a similar destination. Car owners actually sign up to provide transportation to neighbors, co-workers, friends and others. Drivers are vetted before being accepted into the network.
Taxi companies in Seattle and other cities are concerned that the three ride-sharing companies 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.
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, the ride-sharing startups are conducting business illegally but the city has yet to intervene.
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 UberX charges similar rates to taxis but does not require tips. These models typically save riders money over typical taxi services.
John Zimmer, co-founder of Lyft, told us last week at a Lyft community event in Seattle that he thinks ride-sharing companies, taxis and for-hire vehicles can co-exist. In fact, he said taxis can actually make more money in that environment.
“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.”
Perhaps Seattle 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.
Here’s the study in full: