The Ridesharing Revolution

Since its launch in March 2009, Uber has given more than one billion rides in 71 countries around the globe. In some cities, from New York to Paris to Austin, Texas, the ride-sharing service has fueled outrage from cab companies and drivers as the alternative cuts into the previously dominant transportation system.

On-demand ridesharing services have exploded since the introduction of smart phones, as companies like Uber use GPS technologies to track drivers’ locations, and connect them to nearby riders.    In 2015, Uber’s annual revenue totaled around $1.5 billion.

However, Rockbridge County is not yet one of the areas in which Uber is available. The service is available in Roanoke, Charlottesville and Harrisonburg, three larger cities each about an hour away.

Gavin Fox, a Washington and Lee assistant professor of marketing and business administration, said he believes that Lexington’s market size is the main reason that Uber hasn’t created a hub for the area.

“At this point, Uber is just not interested,” Fox said, “We’re a peanuts market.”

While Uber is still trying to expand around the globe small communities such as Lexington and Rockbridge County are just not a priority.

Uber’s main competitor, Lyft, also does not have a hub in the Rockbridge area.

The fact that most places in downtown Lexington are in walking distance is another reason that the market hasn’t been tapped yet by any of the well-known ride-sharing companies, Fox said.

However, city officials and students in the Rockbridge area think Uber could soon complete the region on Interstate 81 between Roanoke and Harrisonburg.

“I think as millennials continue to look at our area and ways to attract younger professionals, they’re looking for more streamlined ways to move about the area and do the things they enjoy,” said Brian Brown, director of economic development for Buena Vista. “So we are going to have to look at these technologies (Uber) that can be attained.”

Sonia Brozak, a junior at Washington and Lee University and the secretary of the university’s student government, the Executive Committee, said she believes the availability of Uber would help reduce the risk of drunk driving.

“We definitely could use more taxi services of any sort, and even though there’s one taxi service that runs sometimes, I know that Uber would help people in the country get into town or from place to place,” Brozak said.

Washington and Lee already provides students with a transportation service called Traveller, which operates between 10 p.m. and 2 a.m. on Wednesday, Friday, and Saturdays. In addition, Traveller has a dispatch service that gives students a free ride home within five miles of campus during those same hours.  Dispatch runs every day of the week.

Brozak said that while it’s “fabulous that W&L is able to provide this service,” its limited hours will sometimes lead to drunk driving when people are forced to drive to a party or want to drink before the service begins.

“Uber would get rid of any temptation to drive your car away from a party,” Brozak said.

Uber’s demand charts for Charlottesville, Roanoke, and Blacksburg, all of which are home to at least one college or university, seem to suggest that the ride-sharing service would have a significant demand on party nights in Lexington, which is home to W&L and Virginia Military Institute.

In the Charlottesville-Harrisonburg region, which includes both the University of Virginia and James Madison University, average requests peak at midnight on Thursday, Friday, and Saturday nights, according to the Uber East Coast Partners website.

Roanoke and Blacksburg have similar demand Friday and Saturday nights, and UVA, JMU, and Virginia Tech all also run safe ride programs similar to Traveller.

The Rockbridge area does have one cab service, E’S-Y Rider Cab Company, which started in 2014. The service, which has 10 cars and 15 drivers, will drive anywhere within eight miles at a flat rate of $12. The service also provides rides to airports as far as Baltimore-Washington International Airport.

Eric Mason, the founder of E’S-Y Rider, doesn’t believe he has much competition in the transportation market. He noted that the other transportation providers in the area are one-person operations, and that the other services don’t offer the on-demand service that he does.

“They (bus transportation services) don’t really hurt us, because those people aren’t the same ones who would call a taxi every day,” Mason said.

There is one Uber Driver in Lexington

Peter Del Vecchio is a Lexington resident who has been driving for Uber for more than a year. Del Vecchio drives in Charlottesville two nights a week to supplement income from his other jobs.

Del Vecchio is also a licensed real estate agent and co-owns with his wife a healing center in downtown Lexington, where he teaches yogic breathing meditation and stress reduction. Del Vecchio has a son in college at the University of Virginia and said driving for Uber gives him better peace of mind about his monthly income.

