Los Angeles Rideshare Services Stand Up to Dept. of Transportation and Grumpy Cabbies


The Los Angeles Department of Transportation issued cease-and-desist letters Monday to phone application companies that provide car-for-hire services. Nevertheless, Los Angeles rideshare services Lyft, Sidecar, and Uber say they will continue operating. The Los Angeles Times reports:

Lyft and Uber said they have agreements in place with the California Public Utilities Commission that permit them to operate statewide. Both companies said they plan to continue operating in Los Angeles.

"We already signed an agreement with the California Public Utilities Commission explicitly stating that Uber services, including the eco-friendly UberX, are authorized to operate statewide," an Uber spokesman said.

The letters from the city said drivers of the services may be subject to arrest and could have their cars impounded for as long as 30 days. The letters were  followed Tuesday by taxicab driver protests at City Hall against the ridesharing services.

"These companies have no permits, and that's a real concern to us," said Thomas Drischler, the city's taxicab administrator. "That raises safety issues."

Sidecar announced it would maintain business as usual, but we can expect cabbies to keep making a stink, per dailybreeze.com:

"These rogue taxis are bypassing all safety regulations created to protect riders and drivers," William Rouse, general manager of Los Angeles Yellow Cab, said in a statement. "Not only are these high-tech bandit cabs unsafe, they are breaking regulatory standards and disenfranchising safe, legal taxi drivers."   

The only thing these clean and convenient bandit cabs stole were the hearts of disgruntled taxi passengers. Uber is more of a deluxe taxi service, but Sidecar and Lyft are purely "donation-based." They represent a completely free market as the prices are solely driven by untampered supply and demand.

How it works: passengers pay what they think is appropriate for a certain trip based on time, distance and service. The service's database keeps tabs on all of these payments, and in return has suggested amounts that future passengers can then use for reference. If you're thinking, "can't I just pay nothing since there is no price requirement?" Well, you can. But don't ever expect to get picked up again.

That's the other component of the business plan—it's completely ratings-based. If you err on the extremely frugal side, the driver will make a note of it in the database, drivers will see that addendum and will probably not respond to your future pick-up requests. Like-wise, if you leave a hefty tip, you'll probably get picked up in record time down the road.

Same goes for the drivers. They are all volunters. While there aren't any formal licenses (beyond a driver's license), the companies do vet the drivers before they can sign up officially. Good drivers tend to get high ratings from passengers, and are thus requested more often. Bad and/or creepy drivers get bad ratings, fewer and fewer requests, and are removed from the service. This is probably far more effective than any standardized driving test considering the average cab ride's swerves and abrupt stops.

On to the main critique: Can these services guarantee passenger safety? They can't, not completely. But these services are more accountable than taxis. Their databases have a complete record of each transaction including information on the passenger, driver, where they went, how much was exchanged, etc. If you get in a taxi on the side of the road and the cabbie decides to kidnap and murder you, there probably won't be a record of it. If a Lyft driver decides to cause some mischief, he/she probably won't get too far.

Lyft, Uber and Sidecar also understand the use of modern technology like using phone apps and those credit card device things. This competition is utterly necessary and should incentivize traditional cabs to improve their quality across the board. Instead the cabbies are spending their time protesting these "bandits" in front of city hall.