New Year’s Eve is a night of parties, revelry and drinks. That makes
it a prime business opportunity for taxicabs and app-based ride
competitors such as Uber and Lyft.
In this increasingly competitive segment of the transportation industry, both startups and stalwarts are launching marketing blitzes leading up to a holiday when demand for rides can exceed the supply of drivers.
Uber and Lyft will charge passengers much higher rates than usual to attract more drivers to meet the heavy demand.
Cab companies, which have seen customers and drivers flee to the app-based ride companies, are girding for battle on New Year’s Eve with special promotions to underscore that their prices never rise. (In fact, they cannot because they are regulated.)
“There’s a massive PR war going on right now, and New Year’s Eve is a really important time,” said Jan Dawson, chief analyst of consulting firm Jackdaw Research. “That’s why cab companies are mounting their own PR offensive. It’s an opportunity to try to put a dent in Uber’s big night.”
Flywheel, which provides an app for users to summon taxicabs with their smartphones, will offer a flat $10 rate for all Flywheel-summoned cab rides within San Francisco from 8 p.m. Wednesday to 3 a.m. Thursday. The same price will apply in Seattle and Flywheel’s new markets of San Diego and Sacramento.
“Uber can charge 30 times (normal) or whatever they hell they want to do, but we want to make sure anyone who takes a taxi pays a flat fee,” said Flywheel CEO Rakesh Mathur. (He clarified that the 30-times number was “just made up.”)
That promotion will cost Flywheel a pretty penny. The startup will pay cabbies double what the metered rates would have been — so in effect, they receive surge pricing, without passengers having to pay it. While Flywheel doesn’t have the massive war chest of Uber, which has raised about $3 billion, it has a respectable $30 million in venture backing, including a recent $12 million round.
“I’m happy (to spend) a lot of money because it will get a lot of people using taxis and Flywheel,” Mathur said, likening the struggling cabbies to “Return of the Jedi” underdogs. Almost 90 percent of San Francisco cabs now use Flywheel, he said.
“The taxi industry needs to rapidly retool and face the realities of the smartphone,” Mathur said.
San Francisco’s Luxor Cabs has an even better deal: Free rides (up to a $35 value) within San Francisco from 10 p.m. to 4 a.m., sponsored by a personal-injury law firm. They are available for people leaving a bar or restaurant to go to a residence and must be summoned by calling Luxor’s dispatch at (415) 282-4141; not through street hails or apps.
“Transparent, predictable pricing is one of the things that distinguishes us from the new ride services, who charge pretty much whatever they want,” said Charles Rathbone, Luxor assistant manager.
Uber held a press briefing on Monday to explain its position that its surge pricing — which it calls dynamic pricing — isn’t a form of gouging. It instead solves the perennial problem of balancing supply and demand on New Year’s Eve. It pointed out that passengers are informed of the higher rates before they confirm their ride requests, and can choose to receive a text when surge pricing ends. Uber is even seeking to patent the idea.
Lyft ordinarily caps its “Prime Time” maximum at three times normal rates; on New Year’s Eve, the limit will be five times normal, it said. In keeping with its warm-and-friendly image, Lyft’s promotion centers on the fact that co-founder and President John Zimmer will take to the wheel as a Lyft driver on New Year’s Eve, with his mother as co-pilot.
Both Lyft and Uber have partnered with Mothers Against Drunk Driving and will donate a percentage of New Year’s Eve ride fees to that organization.
Uber e-mailed drivers and said “some” would make $70 or $80 an hour on the big night. But not all ride-service drivers agree that surge pricing benefits them.
“Passengers always ask me if I clean up when surge pricing comes in, but a lot of times I end up getting stuck in gridlock,” said Peter Ashlock, who drives for Uber and Lyft in San Francisco. “You don’t make any money while you’re sitting in traffic.”
