Angie Palmer Maynard was among the first Lyft drivers in Utah five years ago. Salt Lake City quickly hit her with two $6,500 fines for picking up passengers at the airport without being a licensed taxi driver.
“I was shocked. I was scared. Oh my gosh, it wasn’t just a normal fine" — it was $13,000, she says. Lyft lawyers eventually helped her escape payment.
Maynard at the time was a recent college graduate excited to join Lyft after reading how its innovative technology let people drive in their spare time to earn money. “I wanted to be part of something that would change Utah.”
It has — despite the early hardball tactics aimed at keeping the ride-hailing companies out.
Uber and Lyft have now captured 60% of the ground transportation market at Salt Lake City International Airport, says its executive director Bill Wyatt. “That’s up from, you know, 0% five years ago.”
“We’re growing like a weed,” says Jeremy Neigher, Lyft general manager for its Rockies region.
Now competitors are copying the technology and tactics of Uber and Lyft.
Yellow Cab uses a national ride-hailing app. The Utah Transit Authority and Salt Lake City will do the same, as part of experiments to combine some traditional transit with ride-hailing. Even Park ‘n Jet is using Lyft, not just shuttles, to transport customers to and from the airport.
Uber and Lyft are causing other far-flung disruptions.
• They turned local taxi service into an unregulated Wild West.
• They altered design of the new, under-construction airport.
• They may have hurt TRAX airport service — but perhaps not other competitors.
Arguments persist about whether ride-hailing services are safe and drivers are paid fairly.
“It’s a very disruptive period,” says airport director Wyatt, who by ordinance also oversees rides for hire in the city.
Expanding the market
While Uber and Lyft now claim 60% of airport ground transportation, Wyatt says, “The interesting thing is it has not decreased taxi revenues.”
They have been flat and might have increased hadn’t Uber and Lyft come onto the scene. “But Uber looks to have expanded the marketplace,” Wyatt says.
“People who maybe used to drive to the airport or get dropped off now just take Uber and Lyft,” because they are inexpensive and a strong economy allows more people to afford that convenience, he says.
He adds that he also has not seen revenue drop from car rentals or airport parking.
Liz Wood, president of Park ‘n Jet, said people living nearby may opt for Uber and Lyft. “But so many of our customers are from Utah County, Weber County, Davis County” and beyond “that we haven’t noticed any difference” in business.
An exception may be the light ridership on the $350 million TRAX expansion to the airport. Wyatt says he’s had reports that it carries fewer than 700 riders to and from the airport on some days. He says competition from Uber and Lyft to a downtown just five minutes away may be part of the reason.
“If you are staying at a downtown hotel, it’s $2.50 to ride TRAX. On Uber, it’s $6.50 or $8 and you’re going to get there faster. There’s a lot of [TRAX] stops between downtown and the airport, so that slows the trip.”
Also, TRAX does not run early or late, while the airport is an around-the-clock operation — as are Lyft and Uber. TRAX does not serve many flights on workers’ schedules.
However, UTA spokesman Carl Arky says its data shows TRAX is carrying more people to and from the airport. In July, it averaged 1,814 daily boardings at the airport — up from 1,335 in January. “It is an upward trend for the past couple years, not the downward trend the airport director suggested.”
Changing airport plans
When the new $3.6 billion airport was initially designed — its first phase will open in a year — Uber and Lyft did not exist. Their popularity forced some changes, and more are being considered.
Plans were altered to allot them much more curb space than they currently have, Wyatt said.
He adds the airport is looking at other innovations now being tried at other airports.
For example in Seattle, he said, “you get a little message from Uber and Lyft that says your driver is going to be in slot number 823” in the garage, and they meet in such spaces instead of looking for each other at the curb.
The airport also is reviewing a system at Portland where ride-hailing companies text passengers a number and send them to a line. “When you get to the front of that line, you just show the driver that number and the driver punches in the number and automatically knows where you want to go.”
Wyatt notes that bond-rating companies even asked airport officials if they really need the new 3,600-stall parking garage they are building — or if it will be tough to fill with growth of Uber and Lyft.
He told them, “If all of this disruption takes longer than people expect to get here, we'd end up with this beautiful new airport and no way to get there — and we can't do it.”
Almoh Bahaji arrived in Utah as a refugee from Somalia 17 years ago with $80 in his pocket and started driving cabs. He now owns Yellow Cab Utah, largely because others were fleeing that industry — making the purchase affordable — because of competition by Uber and Lyft.
“Everyone laughed at me” when he decided to buy Yellow Cab, he says. “A friend cried for a half hour,” sure he would lose everything. But Bahaji had the idea of using the same technology that propelled ride-hailing company.
“Uber and Lyft walked into this valley five or six years ago with some great technology and it fundamentally changed the transportation industry. So I’m fighting back with technology,” says Jay Wacker, whom Bahaji hired as Yellow Cab’s manager.
That includes using the Curb smartphone app for taxis. “It is used in 65 major U.S. cities,” Wacker says. Like with Uber and Lyft, it allows getting a cost estimate and scheduling a cab. Unlike them, it also allows paying in cash — not just credit cards.
Yellow also installed a digital dispatch system. It allows hotels, hospitals and others to schedule rides for customers “without calling me on the phone,” Wacker says.
Taxi meters and communication are also on removable electronic tablets. Drivers can take them in restaurants or other places to monitor ride requests in the system. “If it’s busy, they say maybe I better get back out there,” Wacker adds.
