Catching a Lyft
The Rising Popularity of Ridesharing

Also known as carpooling, lift sharing, and covoiturage, among other names, ridesharing has a longer history than the automobile. But sharing the expense of getting from one spot to another gained prominence during World War II, when gas rationing limited car trips, and again in the 1970s with both the oil and energy crises.

Ridesharing is a broad term and can even include instances when family members share rides. Generally, however, ridesharing is associated with sharing a trip to work. In the 21st century, ridesharing has gotten a makeover, as social media, smartphones, apps, and online services link people in need of a ride with people offering one. This hybrid service has been referred to as real-time ridesharing, dynamic ridesharing, dynamic carpooling, instant ridesharing, and novo ridesharing.

80 Percent of Car Seats are Empty America’s Second Highest Household Expense Source:

Novo Ridesharing

Novo ridesharing isn’t all that different from conventional taxi services, but what’s enabled its rapid growth is technology - particularly smartphones, social media, and GPS navigation devices. It is now even easier for someone with a smartphone to quickly find a driver nearby who can give him a lift. They also make it possible for people with cars to offer rides to people they would never otherwise meet, thereby avoiding the need of more costly taxi services.

Novo ridesharing is revolutionary in several ways. For one, more drivers than ever can offer rides to people in need. The greater supply means that getting a ride is easier and quicker, which in turn stimulates more demand.

Apps have eliminated the need for money to exchange hands. The ability to choose a car (and sometimes a driver), track a car’s location, and get notifications all help to elevate the conventional taxi experience. Rates are sometimes much lower, too.

Novo Ridesharing History

Novo ridesharing companies, including Uber, Lyft, Wingz, and Sidecar, got their start around 2009. But the roots of modern ridesharing go back to the 1990s, when real-time ridesharing efforts were launched using telephones. Earlier iterations didn’t make many inroads, however.

Uber, based in San Francisco, launched in 2009 as a quasi-traditional taxi service; it offered rides in high-class cars. In 2010, smartphone technology enabled riders to snag a ride using an app that also showed the car’s location. In 2012, Uber began including non-taxi vehicles, which broadened the market.

Uber Versus Cab Prices in San Francisco Cab Versus Uber Pickup Times Source:

Lyft, also headquartered in San Francisco, launched in 2012 as a spinoff of Zimride, a long-trip ridesharing company founded in 2007. Lyft has since focused on improving the novo ridesharing experience and the quality of drivers. Customer reviews are mixed and tend to be based on personal preferences.

While Uber offers a more conventional, back seat, taxi-like experience, Lyft’s tagline is "your friend with a car." It asks drivers to give passengers fist bumps, requires drivers and passengers to sign up via Facebook, encourages drivers to offer snacks and bottled water (at the drivers’ expense), have passengers sit in the front seat, and play music, too. Lyft’s efforts are focused on building a community. Lyft drivers must display a funky pink mustache on the front of their cars.

A front seat versus a back seat experience may have important implications for each of these companies in different markets. In San Francisco or Europe, sitting in the front seat of a taxi seems natural and inviting. In New York City and other markets, front seat riding may feel awkward.

Taxi Drivers & Governments Take Notice

Novo ridesharing companies have been taking business away from conventional taxi companies as well as depleting revenue from government taxi fees. As a result, a number of lawsuits and court challenges have been filed against ride-sharing companies in the U.S., Australia, Europe, and Canada. Taxi drivers in Paris have attacked the cars of Uber drivers, and taxi drivers in other European cities have blocked streets in protest.

In 2012, the California Public Utilities Commission required Uber, Lyft, Sidecar, and other novo ridesharing companies to stop offering services and pay fines, but an agreement in 2013 negated that order. In June of 2013, the Los Angeles Department of Transportation issued a cease and desist order to novo ridesharing companies, but they continue to operate in the city. In June 2014, Colorado became the first state to authorize ridesharing services. Maryland, Illinois, Washington, D.C., Arizona, and California are all working on passing regulations to allow ridesharing.

What Kind of Ridesharing Is This?

While one of the key aims of ridesharing or carpooling has always been to save fuel and protect the environment, taxi drivers have focused their opposition on the similarities that new ridesharing services have to traditional taxis, while ridesharing advocates emphasize the flexibility of the customer experience.

The expansion of any ridesharing, however, promises to yield big environmental benefits and financial savings. In 20 large U.S. metropolitan areas, the average automobile owner could save over $10,000 a year by using other forms of transportation. Overall, the average U.S. household spends over $7,000 a year owning and driving cars. Car-sharing and novo ridesharing services make living without a car more convenient, which enables and encourages people to give up their cars and drive less.

Savings Taking Public Transits Versus Owning a Vehicle Source:

Disclaimer: APTA releases this monthly Transit Savings Report to examine how an individual in a two-person household can save money by taking public transportation and living with one less car. These savings are based on the cost of commuting by public transportation compared to the cost of owning and driving a vehicle, which includes the June 17 average national gas price ($3.66 per gallon - reported by AAA) and the national unreserved monthly parking rate. The national average for a monthly unreserved parking space in a downtown business district is $166.26, according to the 2012 Colliers International Parking Rate Study. Over the course of a year, parking costs for a vehicle can amount to an average of $1,995.

The top 20 cities with the highest public transit ridership are ranked in order of their transit savings based on the purchase of a monthly public transit pass. The savings also factor in local gas prices for June 17, 2014 and the local monthly unreserved.

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