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

Real Estate Roundup: 3 Bay Area Cities Rank Amongst Nation’s Coolest

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
SAN FRANCISCO 1 OF TOP 5 COOLEST U.S. CITIES
The Bay Area’s thriving economy is perhaps the primary driver of real estate demand, but could our region’s inherent coolness also play a role? Forbes recently ranked San Francisco as the fifth coolest city in the U.S., and the second coolest on the West Coast, behind Seattle.
The publication quantified “cool” by using a mix of the number of available entertainment options, the amount of restaurants and bars, cultural diversity, and of course, population growth. Forbes ranked Oakland as the 12th coolest city in America, while San Jose tied for No. 16.
And while many of us here in the Bay Area would no doubt argue that our three local cities should place higher on the list, we’ll take the compliment in stride.

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BAY AREA JOB GROWTH DRIVING BOTH HOME AND RENT PRICES
Whether the cool factor is helping fuel Bay Area housing prices is an open question, but there’s no argument that our region’s excellent job market is a key component.
In a recent blog post, Trulia Chief Economist Jed Kolko says that job growth is now driving home price appreciation more than the rebound from the recession.“The correlation between price changes and employment changes in July 2014 is 0.53 – a strong and statistically significant relationship,” Kolko wrote.
Trulia notes that exceptional job growth in both San Francisco and Oakland is also pushing rents way up. As of July, the company says, the median monthly rent for a two-bedroom apartment in San Francisco was $3,550 – the highest in the U.S. – while Oakland was the third priciest, at $2,600.

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SMALL PRICE HIKES IMPACT U.S. HOMEBUYER POOL IN A BIG WAY
A thousand bucks doesn’t seem like a lot of money, especially in the high-dollar world of Bay Area real estate. But nationally, every $1,000 home price gain pushes a surprisingly large number of potential buyers out of the market.
According to a study from the National Association of Home Builders, a mere $1,000 increase in home prices removes more than 206,000 total buyers from the U.S. market. The California market displayed the second-highest “priced-out effect” in the nation, with every $1,000 jump shutting out 14,423 house hunters.
Locally, adding $1,000 to the price of a home in the San Francisco and Oakland metro areas prices out more than twice as many buyers (1,597) as it does in San Jose (729). A $1,000 price hike had less of an effect in the North Bay, removing 262 buyers in the Santa Rosa metro area and 19 in Napa.

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CLOSING COSTS UP FOR SECOND STRAIGHT YEAR
Homebuyers who are still sitting on the fence might find some motivation in the fact that closing costs have risen nearly 6 percent from a year ago.
A recent Bankrate survey says that the average closing costs on a $200,000 loan increased to $2,539 in 2014, up from $2,402 last year and $2,263 in 2012. Bankrate attributes the spike to the higher business costs under the new qualified-mortgage rule.
“The No. 1 at the moment is the qualified mortgage rule,” National Bank of Kansas City Vice President Dan Stevens told Bankrate. “That alone has really added additional man-hours to the mortgage approval process.”


(Photo: Flickr/Franco Follni)

Boon or bane, Yelp's impact undeniable

Yelp changed everything.

Chef Jorge Martinez at Loló in the Mission District has switched from
OpenTable reservations to Yelp's SeatMe. Photo: Leah Millis, The Chronicle

That's chef-restaurateur Dennis Leary's reaction when asked about the impact that Yelp - the user-review site celebrating its 10th anniversary this month - has had on San Francisco. Thad Vogler and Michael Chiarello have similar reactions - and in all likelihood, so would thousands of other chefs, servers and bartenders.

No local sector has been more affected by the rise of Yelp than restaurants and bars, the site's most-reviewed categories. Yet while Yelp has been the target of restaurateurs' well-documented angst and anger, there's no doubt the San Francisco digital company has dramatically transformed the hospitality business.