Article and Photos Sourced From: http://www.sfgate.com/bayarea/article/Uber-Lyft-vs-taxis-in-New-Year-s-Eve-fare-war-5984146.php
In this increasingly competitive segment of the transportation industry, both startups and stalwarts are launching marketing blitzes leading up to a holiday when demand for rides can exceed the supply of drivers.
Uber and Lyft will charge passengers much higher rates than usual to attract more drivers to meet the heavy demand.
Cab companies, which have seen customers and drivers flee to the app-based ride companies, are girding for battle on New Year’s Eve with special promotions to underscore that their prices never rise. (In fact, they cannot because they are regulated.)
“There’s a massive PR war going on right now, and New Year’s Eve is a really important time,” said Jan Dawson, chief analyst of consulting firm Jackdaw Research. “That’s why cab companies are mounting their own PR offensive. It’s an opportunity to try to put a dent in Uber’s big night.”
Flywheel, which provides an app for users to summon taxicabs with their smartphones, will offer a flat $10 rate for all Flywheel-summoned cab rides within San Francisco from 8 p.m. Wednesday to 3 a.m. Thursday. The same price will apply in Seattle and Flywheel’s new markets of San Diego and Sacramento.
“Uber can charge 30 times (normal) or whatever they hell they want to do, but we want to make sure anyone who takes a taxi pays a flat fee,” said Flywheel CEO Rakesh Mathur. (He clarified that the 30-times number was “just made up.”)
That promotion will cost Flywheel a pretty penny. The startup will pay cabbies double what the metered rates would have been — so in effect, they receive surge pricing, without passengers having to pay it. While Flywheel doesn’t have the massive war chest of Uber, which has raised about $3 billion, it has a respectable $30 million in venture backing, including a recent $12 million round.
“I’m happy (to spend) a lot of money because it will get a lot of people using taxis and Flywheel,” Mathur said, likening the struggling cabbies to “Return of the Jedi” underdogs. Almost 90 percent of San Francisco cabs now use Flywheel, he said.
“The taxi industry needs to rapidly retool and face the realities of the smartphone,” Mathur said.
San Francisco’s Luxor Cabs has an even better deal: Free rides (up to a $35 value) within San Francisco from 10 p.m. to 4 a.m., sponsored by a personal-injury law firm. They are available for people leaving a bar or restaurant to go to a residence and must be summoned by calling Luxor’s dispatch at (415) 282-4141; not through street hails or apps.
“Transparent, predictable pricing is one of the things that distinguishes us from the new ride services, who charge pretty much whatever they want,” said Charles Rathbone, Luxor assistant manager.
Uber held a press briefing on Monday to explain its position that its surge pricing — which it calls dynamic pricing — isn’t a form of gouging. It instead solves the perennial problem of balancing supply and demand on New Year’s Eve. It pointed out that passengers are informed of the higher rates before they confirm their ride requests, and can choose to receive a text when surge pricing ends. Uber is even seeking to patent the idea.
Lyft ordinarily caps its “Prime Time” maximum at three times normal rates; on New Year’s Eve, the limit will be five times normal, it said. In keeping with its warm-and-friendly image, Lyft’s promotion centers on the fact that co-founder and President John Zimmer will take to the wheel as a Lyft driver on New Year’s Eve, with his mother as co-pilot.
Both Lyft and Uber have partnered with Mothers Against Drunk Driving and will donate a percentage of New Year’s Eve ride fees to that organization.
Uber e-mailed drivers and said “some” would make $70 or $80 an hour on the big night. But not all ride-service drivers agree that surge pricing benefits them.
“Passengers always ask me if I clean up when surge pricing comes in, but a lot of times I end up getting stuck in gridlock,” said Peter Ashlock, who drives for Uber and Lyft in San Francisco. “You don’t make any money while you’re sitting in traffic.”
Article and Photos Sourced From: http://www.sfgate.com/bayarea/article/Uber-Lyft-vs-taxis-in-New-Year-s-Eve-fare-war-5984146.php
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