Ride-sharing out in full force for New Year's Eve festivities
January 3, 2016 12:00 AM
Prices surged for some ride-sharing customers on New Year's Eve, largely depending on the time and place. One receipt shows a surge of 5.6 times the normal amount from the Strip District to Regent Square. The other receipt shows no surge from Dormont to South Park.
By Daniel Moore / Pittsburgh Post-Gazette
As a holiday increasingly defined by the success and failure of ride-share companies to get revelers around the city safely, New Year’s Eve in Pittsburgh overall seemed to run smoothly — though with some price hikes that many customers have come to expect.
In its second New Year’s in the Steel City, Uber Technologies Inc. and Lyft Inc. jetted thousands of people into and out of the bacchanalia that consumed the South Side, Downtown and Oakland, as well as more low-key areas like Dormont and the Strip District.
The ride-sharing companies have emerged in recent years in scores of cities in the U.S. and around the world, as more riders become attracted to the convenience of requesting pickups via a smartphone app from drivers in their own vehicles.
Yellow Cab of Pittsburgh’s zTrip, the app-based ride-sharing service officially launched in March 2015 as the traditional taxi company’s answer to Uber and Lyft, facilitated hundreds of trips locally in its New Year’s Eve debut.
One of the central indicators of performance — and chief among riders’ concerns — is real-time pricing known as “dynamic” or “surge” pricing, used by both Uber and Lyft. The fares increase in real-time with demand for rides in specific areas, with the belief that higher rates encourage more drivers to hit the road. The companies have faced criticism for such pricing during big holidays and events, including last New Year’s Eve in Pittsburgh, when one rider was charged $121 for a 5-mile ride around 1 a.m. — nearly nine times the normal amount.
Uber reported on its blog on Saturday that 60 percent of all U.S. trips were priced at regular levels on New Year’s Eve, and that 84 percent of fares were under a surge of three times. Demand for rides on New Year’s Eve increased by 250 percent between 12:01 a.m. and 12:30 a.m., up from 180 percent from last year. The peak volume of drop-offs reached 165 trips per second, up dramatically from 85 trips per second the year before.
Uber had tried to get ahead of the criticism, publishing a New Year’s Eve ride guide on Dec. 21 that explained the price hikes and recommended calling a ride early in the night and immediately after midnight to avoid the highest fares. It also said riders will see a notification in the app whenever there is surge pricing.
“Surge Pricing shouldn’t be a surprise,” it told riders. “Let’s toast to you running a Fare Estimate in the app before you ride.”
Spokespeople from both Uber and Lyft would not discuss specific local information such as number of trips, number of drivers, demand for rides or price surges from the night.
Pricing in Pittsburgh on Thursday night and early Friday morning largely depended on where and when riders called cars.
Angela Doyle took an Uber with a group of friends from her home in South Park to a friend’s house in Dormont, a roughly 10-miletrip. The 22-minute ride from South Park at 8:30 p.m. totaled $19.77 — and she paid $4.77 after applying a $15 credit she received when one of her friends downloaded the app at her recommendation.
When she called an Uber at 1:45 a.m. for a ride back home, the driver arrived in half the time and the fare was almost identical: $19.87. No surge multipliers were added either way.
“We were anticipating [the ride back] being almost double what it was to go down there, but it wasn’t,” Ms. Doyle said, adding that “the first car also provided waters and snacks in the car, which was a nice bonus.”
Matthew Bonanti wasn’t so lucky. He was shocked when he looked at his receipt the morning after to find that his 5.6-mile, 18-minute trip from Altar Bar in the Strip District to Regent Square clocked in at $80.73. He had accepted surge pricing at 1:35 a.m. of 5.6 times the normal amount, which would have been $14.13.
Mr. Bonanti said he was familiar with surge pricing and used ride-sharing apps on busy days before. “I’ve come across $30, maybe $40 dollars, and that’s what I was expecting,” he said. In hindsight, he said, he would’ve scheduled a pickup from a friend or a taxi cab, though he acknowledged all his friends were out themselves.
Frustration with surge pricing is where Yellow Cab, which had 191 traditional taxi cabs and 61 zTrip drivers on the road, hopes to chip away market share from the ride-sharing behemoths. Company president Jamie Campolongo explained two distinguishing aspects of zTrip: no surge pricing and the ability to schedule a ride hours or days in advance.
Yellow Cab’s more than 100 independent contractors signed up with zTrip complement the traditional taxi cab drivers that still make up the majority of its business. The app-based drivers fill in when taxi cabs get busy, Mr. Campolongo said
“We don’t have to lure our drivers out” with high pricing, he said. “We have almost guaranteed trips in the system every day.”
Mr. Campolongo said cab companies in other cities, which have protested Uber and Lyft as unfair competition, viewed him as a “traitor” for launching an app-based service; now, he gets constant messages from them about how to launch their own.
“It’s a different business now, and you have to be flexible,” he said.
On New Year’s Eve 2014, Yellow Cab taxi drivers gave 3,062 rides in Pittsburgh, Mr. Campolongo said. This year, those cab drivers gave 2,463 rides — but zTrip drivers nearly made up that difference by giving 447 rides, he said.
“We have more ways to get customers now that we didn’t have a year ago,” he said. “We’re kind of over the Uber effect. They came in, and yeah they were disruptive, but we figured out a way for our business to come back. ... As bad as it was for us, it actually ended up being a wake-up call. I think you’ll see a wave of cab companies waking up.”
Uber and Lyft, both based in San Francisco, expanded into Pittsburgh in early 2014 and stoked regulatory battles with the Public Utility Commission, which regulates public transportation companies like Yellow Cab. Uber promoted its launch in February 2014 with a blog post featuring Steelers’ defensive end Cam Heyward, who it said took the first ride in the city.
Both companies are now operating here under experimental, temporary licenses from the PUC, with permanent licenses pending before the commission. In November, PUC law judges recommended the commission fine Uber $50 million — its largest recommended fine ever — for violations stemming from the six months in 2014 the company’s allowed drivers to give rides in the Pittsburgh area without commission approval.
In July, Lyft agreed to pay $250,000 in a settlement with the PUC regarding similar violations.
Daniel Moore: firstname.lastname@example.org, 412-263-2743 and Twitter @PGdanielmoore.
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