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Mobile App Review: Ride Sharing Services
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Mobile App Review: Ride Sharing Services - Executive Leadership Articles

Mobile App Review: Ride Sharing Services

Executive Leadership Articles

Mobile App Review: Ride Sharing Services

Ride-sharing services have been around in some cities for a few years now, but recently they seem to have moved from a space occupied by tech-savvy younger people to a more mainstream awareness and clientele. People who still scratch their heads in confusion over Instagram and Snapchat are using these services like old pros, and not only as customers: increasingly, the woman who picks you up in her Lexus for your trip home after a night of drinks with friends is nearly as likely to be a grandmother in her sixties as a college student in her twenties. For those uninitiated among us who have heard of these services but not yet taken the plunge, here’s a quick overview comparing the two giants in this space: Uber and Lyft.

At its simplest, basic level, to use one of these services, you launch an app on your phone, select an available driver, get to your destination, pay the driver through the app, and rate your experience.

Uber and Lyft are essentially taxi services. They are often called “ridesharing” services or “transportation networking companies,” because in most areas, there are laws regulating taxi cab services. As Uber and Lyft wriggle into a new space in the market, they try to differentiate themselves from traditional taxi companies and therefore avoid taxi-relevant laws. There are real differences between the two concepts: with ride-sharing services, the company is basically connecting people who need rides with people who have space in their cars for rides to give. They conceive of themselves as matching people in need with people who can fill those needs.

Both services work the same way. An app is downloaded to a smartphone. When the app is launched, the user creates an account, using credit or debit card information, phone numbers, and names. The user touches a button on the app that asks for a ride and a destination. The app uses geolocation to find drivers in the area, presenting a list of drivers from which to choose. The user selects a driver, is told how long it will be before pickup, and is given some pricing information. The app’s map shows real-time progress for the driver’s arrival.

Upon arrival at the user’s destination, the rider confirms payment, and both rider and driver are prompted to rate each other. This mutual rating system is a way to inspire the best behavior by both parties, as a bad driver rating can keep passengers from accepting rides, while a bad passenger rating can deter drivers from accepting riders. Here is another major difference between ride-sharing services and taxis, as the arrangement is an agreement between individual drivers and individual passengers, each provided with info about the other before anyone gets into anyone’s vehicle.

Pricing varies, but it tends to be much lower than traditional taxi services, averaging about a dollar a mile after the initial one-dollar fee to get into the car. Both Uber and Lyft employ a pricing practice called “surge” pricing, which multiplies the base price by as much as two to seven times, based on location and time. High-demand times (such as weekend evenings) and locations mean higher prices for riders and more pay for drivers, in an attempt to lure drivers to areas and times where they are most needed. Surge pricing has come under some scrutiny lately, and high-profile stories have shown the possibility of paying more for a ride during peak times versus traditional taxi services, whose rates are consistent.

Although both services use surge pricing, Uber tries to be clearer about what a passenger will pay for the ride, before the passenger gets into the car. Lyft’s surge pricing is less clear: riders are warned that surge pricing is in effect, but the exact surge multiplier isn’t given. However, Lyft typically doesn’t go above doubling the base fare at the peak of surge pricing, while Uber sometimes goes more than six times the base fare.

Most regular users of Uber and Lyft will tell you they save a lot of money compared to taking cabs, even with surge pricing in effect. They often share that when the difference is negligible, the ability to choose (or reject) a driver, to pay through the app, and to know with fair certainty how far away the driver is from picking them up make ride-sharing services a better deal.

There are a few caveats, of course. Personal safety is chief among them, and ride-sharing companies have responded by being slightly more selective in screening drivers than they used to be. And many cities, as they deal with this new option for consumers, have stepped in to regulate these companies so they have neither an unfair advantage over taxi companies nor find a way to skate around the consumer protections they’ve established. These city-by-city differences in regulation can be reflected in differences in pricing.

There are also a few differences in the services. Lyft fosters a casual, friendly approach, as if you’re piling into the backseat of a car driven by a friend. Uber’s approach is more formal, with drivers opening doors for passengers. Uber offers different levels of service as well, with UberX costing less, delivering more casual rides, and UberLux promising higher-end vehicles with higher prices for rides. This UberLux option has lured many professionals into using the service, as it can reliably be a nicer ride than a taxi company where you don’t know what’s showing up at your door. Uber insists it has a no-tipping policy, and there is no mechanism for tipping within the app, while Lyft will prompt the passenger for an optional tip.

Your options are not limited to these services, and availability is limited to larger cities, but once you’ve dipped your toes in the ride-sharing water, they might be worth exploring as well. If you find you prefer one service of the others, it’s still not a bad idea to have multiple apps on your smartphone, using your second choice when your first choice doesn’t have available drivers.

Ride-sharing apps are among the most impressive and promising developments in smartphones’ integration with the rest of our lives. We all need to get somewhere, and here is one way where new technology addresses some of the problems we’ve learned to live with in the older way of doing things, not only with higher pricing consumers can do nothing about, but more involvement by consumers in selecting the options that work best for them.

Our suggestion: start with Uber and Lyft, giving each one a try at a low-stakes moment. You don’t want to try a new option when you’re on your way to an important job interview, for example. Start with a trip to the mall or grocery store, perhaps with a friend, just to see how it works. Then stick with the one you prefer for a few trips, establishing your reputation as a good passenger. When you’ve got several rides under your belt, explore other options and see if there’s an up-and-comer in your area worth exploring.


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Mobile App Review: Ride Sharing Services - Executive Leadership Articles

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