Despite these frustrations, the departure of Uber and Lyft could actually produce better options for the roughly 10,000 drivers in Austin, as well as their passengers. Uber and Lyft dominate the ridesharing market in many cities, and what’s called the network effect—the idea that a platform or service becomes more useful as its number of users increases—makes it hard for smaller players to compete with them. For that reason, Uber and Lyft’s disappearance from Austin’s market is opening up opportunities for alternative ridesharing arrangements that might not otherwise have a shot.
Uber and Lyft’s duopoly in most markets means they can (and do) act more or less as they please. The companies drop fares, impose driver-unfriendly rules like cross-dispatching, and change policies with little fear of losing drivers or riders. (In some smaller ways, their rivalry has actually helped drivers, according to Harry Campbell, the creator of The Rideshare Guy, a blog that provides information to the industry’s drivers. For instance, Uber handles a much higher volume of rides than Lyft, but it has adopted some of Lyft’s more driver-friendly policies, like its Express Pay option, which allows drivers to cash out whenever they want, as long as they’ve earned at least $50.)
In just over a month since the election in Austin, smaller rideshare startups, including Fare, Fasten, Get Me, and Wingz, have attempted to fill the void left by Uber and Lyft. “Competition in the market helps drivers,” says Daniel Hamermesh, a professor emeritus of economics at University of Texas at Austin. For instance, when Uber and Lyft were still operating, Wingz initially carved out a niche by offering pre-scheduled airport rides, whose predictability benefits riders and drivers alike. (Uber and Lyft are now rolling out pre-scheduled rides and Wingz has branched out beyond airport rides in Austin). The predictability of pre-scheduled rides benefits riders and drivers alike. “If you [as a driver] can get a couple of pre-scheduled rides, you’re able to schedule your day around that,” Campbell says. When drivers know they’re guaranteed a certain amount of money that day from pre-scheduled, fixed-price rides, they’re less susceptible to the volatility of surge pricing and rider demand. “Logistically and mentally it’s better for drivers,” Campbell says.
One new entrant to the Austin market, Arcade City, has particularly piqued some drivers’ interest. Panas gushes about driving for Arcade City, which started as a Facebook group and now has over 32,000 members, who can offer or request rides and exchange contact details via Facebook. “We’re so busy, we barely have time to sleep and shower because it never stops,” Panas says. “Your previous riders are calling and texting you [for rides].” Arcade City drivers self-organize into teams (or pods, as they’re called), so that drivers can refer passengers to team members when they’re busy.