The return of Uber and Lyft to Austin has put the city’s only ride-hailing nonprofit in a fight for survival.
RideAustin, one of several small companies that started operations in Austin after the ride-hailing giants left the city in May 2016, is now seeing its ridership cut in half since the two returned to town. The company is slashing expenses and cutting staff, said CEO Andy Tryba.
“We always knew that at some point Uber and Lyft were going to come back. So we’ve always prepared for it,” Tryba said in an interview with The Texas Tribune, adding that RideAustin expected a big drop in rides — but didn’t think it would happen so fast.
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RideAustin, which began operating in June 2016, was notable as the first ride-hailing company to run on a nonprofit model that promised better pay for drivers and allowed riders to donate to local charities through the app. It’s seen ridership steadily increase over the past year — which spiked to more than 110,000 weekly rides during the South by Southwest festival.
But RideAustin’s fortunes turned during the Legislature’s 85th regular session this year, when lawmakers passed a statewide regulatory framework for ride-hailing companies that supersedes local ordinances — including Austin’s. Gov. Greg Abbott signed it into law on May 29, and Uber and Lyft returned to Austin the same day.
The drop in ridership for RideAustin was swift and dramatic: last week, the company provided 22,000 rides — less than half of the 59,000 rides it operated in the week before Uber and Lyft returned. Tryba attributed part of the loss to UT-Austin students leaving town for the summer, but he also acknowledged that a large share of rides was recaptured by Uber and Lyft.
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RideAustin is working to avoid the same fate as Fare, a Phoenix-based ride-hailing company that shut down operations in Austin just a week after Uber and Lyft’s return. In an email to customers, the company said it couldn’t “endure the recent loss of business.” Other ride-hailing services that had started operating in the initial vacuum have also gone out of business over the past year.
The city’s ride-hailing market changed significantly after Uber and Lyft left. Researchers from the University of Michigan, Texas A&M and other universities conducted a study about how Uber and Lyft’s departure changed riders’ behavior in Austin. They found that only 40 percent of respondents transitioned from Uber or Lyft to other ride-hailing companies, while 60 percent started making similar trips using other transportation, like biking, walking or driving a personal vehicle.
Chris Simek, a researcher at the Texas A&M University Transportation Institute that authored the study, said that among those who chose another service, “about half reported using RideAustin most often to make that type of trip. About a third reported using Fasten most often, and about one in 10 reported using Fare most often.”
Simek said the research team plans to do a follow-up study to analyze the market now that Uber and Lyft are back.
See here and here for some background. I had hope that the Uber-less Austin model of multiple firms actually competing to be better or at least different than each other would successfully fill the void, but either there wasn’t enough time for people to adjust or they just liked Uber and Lyft too much. That survey suggests there was something to the latter point. Be that as it may, I hope RideAustin can hold on and develop into something that could be replicated elsewhere. Anything that provides a better way for the drivers to earn a living is worth having.
Cities like Houston ,San Antonio, Galveston ,Austin should have been asked by the governor to completely abolish limit entry on taxi cabs ( also known as a “taxi medallion”) and converted to open entry like the rest of the United States ,then cities need to lower the taxi rates 5 to 10% lower than uber/lyft rates,and then “Taxi” will live on,if not done this way,taxi will end and app rates will skyrocket in price with no competition,if Houston had a Mayor That actually wanted to move Houston forward instead of just use the term as a campaign slogan then maybe Turner would have put some innovation in the game,instead he continues to lead Houston with a vision to nowhere in hired transportation. end the limits of entry for taxi cabs,lower the metered price 5 to 10% lower than the app rates and like magic ,it’s game on- Again.