Uber, Lyft Win as San Francisco Strike Strands Commuters

Justin Sullivan/Getty Images, courtesy

Pay gates sit empty at the North Berkeley Bay Area Rapid Transit (BART) station July 1, 2013 in Berkeley, California.

The San Francisco transit strike, which is forcing hundreds of thousands of commuters to stay at home or brave clogged roads, is turning into a boon for the on-demand ride industry rooted in the Bay Area’s startup scene.

Uber Technologies Inc. had 50 percent more cars on the road yesterday than a week earlier, while Side.Cr LLC’s Sidecar service saw a 40 percent jump in rides, the companies said. Flywheel Software Inc. was headed for a record Monday after telling drivers the previous evening to prepare for the impending shutdown of the Bay Area Rapid Transit system, known as BART.

Whether adding mobile technology to cabs, creating connected fleets of luxury vehicles or turning freelancers and part-time workers into private drivers, a slew of local Internet startups have raised more than $100 million in venture funding to breathe life into the taxi and car-ride market. The BART strike, which disrupted about 400,000 daily commuters, may be their biggest test yet as a public transit replacement, rather than just an alternative to taxis.

“I hope like everybody that the BART strike will pass as soon as possible, but as long as it’s on I think we’ll continue to have strong days,” said Steven Humphreys, chief executive officer of Flywheel, which has offices in San Francisco and Redwood City, California. Flywheel provides more than half the city’s cabs with a mobile application that lets consumers hail and pay for rides using smartphones.

Collaborative Consumption

The companies are part of a broader shift toward collaborative consumption, where people lend their belongings, services or space to consumers or businesses, using technology to connect and manage buying and selling. Airbnb Inc. lets users rent out a spare bedroom or couch; ODesk Corp. connects employers with freelancers; and TaskRabbit Inc. lets people find odd jobs such as cleaning a garage or waiting in line.

“Cities are becoming denser, and people now have mobile and social technology to connect those that have needs with those that have surplus,” said Jeremiah Owyang, an analyst at Altimeter Group LLC in San Mateo, California. He published a report earlier this month titled, “The Collaborative Economy.”

The BART strike is the system’s first since a six-day shutdown in 1997, and follows the expiration of agreements that were reached in 2009. BART, which employs about 3,250 people, is providing round-trip bus service from various locations in the East Bay as well as additional ferries. Still, commute times over the Bay Bridge yesterday morning were three times longer than normal, according to traffic data provider Inrix Inc.

Traffic Flow

Lyft Inc., with its signature pink-mustachioed cars, is asking drivers to work more during the strike, as is competitor Sidecar. The companies, both of which started in San Francisco, provide mobile applications that let car owners turn their vehicles into autos for hire on a donation basis. During the strike, they said they won’t take their 20 percent commission on rides, letting drivers keep all of the money.

“We spent all weekend long making sure the infrastructure was ready and communicating to drivers that there’s going to be a lot of people stranded, needing rides,” Nick Allen, co-founder of Sidecar, said in an interview yesterday on “Bloomberg West.” “We said, ‘You guys are going to keep 100 percent of the donations on the platform.’”

Uber, the private-driver service that operates fleets in almost 40 markets around the world, e-mailed Bay Area drivers mentioning the possibility of “surge pricing,” which charges customers more during high-demand periods, said Nairi Hourdajian, a spokeswoman for the company. The increase didn’t kick in because the added number of cars met demand, she said.

Corporate Demand

“We sent messages to all drivers in the Bay Area warning them about the situation and urging them to get out on the roads and drive,” Hourdajian said.

Technology companies aren’t the only ones that stand to benefit. Bauer’s Intelligent Transportation Inc., a provider of corporate buses, shuttles and limousines, has been fielding dozens of requests from San Francisco companies seeking travel options to and from the East Bay, according to CEO Gary Bauer.

Bauer’s provided services to about 30 companies yesterday that had made plans in anticipation of the strike. For about $800 a day, companies can secure shuttles seating 15 to 24 employees, and Bauer said he’s been e-mailing corporate clients to tell them he has plenty of capacity.

“We can definitely help out,” he said. “We don’t want to leave them in the lurch.”

A lucky few residents will get to escape the afternoon rush by air. Avego Ltd., a service whose technology matches riders with transportation operators, isn’t just providing additional buses during the strike. Through a lottery on its website, Avego will also pick up four stranded commuters a day via helicopter and fly them home.

“All you need to do is book a trip from San Francisco to wherever you’re going home for tonight or every day this week there’s a strike,” Paul Steinberg, director of Americas for Avego, said in an interview on “Bloomberg West.” “We’ll randomly pick a couple of lucky commuters to fly you home from City Hall.”

Justin Sullivan/Getty Images  Pay gates sit empty at the North Berkeley Bay Area Rapid Transit (BART) station July 1, 2013 in Berkeley, California.

Justin Sullivan/Getty Images
Pay gates sit empty at the North Berkeley Bay Area Rapid Transit (BART) station July 1, 2013 in Berkeley, California.


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