Ridesharing today is very common in the US with companies like Uber and Lyft becoming household names over that past few years. However, ridesharing in the US actually dates back to World War II where it arose and then again during the 1970’s oil crisis. It was though the introduction of GPS in correlation with the advancements and availability of the smartphone that was able to bring to culmination the idea that essentially the taxicab concept could be greatly improved and really rethought. The idea that a rider in need of transportation could be digitally connected to a trusted driver for a pre-agreed price was the basic concept. The rider could see how far away the driver was and would accept a price determined by the ride-sharing system in use. Uber and Lyft, the two major ride sharing company leaders, have no doubt changed the transportation industry, but has it all been for the best? Additionally, what are the next steps for this cultural phenomenon and what will be involved?
Uber and Lyft have promoted convenience in movement thereby enhancing connectivity. The convenience brought about by these ridesharing apps has changed the concept of car ownership especially among the millennial generation. Uber and Lyft are promoting a collaborative approach in movement and this is a major worry for vehicle manufacturers. The reason for this is that if the trend continues, then the vehicle manufacturers are likely to experience reduced sales due to reduced purchases especially in the United States. In addition, there are many people who are moving to the urban areas and relying on Uber and Lyft for their movement. Uber and Lyft are therefore likely to influence important decisions like where people live and whether such people need a car. Uber and Lyft have also changed the night life in different cities like California and Los Angeles among other cities. This is due to the convenience that they provide to city revelers who are sure that they will not be arrested for drunk driving because of Uber and Lyft availability.
Any technological advancement is characterized with rapid speed of evolution. This is the same for Uber and Lyft. These platforms are promising to be real game changers in the fight on global warming by reducing the single-passenger vehicles on the streets. Uber and Lyft platforms are billed to help reduce congestion and pollution that result from this traffic congestion. Uber and Lyft have allowed for ridesharing where two or more people going the same way can share a ride. The same model is being adapted and tested for use by commuters in order to reduce single-person driving on the streets (Rideamigos, 2017). Uber and Lyft are competing strongly against the taxicabs. The effect of this is that the companies will reduce the prevalence of cartels within the taxicab business (Horpedahl, 2015). This is because Uber and Lyft have a clear criterion on the cars that are to be admitted to their network. This is different from the taxicabs that do not have very specific criteria on inclusion.
Uber and Lyft have been criticized for the manner in which they treat the drivers (Davies et al., 2017). Even before the advent of Uber and Lyft, drivers were classified as independent contractors. Uber drivers are not entitled to minimum wage and overtime pay yet there are times when they work beyond the stipulated times. Uber has also connected drivers with lenders. This has resulted in instances when subprime loans have been offered to some drivers with Uber guaranteeing the loans. The company then deducts the money directly from the driver’s pay. The predatory leasing model and the exploitative driver working relationship may form culture of the transport industry (Fredrickson, 2015 September 14). However, Epstein (2015) has a different opinion. He believes that Uber and Lyft are right in classifying their drivers as independent contractors and not as employees. This is due to the costs that the companies would incur were they to consider the drivers as employees (Epstein, 2015). Uber and Lyft set the wages for the drivers, have the right of terminating the contracts of the drivers and using the drivers for their core business yet they do not consider the drivers as employees. This shows the manner in which these taxi-hailing services have changed the traditional employer-employee relationships. The drivers’ wages are calculated on a commission basis and the company does not offer any sick leave or allowances to the drivers. The company even discourages the culture of tips to be offered to drivers. On the other hand, Uber and Lyft have insisted that they are technology platforms that connect drivers with riders. Drivers are considered as businesspersons who enter into a relationship with Uber and Lyft on their own volition. This should therefore not be misclassified as employment relations. As has been mentioned, Uber has worked with creditors to improve the capacity of its networks. Through this relationship, many drivers have managed to receive credit through which they have upgraded their cars or bought new cars. When looked at the face value, this raises important question on how Uber has helped promote economic development of contracted drivers. Going forward as Rogers (2015) asserts, the advent of Uber has created a situation where the society members will choose the jobs to consider. The jobs that will be considered menial will be left out.
- Davies, A.R., Donald, B., Gray, M., & Knox-Hayes, J. (2017). Sharing economies: moving beyond binaries in a digital age. Cambridge Journal of Regions, Economy and Society, 10(2), 209-230.
- Epstein, R. (2015). Lyft out: a bad legal ruling in California could impede ride services, one of the most promising offspring of the sharing economy. Hoover Digest, no. 3, 2015, p. 68
- Fredrickson, C. (2015 September 14). It’s not just Uber: Why the taxi industry needs an overhaul. The American Prospect. Retrieved from http://prospect.org/article/its-not-just-uber-why-taxi-industry-needs-overhaul
- Horpedahl, J. (2015). Ideology Uber Alles? Economics bloggers on Uber, Lyft, and other transportation network companies. Econ Journal Watch, 12(3), 360-374.
- Rideamigos. (2017). Shifting the transportation paradigm: The evolution and impact of ridesharing on cultures and economies. Rideamigos. Retrieved from https://rideamigos.com/ridesharing-shifting-the-transportation-paradigm/
- Rogers, B. (2015). The social costs of Uber. The University of Chicago Law Review Dialogue, 82, 85-102.