Astute readers of this blog will recall that I am not really a big fan of Uber. I’ve never really jumped head over heels for their business model, but I am especially not sympathetic to how flagrantly they violate the rules set in place by municipalities and just presumptuously operate as they see fit. Of course, as I have been reminded many times, all ride-sharing organizations should not be painted by the same broad brush, and that is readily apparent in the distinction between Uber and Lyft.
The Houston Chronicle reports that Lyft will be commencing operation tomorrow in Houston. The key distinction between Uber and Lyft is that, while the former operates much in the same way as a taxi, Lyft tries to operate far more as a ride-sharing organization that features regular people in regular cars. I should note that does not mean I do not similarly have some concerns about the organization, but it is important to note the differences.
However, there are similarities, particularly with the Taxi industry. While Lyft says it is all about donations, at the end of the day it revolves around a business model of rides for money. According to City ordinance, that is called Taxi service. Accordingly, unless they abide by the countless (albeit, sometimes byzantine) regulations facing the taxi industry, they are breaking the law.
Lyft originally wanted to begin its operation fully, arguing that current regulations allow the allegedly “voluntary” and “donation-based” service to operate fully within the boundaries of the law.
This argument was not supported by Mayor Parker, who evidently compared the argument to the world’s oldest profession. “There are some working girls that work the streets of Houston who say, ‘We’re legal because it is just a donation.’ I’m sorry, we will enforce our ordinances,” Parker said.
Following this promise to prosecute alleged violations of the Taxi ordinances, Lyft announced they would not accept those “donations” for an undetermined amount of time. I suppose this makes them some sort of charity service, which for now is sort of cool. Obviously, this is an incredibly unsustainable business model, and will require ordinances to be changed to continue its operation.
As has been my policy for over a year, I do not comment on these moot, theoretical issues. When Lyft proposes specific reforms, I’ll have more.