Rideshare as an Economic Advantage


The rideshare trend in metro areas across the United States is slowly spreading like prairie grass during an ideal summer. A major question at this point is whether or not people in metro areas with poor mass transportation options will take these companies seriously. Some may try them out for the novel experience once or twice before deciding it is less convenient than just jumping into their subways, buses or taxis, and return to old habitual methods. Some city dwellers recognize that using a service of this type is an economic advantage with fewer negative options.

Americans like their cars, but in large metropolitan areas of America like Phoenix, Chicago, Milwaukee, San Francisco, Seattle and Los Angeles, city dwellers are discovering that a car is more of an application than a piece of hardware. Increasingly, the thought has become that it is unnecessary to park two thousands pounds of metal on the street or in a garage, draining finances, when it is more feasible to hire a vehicle.

Owning a vehicle in a bustling metropolis is more expensive than taking a bus or the subway from any corner or within a few blocks ‘walk from a boarding station. This holds true especially in the Phoenix metro area, where a drive across the Valley of the Sun can be an 80-mile jaunt, one way. With gas at a premium and the difficulty in finding a parking space that does not become a morning exercise routine, it becomes more feasible to not own a vehicle, but rather to use a transportation service when needed instead.

Rideshare car companies are on the rise and their advantage to city dwellers is a serendipitous opportunity. Members of the Millennial generation do not share the love of cars inherent in older Americans, but view them as tools which are not a necessity. This thought process is the hook that rideshare companies are using to garner more clients.

Three of these companies operate in Phoenix. RubyRide, Uber and Lyft may be the new way to get around town. Lyft is already well-established across the country with service in 31 states, while Uber boasts a presence in 80 cities in this country and in 38 countries throughout the world. Depending upon your circumstance, Uber also offers a ride for every pocketbook – from hybrid cars to SUVs.

Lyft’s trademark pink mustache on the grill of its cars is an easy identification symbol that has helped garner a colorful spectrum of passengers across the country. A community service approach has also branded Lyft as a friendly, helpful company that offers customers a sense of security and confidence while in the backseat. Lyft seeks out projects to clean up parks, initiates food drives for food banks and helps senior citizens with rides to their medical appointments. The community service approach is an economic advantage for this rider-friendly company.

To break into this market, RubyRide has taken a slightly different approach. Its founder, Jeff Ericson, an architect by profession, has thrown his drawing board into the parking lot. Using a greener approach, RubyRide is driving into Central Phoenix, utilizing hybrid cars as their advantage in this competitive market.

Having studied the market and doing due diligence with a high degree of research, Ericson is diverging from the current model of rider conveyance programs by taking a subscriber approach. A monthly fee provides limitless excursions in the Phoenix area and provides for a subscriber’s frequent needs. A comparison chart on the RubyRide website lists the advantages of using them over their competitors (taxis, Lyft and Uber).

Offering clients a subscription to the service gives them a feeling of confidence when they find a driver who may be more compatible with their personality and lifestyle. A real plus for using RubyRide, according to their website, is not the removal of the expense of auto ownership. This approach may also give users of the service a feeling of owning a personal vehicle without the need of being insured, and without worrying about upkeep, gas and maintenance.Rideshare

Not all roads to the Emerald city are paved with gold. Taxi and limousine services in Arizona are protesting this new concept of rider transportation and are lobbying for controls on these services. Both sides of this issue are citing insurance as a primary concern and responsibility. Those in favor of rideshare companies state they should not be held to the same standards and regulations as cabs and limos because passengers are members of a specific transportation service and are not just picked up by any driver, like a taxi company.

Cab and limo companies are worried because their drivers are insured all the time and drivers for these personal transport companies are not. Taxi and limo enterprises explain this is an unfair advantage because of insurance rates. For example, a personal transportation company like RubyRide may not be liable if one of their drivers is involved in an accident without a client in the vehicle. The driver may need to rely on his own insurance coverage at that time, while a taxi service is liable all the time, thus giving an unfair advantage to the rideshare company.

Meanwhile, back at the curb, the competitive market of hiring personal vehicle transportation continues to offer an economic advantage. The use of these services may change the face of many metro areas for years to come. Betting on rideshare is  a safe investment in the American transportation. People in this country like cars for getting from their home to the store, or anywhere else in a large city, but are currently reexamining the use and cost of a personal vehicle.

By Andy Towle

Arizona Tech Beat
Arizona Tech Beat
Insurance Journal

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