Inside the ride-share wars

A pink-mustached Lyft car at the Santa Monica pier on Lyft’s Facebook page.

There’s a Ride-Share War raging in the loading zones of Los Angeles.

On one side, you have a fleet of flashy social media companies with names like Lyft, Sidecar and Uber, which offer car services at the swipe of a smartphone app. On the other side, you have the hardened professionals behind the wheels of United Independent, Yellow Cab and the like.

I was totally ignorant of the Ride-Share War until I found myself caught in the cross-fire.

Last Saturday night, Los Angeles Times staff writer Jessica Gelt and I were conducting a ride-along with Lyft driver Ruth Grayson, a spunky young woman who has strung Christmas lights inside her red Honda Fit and doles out trivia questions to her passengers. We wanted to see how the ride-sharing service works and who were the early adopters using it to get around bars and night clubs. Lyft, which started in San Francisco but launched in LA this January, has their drivers hang pink furry mustaches on their car’s grill. It’s a catchy marketing idea. But it’s also a dead give-away to potential enemies.

Somewhere around Wilcox and Santa Monica Blvd., our mustachioed Honda crossed paths with a white and green taxi and the cabbie shot us the evil eye. Even though he was passing us on the other side of the road, he slowed to a near stop to gawk and then craned his neck to keep his gaze steady as we passed.

I wasn’t the only one who noticed.

“I’ve used Lyft like ten or twelve times and the cabs will stare you down,” said Campell Paget, a lanky singer from New Zealand who was Grayson’s passenger at the time. We dropped Paget off at the curb of a Hollywood club called Dragonfly and immediately incurred a steady stream of bus honks. Grayson said she’s used to this too. She gets honked at a lot for blocking driveways.

The basic gist of services like Lyft and SideCar is that you request a ride by hitting a button. The GPS locater tells the nearest driver where to scoop you. And after you’re dropped off you pay a suggested donation or reimbursement via pre-stored credit card information. In theory it’s supposed to be cheaper, friendlier and more efficient than a taxi dispatch. More like a carpool. Hence the name “ride-share.”

Yellow Cab’s General Manager William Rouse takes exception to that term. He prefers the word “bandits” because he says they skirt all the regulations that cab companies are forced to comply with, like liability insurance.

“Our cab companies are owned mostly by first generation immigrants, almost entirely by the taxi cab drivers themselves, so they’re small business owners who comply with the law. We would expect every other company to comply with the law as well, regardless of whether they are social media experts,” Rouse said.

[** In an interview, Yellow Cab GM Rouse also said he believes that the taxi app services offered by Yellow Cab and others already match those of the social media companies despite not having the venture capital of a Lyft or Sidecar.]

In San Francisco, where many of these ride-sharing services originated, there’s a legal battle brewing over whether Lyft, Sidecar, Uber and others will have to comply with the same rules as cabs. The on-going California Public Utilities Commission proceeding there could change the way the car services work here in Los Angeles too.

In the meantime, the tension between techies and cabbies in LA’s loading zones isn’t likely to ease. And you can hear more about how Lyft is changing the city’s drinking culture on KCRW’s Good Food.

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  1. johnny b
    Jun 29, 2014, 1:03 pm

    I find this ride share a very good idea and economical in the same time. Last time I got a very nice car with Xenon headlight bulbs, I shared it with 2 nice girls and we had a great time.

  2. johnny b
    Jun 29, 2014, 9:27 am

    Well, this ride share idea is not so bad after all and can bring you good money. All you need is to find some used cars for sale in Pittsburgh PA and you can start your business right away.

  • Guesty

    This should be easy as we live in California– TAX AND REGULATE ALL BUSINESS TO DEATH!

  • Lyfter

    I work as a Lyft driver and I can testify that the company does have liability insurance that covers all of its drivers and passengers.

  • Loot Lyft

    as the lyft driver quoted in this article, i would like to point out a bit of missing context: i was explaining to Evan and Jessica that Murphy's law of Lyft driving is that any time you pull in front of, or into, a seemingly abandoned and unused driveway to locate your passenger and scoop them, suddenly that space you're occupying becomes the hottest bit of real estate on the block.
    i don't "get honked at for blocking driveways a lot" because Murphy's law has taught me not to trust driveways whenever possible!
    and the other driver's right, in addition to each driver having their own personal (verified) insurance, Lyft has a policy to cover their drivers.
    otherwise, awesome story! thanks Evan for the fun night!

    • Emily

      Ruth- I'm an insurance broker, have been for 10 years, and I live in Chicago, own a car, and only drive it like twice a week. I loved the idea of becoming a driver for Lyft, and they contacted me recently since they are rapidly expanding here now. Unfortunately, I did some digging. Driver's individual Personal Auto policy specifically EXcludes operations relating to "A Public or Livery Conveyance" (verbatim- read your policy) which means: transporting people for a fee. Lyft will tell you that the "Donation" aspect of this allows them to skirt this minor detail, but when a Lyft driver seriously injures a passenger in an accident, don't you think their insurance company is going to investigate the accident? They will. And when they learned that you filed a 1099 with Lyft as an independant contractor (employee!) and are transporting people with the EXPECTATION that you will be making money on the ride, I guarantee that they will deny your claim on the basis of the above exclusion.

    • Emily

      (cont) Lord help any Lyft driver that incurs a multi-million dollar accident as a result of a bad injury- and gets sued for damages. The million dollar umbrella policy that Lyft claims sits excess of drivers' personal policies does not, as fas as I know, list individual drivers as "Additional Insureds" so I wouldn't trust that, either. Are you really willing to risk your financial future to make a measly $10? And did you really trust this company when they told you you're covered? Did you call and inform your insurer and ask them if you would be covered in the event of a Lyft accident? If not, I might do that if I were you. Just sayin.

  • Fassil Abebe

    If taxis and limos go through regulations to do the same work why shouldn't these bandits be required to as well. Otherwise we can all pick up people in our private cars anytime we want to make money; we just need to tie a bow-tie or something on the front of the car.

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  • johnny b

    Well, this ride share idea is not so bad after all and can bring you good money. All you need is to find some used cars for sale in Pittsburgh PA and you can start your business right away.

  • johnny b

    I find this ride share a very good idea and economical in the same time. Last time I got a very nice car with Xenon headlight bulbs, I shared it with 2 nice girls and we had a great time.