Carpool on Demand: Ad-Hoc vs. App Battles

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2Q 2017 | IN-4477

Mobility as a Service (MaaS) technology leaders Uber, Lyft, and Waze, despite huge financial investments, have been unable to win over some commuters in key urban areas like San Francisco, Washington D.C., and Houston. The hold-outs have adopted much older, no-to-low tech solutions like Casual Carpool (with an estimated 6,000 passengers daily), RideFlag, and some now-defunct solutions. RideFlag plans to extend its offerings with real-time scheduling soon and Waze is countering with a proprietary carpooling app.

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MaaS Leaders Fail to Win Over Carpoolers

NEWS


Mobility as a Service (MaaS) technology leaders Uber, Lyft, and Waze, despite huge financial investments, have been unable to win over some commuters in key urban areas like San Francisco, Washington D.C., and Houston. The hold-outs have adopted much older, no-to-low tech solutions like Casual Carpool (with an estimated 6,000 passengers daily), RideFlag, and some now-defunct solutions. RideFlag plans to extend its offerings with real-time scheduling soon and Waze is countering with a proprietary carpooling app.

The old-school solutions pair strangers, often for short-one way rides, to allow for utilization of the carpool lane and reduced toll fees. The Bay Bridge, for example, requires at least two passengers with a driver.  

Benefits Abound for Drivers

IMPACT


Companies like RideFlag allow drivers to set the price for a ride, which can be adjusted per occurrence. The mobile app determines best matches and shows the choices available, not unlike Uber or Lyft. The company screens each driver in advance and tracks rides through GPS. The focus is on environmental and social consciousness. The site also has a value calculator, which attests to US$3,750 annual savings for a 20-mile daily commute, along with greenhouse gas savings of 3,918 pounds and a US$1.93 cost per mile. RideFlag launched in two Florida cities last year and expects to soon reach 10 cities in North America, including Toronto, Vancouver, Washington D.C., New York, Los Angeles, and Charlotte, NC. They have plans to expand internationally in Europe, Asia, and Australia.  

Casual Carpool has become an institution in the East Bay of California over its past nearly 20 years of operation, with drop-off points often near downtown San Francisco. RideNow.org maintains locations, news, and discussion boards. The expected US$1 fee to ride across the Bay Bridge is a major cost-and-time saving. ABI Research estimates that utilizing the carpool lane across the bridge will save about US$220 month in toll fees (vs. US$6 rush hour toll per way), up to 20 hours of time per month (30 minutes each way x 20 working days), and at least 10 gallons of fuel per month (based on span of bridge, average MPG).  Additionally, BART services per month from Oakland to San Francisco can add up to $400 per month. 

The average wait times for first-come, first-served Casual Carpool are 2.5 minutes. The company does not, however, have the same ratings opportunity as Uber and Lyft, instead leading disgruntled passengers to social media and the RideNow message boards. The most challenging for passengers, however, at least in the California Bay Area, is the largely one way trip and greatly reduced last-mile delivery.

Both uberPOOL, which may accept more passengers and costs around US$3-$10, with its current focus on Manhattan and Waze Carpool (currently in the pilot stage exclusively in the Bay Area), which offers dual direction but no carpool lane (limited to one rider), are trying to win over commuters and fight for share along with upstarts like RideFlag.  

Multimodal and New Models Emerging

COMMENTARY


Some of the challenges with Casual Carpool, and potentially RideFlag, should be addressed with developing multimodal transport apps that combine mass transit with single-transit (e-bikes, scooters etc.) and shared transit to optimize routing, cost, and flexibility.

Additional efforts are imminent from automotive OEMs like GM’s Maven car sharing service and Ford’s Chariot in San Francisco.  Perennially congested LA, where per INRIX, drivers spent "an average of 104 hours stuck in traffic jams last year, or about 12.7 percent of their total drive time" is planning to invest heavily in infrastructure improvements. The boldest of potential moves comes from talks of underground tunnels in LA, courtesy of big thinker Elon Musk.

Issues include competition within an app, currently out of bounds for services such as Uber and Lyft. As increasingly smarter cities grow beyond the Bay Area to Columbus, OH to Austin, TX and beyond, seamless and evolving solutions will improve real-time options that benefit both drivers and passengers, further led by autonomy and electrification.

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