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It’s no coincidence that
is now offering the
and
the
options — both are rooted in consumers’ willingness to risk a little convenience — and shoe leather — for a more affordable ride. And the offerings take a page from the successful startup
, which is trying to muscle into territory the two Big Guns have had mostly to themselves.
With both Shared Saver, debuting in February, and
Pool (which launched first, last June), riders share the car and have to walk (at most, a few blocks) to a designated pickup point, and get dropped off similarly short of their destination. Both Express Pool and Shared Saver can be half the price of the next-cheapest rides.
Shared Saver is only for parties of one or two (no groups), and it doesn’t allow for stop-offs along the way to your destination. Lyft says pickup locations will never be more than a five-minute walk. Drivers, however, will only wait one minute. It’s initially offered only in Denver, Colo., and San Jose, Calif. (with more cities coming). So if you use it, you’d really better know the way to San Jose, or at least the way around its streets.
Uber’s Express Pool isn’t available everywhere; in fact, it’s in fewer cities than Uber Pool. Check the app. Pickups and drop-offs are at designated express spots. Uber cautions that riders will wait a bit longer for their car to arrive — because the driver will be looking for other fares en route. And as with Shared Saver you have only a minute (compared to two minutes for more expensive Uber rides) to cancel before being charged a $5 fee. Express drivers also have to wait only two minutes before declaring you a no-show.
Discount Via rides are also typically shared with others, and pickup points are nearby corners. But in New York City, Via also has more expensive Private and Express services that give you a car to yourself.
Harry Campbell, founder of
and author of “The Rideshare Guide,” told
Autoblog
, “Via has mastered the low-cost sharing market, and Uber Express Pool and Lyft Shared Saver definitely seem to be a direct response to Via’s offering. Over the years, ridesharing services like Uber and Lyft have done everything they can to lower the cost of the ride — it’s now cheaper than ever to take a rideshare. But there’s only so little you can pay the driver, and the nice thing about shared rides is that you can effectively charge passengers less and maintain a similar level of pay for drivers.”
But Sam Abuelsamid, principal analyst with Navigant Research, told
Autoblog
that there’s more going on here than “if you can’t beat ’em, join ’em.” Transportation network companies (TNC) like Uber and Lyft really, really need to keep their drivers happy, he said, because they spend huge amounts of money recruiting them and incentivizing them to stay.
Meanwhile, riders hit with an expensive ride option because of surge pricing will have a choice that doesn’t involve the dreaded — and easy — shift to another TNC. And drivers get more utilization.
Abuelsamid says, “Adding different service options like ride pooling in addition to the traditional taxi-like service provides riders with options that might better fit their budget, making them more likely to use the service, and increases the likelihood that drivers will have paying passengers more of the time. That increases the probability that the driver will stay with the service. At the same time, it increases the revenue opportunities for the TNC. The same reasoning is behind the addition of services like food delivery (Uber Eats) — more utilization.”
The so-called “network effect” posits that the bigger the network is, the more valuable it becomes. “The network effect is with the drivers,” Abuelsamid said. “The more drivers a company has on duty, the shorter the wait times for passengers. The problem is drivers only get paid when they have passengers. If there are too many drivers and not enough passengers, the drivers are more likely to give up and do something else when they are underutilized.”
Smith adds, “Uber has said it’s still losing lots of money on Uber Pool but it’s one of the best ways they can continue to spur demand. So I expect to see both Uber and Lyft continue to innovate in the shared-ride segment and nudge more and more passengers towards options like Express Pool and Shared Saver.”
Via, founded in 2012, has made cheaper shared rides the cornerstone of its service, and it’s been quite effective raising funds — $387 million, according to one count. The company was started by two Israelis, Daniel Ramot and Oren Shoval. Daimler will invest as much $250 million, starting in 2017. Via is currently operating in New York, Chicago, Washington, D.C., Arlington, Texas and West Sacramento. Scooters could also be offered.
Via drivers have decent incentives to pick up more passengers for shared rides, a 10 to 20 percent boost in pay. According to TheRideShareGuy.com, Via also takes a smaller percentage of the driver’s fare, five to 10 percent compared to 25 to 40 percent for Lyft or Uber. That makes drivers happier. But Via operates in dense city centers, and it can get expensive in high-demand places where its surge-like Rocket Rates are in effect.
Via technology is also in place in Europe, through partnerships in Paris (with Keolis), UK (Arriva UK Bus) and Amsterdam. The Daimler investment led to ViaVan, to operate 300 vehicles in Berlin. Other target markets include New Zealand,
and Singapore.
It’s unlikely that Via will put Uber and Lyft down for the count, but it’s growing fast and seems to be providing viable competition. And cheaper fares and more options benefit everyone, drivers and passengers alike.
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