“Financially, Uber makes the difference for me between being able to survive and not being able to survive,” Del Vecchio said.

Uber drivers are independent contractors and can drive as much or as little they want. Showing up to work is as easy as turning on their Uber app and waiting for people to request rides.

Del Vecchio found Uber when he was looking for another source of income. He said he makes $300 a week through Uber.

And, he said, Uber’s pay structure is suited so that most of the money ends up in the driver’s hands without customers feeling that they have to leave a tip.

For every trip, $1.30 is taken off the top, no matter what the total price is, because of Uber’s insurance policy. When a rider is in the car, Uber provides $1 million of insurance; a separate $250,000 policy covers the driver on his way to pick up a rider.

After that, the driver makes 75 percent of the total fare, while Uber collects the other 25 percent. (Del Vecchio makes 80 percent of the fare because he joined the company before the new payment structure.)

According to Forbes, traditional cab companies typically give just two-thirds of the fare to the drivers, a lower portion than that of an Uber driver. Many cab companies also require drivers to pay expensive fees upfront for “medallions” to regulate the number of cab drivers on the road.

While Del Vecchio and other drivers enjoy the Uber payment structure, drivers in California and Massachusetts filed a class-action lawsuit against Uber in 2013 and 2014 respectively, claiming Uber wasn’t treating drivers fairly. Among their complaints was that Uber drivers weren’t getting the tips that they believed they deserved.

In an April 21 settlement, Uber agreed that drivers would continue to be contractors.

Uber also stated that it will clearly let riders know that tips are not included in the fares. Drivers may post signs explaining that riders may tip, however they are not required to.

Del Vecchio agrees with others that Uber would serve as another sober ride option for college students in the Rockbridge area.

“I know from living in Lexington for the past nine years that cops give drunk in public tickets to students walking home,” Del Vecchio noted. “Uber could help serve the student population avoid this.”

“Uber has proven to save lives and tragedies,” Del Vecchio said.

Alcohol-related crashes in Virginia dropped by 332 incidents in 2015, according to data given to the Virginia DMV. Virginia DMV Commissioner Richard Holcomb believes that a lot of the credit for this is due to Uber’s and Lyft’s presence in the state.

“Other states are saying the same thing, that they are seeing a remarkable decrease because people are just pulling out that iPhone, hitting the app, getting in a car, and getting home safely instead of taking the risk of driving,” Holcomb said.

In December 2013, a driver carrying 10 Washington and Lee students crashed his car while returning from a party at a country house over five miles from campus. The student, who refused a Breathalyzer test, was convicted of aggravated involuntary manslaughter, DUI maiming and drunken driving. and is serving a sentence of three years.   One student, Kelsey Durkin, was killed in the wreck, and six of the students in the car were injured.

Because this party was held outside of Traveller’s range, W&L’s easiest sober ride program was unavailable.

Del Vecchio believes that the presence of Uber maybe could have averted that tragedy.

The possibility of a student-run, start-up “Uber”

As a professor who teaches app development courses, Gavin Fox has advised students looking to crack into the Uber-like market with their own apps for the Rockbridge area.

Fox is currently assisting a group of students with their app called “ScoopU”, which would provide app-using riders with lists of sober drivers of Washington and Lee’s 11 fraternities. The app uses global positioning system (GPS), so riders can locate drivers, and drivers would be able to respond to requests for rides.

ScoopU had a fantastic but premature launch for 10 days in August 2015, according to Fox. Various lawsuits against similar apps around the country combined with the app’s release through the W&L developer’s account forced Fox and his team to pull the app shortly thereafter.

“Right after the launch we got some calls from W&L’s general counsel, who explained that we would have to remove the app immediately and use a different account for it,” Fox said.

Moving forward, the students’ challenging launch of a ride-sharing app in Lexington hasn’t changed Fox’s opinion about the ride-sharing industry and apps’ general ability to grow the sharing economy.

The ScoopU team recently completed an independent study with Fox last semester, and is planning to relaunch the app in the fall.

As Fox sees it, “Apps are a critical linchpin of the sharing economy.”

