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Jun 17

Uber, Lyft, Bridj and the death of the taxi

I’ve recently become fascinated with transportation sharing services, both because they give me lots of free things and they have, in a short period, so significantly transformed the way we get around. Zipcar, which may already past its peak, was founded only 15 years ago. Uber was founded in just 2009, will generate $10 billion this year and private equity valued it recently at almost $40 billion, bigger than any publicly traded airline (Business Insider, November 2014).

Taxis will end up bearing the brunt of the pain. Taxi companies became stagnant monopoly, with little incentive to do anything except lobby for fare increases. Innovation, such as developing apps to call taxis, were simply not necessary. Uber changed all that. You press a button, type in where you want to go and then watch on your app as your driver comes to you. Concerned about the quality of your driver? You get to see ratings that other riders gave. If you’re having trouble finding each other, you can text or call. You’ll get a photo of the car and the driver’s license, so you know who to look for, and after you get out, there’s no exchange of cash; your card is charged.  And forget tipping. It’s simply a much nicer experience than cabs and tends to be cheaper. Truthfully, I don’t feel particularly bad for the taxi companies themselves. Rather, I feel sorry for the drivers, many of whom have taken loans and saved for years to purchase medallions, which have now been devalued significantly.

Cabs are not, of course, going away. Taxi companies are politically powerful and have the advantage of being the incumbent, while some consumers are reluctant to get in a car with a stranger (unless that stranger arrives in a yellow car) and cities are increasingly trying to create rules around the unregulated ride-share companies, an advantage that won’t last forever. But the horse has bolted and it’s too late to close the stable door on Uber.

The other nice thing about ride-share programs is that they are investing a ton in marketing, which means bonuses and free trials for consumers. It feels like 2000 again, when everything on the internet was free. I’ve tried a bunch of them, and here are my favorites:

Lyft: A few weeks ago, I would have told you that Uber was my preferred carrier. No longer. I had three free rides to use on Lyft, and found that the drivers are friendlier and the cars seem to be a little nicer. One driver told me that the parent company puts a lot of emphasis on the interpersonal experience, and I could tell. The downside is that it is not nearly as widespread as Uber and the app is a bit clunkier (no way to text your driver, for instance, only call). Still, the experience is superior. If you are a new user, use promo code MICHAEL918142 when you sign up and we each get a $30 credit.

Uber: Founded three whole years before Lyft, Uber is the “granddaddy” of personal ride-share programs. Its app is highly functional and you can text or call your driver. The experience is a little more sterile however, so you may just sit in the back and not interact with your driver. Surge pricing, or increases in fares as demand picks up, tends to drive consumers crazy and be less predictable than other carriers. Still, if you’re just looking for a cab-equivalent, it may be your best bet, particularly given its network of drivers. Sign up and use code michaelf1649 and we each get a $20 credit.

Bridj is my personal favorite shared van service. Currently only in DC and Boston, the “luxury van” carries consumer from cities to population areas based on demographic analysis. A ride costs me $2, although I’ve seen it as high as $4. It cuts my commute by one-third to one-half and is a heck of a lot more comfortable than the subway. Use code KfeQog and we each get five free rides.

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