The Rideshare Explosion: Ending the Taxi Cab Monopoly

You were taught as a child never to accept rides from strangers, but today, there are  pre-screened strangers rolling around American cities who are looking to replace taxi cabs as the dominant form of urban transportation for those who need vehicles for hire. 

This is in part due to ridesharing startup Zimride's latest product, Lyft, an iPhone and Android app that bills itself as your "friend with a car on demand."

The Lyft app makes finding a ride easier than hailing a taxi cab on the street. After determining your location from your smartphone, with one tap it is possible to hail a background-checked driver who's already in close proximity to you. At the end of the ride, you are asked to give the person a "suggested donation" based on how far you have traveled.

San Franciscans, who have become the de-facto testers of this product, seem to be loving it. Zimride's Erin Simpson says, "After 12 weeks of operation we're doing hundreds of rides a day on the platform. We have a very enthusiastic user community and we've seen an 80% repeat rate of users, with 55% using Lyft on a weekly basis."

Zimride co-founder and Chief Operating Officer John Zimmer adds, "We launched Zimride to solve the problem that 80% of seats on our highways are empty. Our goal is to provide a more affordable, efficient and social forms of transportation. Over the past five years, we've saved our community $100 million in driving expenses."

In August, Zimride announced 200 million miles shared on the Zimride platform in five years since the company was founded. Zimride has over 360,000 users across the U.S., and 125 corporate and university campuses pay for private transportation platforms (including the University of California campuses, USC, Stanford, and Cornell) and companies (like Facebook, Esurance, and Intuit).

Across the pond, London-based goCarShare also connects drivers and paying passengers so that they can travel together, share car journeys and save money.

The company's founder, Drummond Gilbert, says, "In the last few years fuel prices have increased significantly, while at the same time many urban areas are suffering from severe congestion. goCarShare taps into under-utilized capacity by matching drivers and passengers, reducing the cost of the journey for everyone. When there aren't public funds to invest in new infrastructure, it makes particular sense to focus on using existing assets more effectively."

From the beginning, goCarShare has focused on instilling trust in its users through deep Facebook integration, so its users can see if they share friends, have a similar taste in music, and more. (It also uses an eBay style rating system to ensure safety and reliability.)

Other companies providing interesting innovations in this growing space include Getaround, which enables people to let their personal cars be driven by others while they're not using them, and Uber, which uses mobile technologies to connect town car drivers who lack passengers with people nearby who are looking for rides.

However, there has already been legal pushback from taxi unions and government regulators, so stay tuned as the battle of traditional vs. new transportation models continues to evolve, while being scrutinized simultaneously.