Saturday, June 18, 2016

Austin's uninspiring Uber/Lyft alternatives make pitches....


"Through wisdom a house is built,
And by understanding it is established;"
Proverbs 24:3

On Thursday afternoon, Capital Factory hosted an event for the new ridesharing companies that have emerged since the failure of Prop. 1.  We appreciate the work these companies are doing and think some of them (Luxe and Wingz specifically) have long-term potential.  Nevertheless, the notion that any of these companies can fill the void created by council's ridesharing restrictions in the short to medium term seems ambitious at best.

The six companies that presented were: RideAustin, Wingz, Arcade City, GetMe, Luxe, and Fasten; a few of them office at Capital Factory.

The most important takeaway is that every single one of these companies costs more than Uber and Lyft.  The price differential ranges from approximately 10% for Fasten to 20% for Wingz to essentially the same rate as taxis for GetMe.  Arcade City allows drivers to charge whatever they want to which the customer will agree; while that's great for the cause of decentralization, the fact that they couldn't even provide a range of prices was perhaps more revealing than intended.  (Of course, this is important because the appeal of Uber and Lyft has always been that their convenience is accompanied by a reasonable price.)

Unfortunately, several have technical issues that illustrate the challenges they will have becoming viable: RideAustin doesn't have an Android version of the App, Arcade City doesn't even have an app, GetMe has done 15 server updates since May, and Wingz requires you to book a ride at least an hour in advance.

By far, the most interesting company present was Luxe.  Their objective is to re-invent urban parking.  Luxe has valets drive your car to parking lots away from the urban core.  In other words, they're parking your car where land is cheaper than downtown.  By using land more efficiently, they probably have a very viable business model.  For example: parking in downtown Austin during the day ranges from $7 to $20 per hour; compared to that, $15 or so for Luxe is a bargain.  We also want to put in a good word for Wingz, who can probably find a profitable niche as an alternative to SuperShuttle type companies.

It's here that we must make an obvious point: Uber is actually a seven year old company.  They were already five years old when they came to Austin in 2014.  Thus, they had already smoothed out most of their technical and logistical issues before they scaled nationally.  Lyft is even older than Uber (though it operated under a different name until 2012).  Bless their hearts for trying, but all of these newer companies have more in common with Uber and Lyft circa 2010 than either of them today.

Bottom Line: This whole situation was completely avoidable and is completely depressing.

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Watch the event for yourself:

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