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Wednesday, February 25, 2015

What are Ridesharing Services?

Ridesharing services are taking the transportation industry by storm, redefining the traditional taxi model to improve ride efficiency and accountability. Millions of people have requested rides via smartphones across the globe, and many more are ready to join this ridesharing movement. Uber, Lyft, and Sidecar launched their app-based platforms in San Francisco, California. Nevertheless, this startup-based city spread ride-sharing app influence across the globe. What are ride-sharing services? 

Ridesharing services are rideshare apps designed to connect a rider and a driver under a specific ride platform. Once a ride request is sent out, the closest driver has 20 seconds to accept this ride. If the closest driver doesn't accept this ride, it is kicked out to another willing driver. However, at times there are a short supply of drivers and the same ride request will keep reaching the same driver. 

No cash is ever exchanged for rides because these ridesharing apps are based on a cashless system using stored credit card information to cover the cost of trips. These trips are calculated based on the following fees and formulas: base charge, per minute, per mile, safe ride fee, tolls (if traveling across toll bridges), airport tolls (charged to rider), surge pricing (Uber - multiples ride cost due to high demand in regions - price varies), Prime Time (Lyft charges demand prices and 50% goes to driver as tip), and Sidecar marketplace (drivers can control price structure up to 5X). 

Uber, Lyft and Sidecar are recognized as innovative technological transportation leaders. Nevertheless, Uber is surging ahead of the competition with their black car service, UberSUV, UberXL, UberTaxi and UberX (basic ridesharing similar to Lyft and Sidecar) and UberPool (carpool service) services. Uber functions as a technology-based company who designed a ride platform to connect riders with drivers on smartphone devices. UberX is a ride-sharing division of Uber, where private car owners use Uber phones, as well as personal phones, to locate on-demand rides in Uber cities across the world. 

Lyft is viewed as a trendy ride-sharing company who takes pride in their pink mustache and fist-bumps. The pink mustache is recognized in dozens of cities across America. It is a ride-sharing service most known in San Francisco and Los Angeles. Lyft represents the prime competitor to Uber's UberX ride-sharing platform. Lyft conducts a background on drivers interested in earning money driving for their ride-sharing company. Whereas ridesharing drivers are viewed as independent contractors, they are not affiliated with Lyft. According to a Lyft driver manager, drivers and passengers are viewed as individuals who uses their app technology and nothing else. These people are unaffiliated with Lyft, which is probably a company policy to avoid benefits and liabilities. 

Sidecar is a ride-sharing company that also launched in San Francisco. This ride-sharing app uses a state-of-the-art technology to quote rides ahead of pickups, so that all passengers know exactly what they will pay before accepting a ride. The cost of these rides will never change, unless the rider requests to visit multiple locations within Point A & B and/or changes their final destination. If these revisions are made, the app will request the driver to acknowledge the changes once the ride ends. Sidecar is extremely simple to use. All features are integrated on one interface, giving the driver quick access to cool features. 

Uber, Lyft and Sidecar charge drivers who use their app a 20% commission. Uber and Lyft pay their drivers via direct deposit every Thursday morning. On some rare occasions, Lyft pays out Wednesday morning, but drivers shouldn't count on early direct deposits to avoid personal bank and bill issues. Lyft sends out daily driver summaries to keep drivers in the loop. Uber enables their drivers to monitor trip activity and earnings in real-time. 

Sidecar shows previous rides pending on their driver app. These trip payments must go through a credit processing of 4-5 days. In recent time, funds are becoming available in the late hours of the 4th night. Once these funds are available, Sidecar changes a $.50 transaction fee per payout request. These ride funds are then disbursed into an approved bank account. The rule of thumb is to wait until the fares add up and process larger amounts. Then, drivers can request one bigger amount to save on transaction fees. Sidecar shows exact ride earnings of past rides minus commission. When a ride request arrives, the fare price is shown without commission. The final payment per trip is minus the standard 20% commission, which can be viewed in the ride history. 

Ride-sharing has sparked criticism from the taxi industry. Recent policy debates have raised awareness that ride-sharing drivers must follow the same standards as taxi drivers. However, ride-sharing drivers are not taxi and cab drivers. They don't drive around searching for fares or are allowed to swoop in on passengers standing on street corners, at hotels, in front of bars and at clubs. If riders don't have access to the exact ride app and don't request a ride on this ride platform, rideshare drivers are prohibited from legally driving them. There are strict requirements to perform all operations within the scope of the TNC rules, or else the California Public Utilities Commission may issue citations and or drivers can be reported to the proper authorities in their ensuing states and international cities

Ridesharing services allow personal vehicle owners to accept rides in an approved area. Recently, Uber has expanded their coverage for local California drivers to drive anywhere in the state. This policy change is a step above Lyft and Sidecar, who require their drivers to stay within specific regions. Lyft drivers are permitted to travel 60 miles out of their approved region. If and when Lyft drivers are take outside of their approved area, they can pick up passengers or go on airplane mode back to their service region. Lyft may have revised their policies to expand driver coverage. 

Ridesharing drivers can earn $20-$60 an hour transporting people. It depends on a number of factors, such as city, good connection with faster pickup times, riders being present and not delaying trips, events, and longer trips where time and mileage are accrued to increase efficiency. The main drawbacks of sharing are fluctuating gas prices, maintenance costs, commission, taxes, taxi harassment, disrespectful passengers, and potential accidents. 

Prospective drivers fear ridesharing because they have no idea the type of people riding in their vehicles. Nevertheless, both drivers and passengers are accountable for their actions. All drivers must undergo a background check. Furthermore, drivers and riders rate one another through a star rating system that shows credibility within the local ride community. 

Ridesharing services are on the brink of taking over major transportation services in many cities This is part of the reason that taxi drivers are aggressively opposing ridesharing, which they claim is siphoning 50% of their earnings. For the most part, ridesharing app users choose to use Uber, Lyft and Sidecar, similar to people selecting their favorite stores. For the most part, cities running public transportation services are not complaining about this new ridesharing innovation. They know riders customize their trips to use both ridesharing and city transit services.

But aside from these complaints, taxi drivers may view relaxed regulations against ridesharing as a disadvantage because the law requires them to have commercial insurance, undergo taxi school training, get licensed, lease medallions, and follow other strict requirements. Nonetheless, taxis overlook their advantage in guaranteed fares available at hotels, at airports, at bars, at restaurants, and via dispatch. They can also use the Flywheel ride app, as well. 

In retrospect, ridesharing services are filling-in the seeping hole the taxi industry created with their poor service. Passengers now have the freedom to choose ridesharing services rather than accept taxis and cabs as their primary mode of transportation. Innovation will always win the battle against tradition. Cashless transportation is changing the dynamics in how people pay for rides. Passengers enjoy the flexibility of monitoring their driver's location on a smartphone screen. Moreover, riders are given flexibility to coordinate pickups. This gives most riders time to walk outside a bar, restaurant or to leave their home. Ridesharing services are here to stay! 

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