Restaurateurs have overhauled their strategies for marketing, media coverage, online presence and staff management. But several new Yelp initiatives, including a Yelp-operated reservation system, mean that even more recalibrations are en route. In its first decade, the company has established a huge, cult-like following. According to its earnings report released Wednesday, it boasts 61 million user reviews and 138 million monthly visitors - nearly doubled from 2012.

That success has come with controversy. Yelp has also been the bane of many small-business owners who feel at the mercy of anonymous, amateur critics who assign ratings for every single thing, from the French Laundry to San Quentin State Prison (three stars). It has spurred myriad online diatribes and breathless media seminars. It also has been accused of extortion, defamation and poor ethics, both inside and outside the court of law. No charges have stuck.

City's zeitgeist: food

The debate over Yelp is now, to a large degree, moot. It operates in 27 countries and has thrived in ways other user-review sites have not. And, perhaps more than any other tech company, Yelp has tapped into the city's zeitgeist: food.

"Yelp is emblematic of the state of our industry," said Vogler, who owns Bar Agricole and Trou Normand in San Francisco. The industry "has never been better. People are really interested in the food and beverage industry."

Trou Normand is located on the ground floor of 140 New Montgomery, where Yelp's headquarters takes up 15 floors.

"I'm a bartender that gets to be taken seriously as business owner. That would not have been the case 20 years ago."

Yelp has shepherded in an era in which restaurants are trophies on a digital wall. Being the first to review a restaurant "earns" a Yelper a blue badge of online honor, and diners flock from hot spot to hot spot (and write about it online).

Though that fetishizing of the new and the shiny may come at the expense of attention to more established places, it has also allowed small, otherwise hidden restaurants to be discovered more easily. A 2011 Harvard study found that "Yelp causes demand to shift from chains to independent restaurants." 

Laura (left), Celia, Maria and Adriana Rosas
wait for their sandwiches in the Castro at Ike's Place,
which took off on its second try after advertising on Yelp.
Photo: Leah Millis, The Chronicle

 

In doing so, Yelp can act as a megaphone for the overall restaurant industry.
Ike Shehadeh opened his first San Francisco sandwich shop in 2001, only to close it soon thereafter. In 2007, he gave it another go and opened Ike's Place in the Castro. This time, it caught on, buoyed by online resources like Yelp, where he advertised for 18 early months.

"It was literally the same exact sandwich as it is now," said Shehadeh. "The Internet age allowed people to advertise for you."

Now, Ike's Place is the most-reviewed San Francisco restaurant on Yelp, with 6,207 reviews as of last week, easily beating out Brenda's French Soul Food (5,208), Burma Superstar (4,894) and House of Prime Rib (4,200).

Shehadeh interacts with diners online via Yelp, Facebook, Twitter and even MySpace. He no longer pays for advertising anywhere, though he does occasionally cater Yelp holiday parties and similar company events.

Above: Fred Lavadores reads an order before preparing it at Loló in
San Francisco. Photo: Leah Millis, The Chronicle |

For diners, Yelp has also become a modern version of the Yellow Pages, supplying basic information like hours and menus, and links to the restaurant's website and online reservations, while for restaurateurs, it's become a resource for customer behavior.
They can use what's written to identify recurring problems, be it overpricing or oversalting, as well as to experiment with newer developments like online delivery, tracking mobile metrics and customer demographics.

Free data about business

"I look at Yelp as a management tool," said Thomas Odermatt of Roli Roti, who likens it to free data about his business, which currently includes six food trucks across 40 Bay Area farmers' markets.
"You get a pretty good snapshot of your market. I can sit in Hayward and have a glance at it, and I kind of know what my little secret shoppers are telling me. It's basically polling them."
Yelp has changed the way new restaurants wade into the market. Whereas professional critics typically wait a month before visiting a new restaurant, Yelpers flood in on day one, if not earlier. Getting off to good reviews can help launch a business, while a rough start can bury one.
Anderson Pugash checked Yelp daily when he opened Palm House in Cow Hollow in May.
"You have a brand-new menu that the public hasn't tasted before, and you need to understand what your consumers like and don't like. It's a source for objective feedback, most of the time," he said.
One way to foster buzz - and those all-important positive early reviews - is to host preopening parties for Yelpers. Of course, not all business owners can afford to open the doors for a dedicated Yelp event, and others view it as a pay-to-play situation: Make nice with Yelp, or risk alienation.
Yelp's San Francisco Community Manager Abby Schwarz points out that Yelp makes the deal clear with restaurants: "(Restaurants) provide the services with the understanding that (the parties are) marketing."