 

 

Our Sharing Economy Experience

Millennials, people born between 1981 and 2000, are expected to be familiar with all of the up-and-coming trends, especially those linked to the almighty smartphone. The sharing economy—and its many incarnations—fits this description. But when the three of us began our reporting on this project, the only sharing economy service we were familiar with was Uber. It’s the go-to ride service option for our generation, requiring us only to press a button on a screen rather than speaking to another human being. But throughout our reporting, we’ve become familiar with the broad scope of the sharing economy—not only the services contained within it, but also with common themes that define it.

The triple threat

Perhaps the most prominent link between the sharing economy and our generation is the way in which “renters” and “sharers” communicate. It’s not just text. It’s not just e-mail. It’s not just in-app messaging. It’s all three.

The way that we contacted our potential providers was through their services’ messaging apps. Their messaging features were the most convenient method of contact. But invariably, when you sign up for these services, you must submit an e-mail address, and a phone number.

In order to get enough Airbnb hosts for our story, we had to “play the odds” by contacting about 20 listed properties in hopes of getting a few of them to agree to show us their place on camera. And when they began responding, chaos ensued. Our smartphones were inundated with responses.

And it wasn’t just for Airbnb, it was for other sharing apps as well. Each response meant three “bings” and vibrations—one for a text, one for an e-mail, and one for an in-app message. Three notifications for one message. It became overwhelming and distracting at times, and was a constant reminder of the sharing economy’s strong ties to smart phones and millennials.

The sharing economy ignored

Ever heard of Meal Sharing, Turo or Spinlister? Neither had we, until we began our research for this project. And it doesn’t appear that they will be going mainstream any time soon.

We found listings for these three apps online. These sharing economy services sounded cool to us; we could have a meal at a stranger’s home for a low price, Turo would let you rent someone’s car for a day and Spinlister lets you borrow somebody’s bike. But our experiences with all three services underscores that sharing services require attention on both sides of the transaction. Sometimes people who create a service lose interest.

Perhaps Gavin Fox, business professor at Washington and Lee University, best describes why not all sharing economy efforts are successful.

“The reality of it is most of those apps probably are not really being checked.”

Patrick McCarron rents a Spinlister bike and takes it for a ride on the Roanoke River Greenway.

Patrick McCarron rents a Spinlister bike and takes it for a ride on the Roanoke River Greenway.

He might just be right. Let’s look at some numbers:

  • There were a total of four Meal Sharing listings in Rockbridge County’s cities and surrounding cities. None of them responded to our meal requests.
  • We requested a bike from nine “Spinlisters” in Harrisonburg and Roanoke. We received two replies—one from Aaron who graciously let us rent his bike, and one from “Jeff G.”:

“That sounds cool but I don’t have any bikes for rent. I set up Spinlister several years ago and honestly forgot about it because no one around here uses the service.”

  • We contacted three of the more affordable Turo listings in the same area, hoping to borrow a car. We got one response:

“I would normally be down, but this weekend happens to be my wedding weekend. I’m leaving this Thursday to go to DC. I won’t be back with my car until later this month. Sorry! I hope you find someone.”

We did, however, receive nearly a 100 percent response rate from Airbnb hosts.

A personal touch

Our hypothesis: the sharing economy is more than just a transaction; it’s personal. Trust is a major component on both sides. How do I really know that my Airbnb guest won’t trash the place? What if my Spinlister bike sharer gives me a bike with a broken chain?

Antonia spoke to us and showed us around her 250 acres of land for about three hours. Mary took interest in what we’d be doing after graduation and also told us all about her own son. Aaron appeared to have taken time off work to meet us at 1 p.m. on a Tuesday afternoon to lend us his bike. He even allowed us to reschedule, since it rained the first day we were supposed to rent the bike and Spinlister has a very strict cancellation policy on its website.

None of them had to do these things, but they all appeared to have cared about us and our project.

The sharing economy is expanding rapidly, with different services popping up constantly. It has been fascinating to study the phenomenon in rural, western Virginia, which we’ve learned is just a spec on the world sharing economy map. While we are used to seeing Uber in the cities that we come from, we are surprised at the apparent success of Airbnb. At same time, the local community uses services like free, shared blue bikes, which in our opinion, could not succeed outside Lexington.

We won’t be surprised, though, if when we return one day, we might just take an Uber to reach our Lexington destination.