Yellow also avoids using airport taxi stands frequented by other cab companies in the city, and uses its own booths near baggage claim where customers may request a taxi.
Uber and Lyft led to deregulation of taxi service and fares in the Salt Lake metro area — allowing some sky-is-the-limit charges and no meters. That happened when the Legislature mandated that Uber and Lyft be allowed at the airport, and the city figured it could no longer fairly limit taxis there either.
Salt Lake City went from three licensed taxi companies — Yellow, Ute and City — to 560 now, and many of them are one-person operations. Wyatt says many small-firm taxi drivers also work for Uber and Lyft. They operate for the ride-hailing companies when expensive price surging is in effect at busy times, or as a cab at hotel or airport stands when conventions create long lines.
“It’s the wild West,” Wacher says.
Taxi drivers for a time could charge whatever they wanted. It led to complaints about gouging, including $200 for rides to Cottonwood Heights or $25 for a two-mile ride to a hotel.
Former airport director Maureen Riley declared the situation an emergency to allow capping fares at $25 for airport taxi rides to destinations west of 500 East, and $30 beyond that within the city limits. The limits are still in effect, and airport signs stress that — and urge people to negotiate taxi fares before leaving.
“Those limits are only for within Salt Lake City. If someone gets in a taxi and they go to Draper, it’s a whole different situation,” Wyatt warned. No limits apply.
Ride-hailing transit and parking
Other forms of transportation are copying Uber and Lyft.
For example, the Utah Transit Authority plans to launch a “microtransit” experiment in the southwestern portion of Salt Lake County. It will let people use an app (or make a phone call) to order a shared ride on a van with others headed the same direction and get estimates for arrival. The cost will be the same as regular bus fare and allow transfers.
UTA Board Chairman Carlton Christensen has said it potentially could solve many of the problems that have decreased transit ridership in Utah and nationally, such as how to get people from transit stops to their final destinations and how to make transit schedules meet personal demands.
Salt Lake City is also working on a microtransit system. And UTA is working on sort of a super app that would allow scheduling and payment — perhaps in a combined trip — for transit, ride-hailing companies, GREENbike or rental scooters.
Neigher, a manager for Lyft, says ride-hailing services naturally complement mass transit.
“We’re finding that people who take Lyft are far more likely to take public transit,” and use the combination to avoid buying a car, or at least a second car, he says. “About 45 percent of Lyft passengers take public transit in Utah at least one time a week.”
But a study by three University of Kentucky researchers estimates that when Uber and Lyft enter a city, they decrease transit rail ridership there by 1.29 percent per year and bus ridership by 1.7 percent.
Meanwhile, Park ‘n Jet is experimenting with a service to offer Lyft rides for customers to the airport, beyond its regular shuttle service. It is offering a section of its property as a staging area for Lyft drivers, making them readily available to take parking customers between other rides.
“We have a lot of business travelers who want instant personalized pickup” without waiting for shuttles to make rounds through large parking lots or make multiple airport stops, says Wood, Park ‘n Jet’s president. “It’s going to be just a new premium service we offer” for a price.
Controversy over driver pay and the safety of Uber and Lyft persist as they grow. (They won’t say how many drivers they have locally, but Lyft says it has nearly 2 million nationwide).
Like other taxi companies, Wacker at Yellow Cab asserts that pay at the ride-hailing companies is poor and they "don’t care that they’ve got a thousand starving drivers in the valley.”
Neigher disputes that. He says 91% of Lyft drivers work fewer than 20 hours a week. He says most do it to supplement other income during spare hours rather than make it a full-time job.
Lyft says its drivers average $30.16 an hour when they are actually driving, and $15.95 an hour when waiting time is included. Drivers have seen a 5% increase in earnings over the past two years, according to the company.
Neigher says Lyft works to help drivers make more money, including telling them when and where business is best and forming partnerships with such things as the Sundance Film Festival and Park ‘n Jet to create more business. It also has a partnership with Hertz to allow drivers who do not own cars to rent one and drive.
Wacker, like other taxi companies, also raises concerns about safety with Uber and Lyft. He says people who fail taxi background checks often go to ride-hailing companies. Neigher says Lyft performs continual background checks and “we take safety incredibly seriously.”
National media have reported that Uber and Lyft have been bleeding money in competition against each other. The companies told investors this month that they plan to raise fares in some areas and cut back on discount coupons and other promotions.
Still, Neigher says Lyft’s popularity is changing America, and he expects it to alter the landscape more.
For example, he says people constantly tell him that because of Lyft, they have chosen not to buy a second car — or even any car at all. Over time, that may lower the demand for parking at businesses and homes — and open up more land for other uses.
“Car ownership is expensive. It’s around $9,000 a year,” Neigher says. “That is a lot of money if your car is parking 96 percent of the time.”
Neigher also foresees ride-hailing companies leading to more environmentally friendly cars. “Gasoline is expensive,” he says, especially when driving for a living. He adds he’s surprised how many Lyft drivers have converted to hybrids.
Maynard, the Lyft driver once hit with $13,000 in fines, says she always believed ride-hailing would become as popular as it now is.
“You look back and wonder why there was so much resistance, and now others are copying them,” she said. “I hope it’s a lesson people can learn when new things come into town — maybe not to resist them so much.”