Left: Chef Jorge Martinez writes the special for the evening at Loló. Restaurateurs
can often tell quickly from Yelp reviews whether a
dish needs an adjustment. Photo: Leah Millis, The Chronicle

Yelp does ask its users to reveal when they've received freebies, but this still leaves restaurateurs in a tough position.

"It's like OpenTable," said Dennis Lee of Namu Gaji, who declines to host Yelp events but acknowledges that there is no escaping Yelp's ripple effects. A business can't opt out of being listed on the site.

"You have to do it, which is strange and weird about the world we live in now. There are corporations that are part of the fabric of what we do."

Another of those corporations is OpenTable, which got its start in San Francisco and now virtually monopolizes online reservations around the country. Between charging restaurants monthly dues, installation fees and individual reservation fees, it is expensive - especially for independent restaurants that operate on small margins. But if a restaurant opts out of OpenTable, it all but disappears from online reservation searches.

In an effort to challenge OpenTable, Yelp acquired SeatMe, a smaller San Francisco online reservation service, in July 2013 for a reported $12.7 million. Since Yelp's acquisition, the number of restaurants using SeatMe has tripled to 600.

Through the transition, Yelp has continued to feature OpenTable reservations on its restaurant pages, but many restaurateurs wonder if the Yelp-backed reservation system can do what so many counterparts have not: disrupt the OpenTable domination.

"They've aggregated a huge mass of Yelpers, and you need something to break through the ice. Great technology is great, but you need a population," said Michael Chiarello, pointing out that Yelp has that army.

Chiarello says that he pays roughly $4,500 a month for OpenTable at Coqueta; add in his other restaurant, Bottega in Yountville, and he pays around $100,000 a year for online reservations. SeatMe has a flat rate of $99 per month; there are no cover fees or commitment fees. It's a dramatic difference.

Loló and offshoot Loló Cevicheria recently made the switch from OpenTable to SeatMe. One reason, said chef-partner Jorge Martinez, was that his OpenTable bill at Loló, where he can serve more than 400 diners on a busy Saturday, was around $2,000 a month. Another, he said, is that the iPad-based system is more convenient than OpenTable's bulky monitors.

Jenny Schwarz, the owner of Oakland's Hopscotch, has been using SeatMe since her restaurant opened two years ago. She says the transition to Yelp has been fairly seamless.
"As most restaurants feel, I'm not the hugest proponent of Yelp," she said. "But I hope that it breaks the OpenTable stronghold. It needs to be a fair market."
If the rise of Yelp continues, expect to see it physically manifested at the table, too. Mike Ghaffary, Yelp's vice president of business development, envisions ways to embed the Yelp experience even more deeply into the dining experience, blurring the lines between online and offline with video features, customizable meals and integrated usage between owner and user. Whether that prediction is a utopia or dystopia, San Francisco will be ground zero.
"There's something very Northern California (about) the apparatus of Yelp," said Trou Normand's Vogler, pointing out how New York and Paris restaurants have a fraction of the reviews of their San Francisco counterparts.
"We don't like to say things face-to-face. I don't think it's an accident that in this culture climate, Yelp really works."
Leary, who owns the recently opened Natoma Cabana and other places, agreed.
"It's a strange subculture," he said. "Or maybe, it is the culture."

Paolo Lucchesi is a San Francisco Chronicle staff writer. E-mail: plucchesi@sfchronicle.com Twitter: @lucchesi

Photos and articles sourced from:  http://www.sfgate.com/restaurants/article/Boon-or-bane-Yelp-s-impact-undeniable-5664925.php#photo-6668312