Wednesday, March 26, 2014

Jamming the Streets with Lyft, Sidecar, Uber & the Illegals

Taxi Services investigator Eric Richholt invited me to ride with him and his partner Andres Martinez so I could photo & videograph the gridlock caused by a couple of thousand unregulated, fake cabs on the Friday and Saturday nights.

"You wouldn't believe it," he said. "People should see this."

"Is it worse than last time we went out?" I asked.

"Oh, yeah."

He was right. The traffic appears to have doubled in the last four months. The above photo was taken on Polk between Post & Sutter but it could have been taken anywhere along Polk all the way out to Union – a distance of over a mile. Here's a shot up Polk from Bush toward Pine.

Besides the Polk corridor, vehicles seeking fares cram the Mission district, Hayes Valley, the Castro, Union & 11th streets most weekend nights as seen in this shot down 11th between Folsom and Harrison.

So, why are they there?

This may sound like a stupid question. The obvious answer would seem to be that the cabs and pirate cabs are there because that's where the action is. However, there are far more vehicles trying to pick up fares on these streets than there are fares to be picked up. Taken all together the taxis, illegal taxis, limos, TNCs and random thieves out-number the customers by at least four or five to one. An estimate confirmed by Richholt.
The real answer, then, is that transportation vehicles are jamming these streets because there isn't enough business for them anywhere else. Let me be the last to admit that there weren't enough taxis in San Francisco a year or two ago but that's clearly not the case now.

While the new apps (including legal taxi apps like Flywheel) have undoubtedly increased the number of people using taxis and uninsured vehicles, the increase has naturally been limited. San Francisco is a small town. There are only so many people going out at night, only so many people going shopping, only so many going to the airport. Applying the theory of supply and demand, the number of TNCs should have leveled off a long time ago. As the amount of rides for each vehicle decreased, more and more TNCs should have chosen to stay home. But, as you can see, that is not what's happening.

The Myth of the Surge or Price Gouging 101

Spokespeople for Lyft, Sidecar & Uber provide an endless source of entertainment for language lovers like myself. Since the days of George Orwell, few have equalled TNC hucksters in the fine art of double-talk: Cars illegally transporting customers won't need licenses or commercial insurance if you call them "rideshares." Companies set up for the benefit of venture capitalists (VCs) won't have to pay taxes or assume responsibility for their actions if they say they are part of the "sharing community." Charging people a couple of hundred dollars to travel a few miles in the aftermath of Hurricane Sandy becomes a humanitarian act if you call it "surge pricing" instead of "price-gouging".

Watching Uber lawyers trying to keep straight faces while claiming that low-paid, professional drivers wouldn't pick anyone up when it gets really busy if not for "surge pricing" is especially amusing. Like nobody'd go to work on Friday nights or New Year's Eve without the "surge." It's amazing how well this particular bit of double-speak has played with the techie public. They actually think that it has to be busy for them to be charged three to nine times taxicab prices. Well ... if they rode with Lyft or Uber (Sidecar, claims that they don't "surge price." The driver decides what to charge) last Saturday night they were PRICE GOUGED when business was very, very slow. A new Flywheel customer of mine said that she was hit with a triple fare by Uber on a Tuesday morning at 10:30 a.m. when no convention was in town. 

Like serial criminals Lyft, Uber & (yes) Sidecar price-gouge because they can.

Venture Capital and Price Gouging 

Or, maybe they price gouge because they have to. 

According to Tech Crunch (an Uber investor), Uber so far has borrowed $361 million dollars, Lyft $82.5 million and Sidecar $20 million. Call me a stupid cab driver but don't these guys have to pay this money back at some time or other? More to the point, could they pay it back if they ran mama/papa companies like the the Seattle Council wants them to do? Like Taxi Services Director Christiane Hayashi wants them to do here? I think not. More important, neither do they.

Contrary to supply/demand theory, Lyft and Uber began flooding the streets with more bogus cabs at the precise moment that the business should have plateaued. In order to attract drivers a few months ago, Lyft wasn't charging them to work on Friday and Saturday nights. And, Uber began lending drivers money to buy cars. The end result is more vehicles with less and less business for each one.

Price gouging is what makes it all work. It's what brings the drivers out and keeps them there polluting and congesting the streets. All it takes is one $50 ride from the Marina to the Mission to cover a driver's expenses for the night. The inflated number of vehicles creates an illusion of expanding business that attracts yet more VC investors to the TNCs, and the extravagant pricing helps make the companies look more profitable than they actually are. Great for those future Lyft and Uber IPOs. Maybe not so good for the people who buy the stocks.

And, oh yes, those drivers who bought their cars with Uber's venture capital have to keep working – slow or not – to pay off their loans.

Thus the streets stay jammed and green house gases perfume the air whether the city is busy or not.

Jamming the Streets Part 2 coming soon.


  1. Great report. Thank you.

  2. Really great report Ed. This seems like a hopeless situation. Can the city (Board of Supervisors, SFMTA or City Attorney) do anything? Or has the CPUC tied their hands by taking over? I remember specifically hearing the woman from the CPUC stating at the Board of Supervisors meeting that they only take direction from the California Legislature. Thanks so much.

  3. VERY GOOD ARTICLE; thanks to drivers like you who are writing about such illegal cabs such as Uber and Lyft.
    I am happy that TLPA has continued to battle these illegal cabs.
    join the TLPA.
    CSL Transportation
    member TLPA

  4. Limo Operator? Tired of loosing business and drivers to Uber?

    Compete with Uber. Get organised. Use Shift.

    Shit Transportation Platform

    If you're keen to learn more, please get in contact with me.

    Benjamin Westrup
    0049 30 120 222 51

  5. Correct Ed, based on my observations of Valencia Street from July 2013, TNC traffic is up 5-6 times what it used to way for a taxi or limo to make any living

  6. I am seeing more and more UBERs with less and less passengers inside. You can see the stress in
    their eyes as they honk honk and honk at cabs as we pickup or drop off and they have started making unsafe lane changes and speeding through the city to get to orders. I am seeing more and more people waiting with their phone in their hands and no UBER to pick them up steve webb big dog city 804 I have worked 30 hours this week non stop and made less than 300. I feel like a black man in Mississippi before the Civil War