Do millennials love cars? Bill Gurley of Benchmark Capital, an investor in Uber, emphatically says, No.
In an interview with author Malcolm Gladwell reported on CNN Money, Gurley said that millennials hate cars and love convenience. Bloomberg reports that auto makers say that 27 percent of new-car sales stem from millennials.
Who is right? Both.
If you have to buy a car, you do, but if you can hire a driver, millennials go to Uber or Lyft. These app-based car services have taken off, and millennials are driving the growth. They say the service is excellent, the cars are new and the drivers are punctual and polite. The drivers know where they are going, and so do millennials.
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Unfortunately, the same can’t be said for some Miami-Dade County officials. Last week, the county denied preliminary approval to change the antiquated taxi and limousine laws that impede transportation innovation by companies such as Uber and Lyft. The commission loves transportation monopolies, but residents don’t.
The fact is that millennials and tourists are defying county rules that deny choice in transportation. They contract Uber or Lyft drivers because the service works remarkably well and for less money than a cab ride. They certainly don’t feel bound by the taxi and limousine monopolies that are more generous in campaign contributions to elected officials than they are to their own drivers.
Uber and Lyft are transforming the transportation marketplace. It is all about supply and demand whereby people can choose their driver.
These app-based car companies contract drivers to join the network, not unlike a franchise. Although contracted by these companies, the drivers are entrepreneurs who essentially work for themselves.
Good performance gets rewarded by a rating system whereby customers rate every driving experience.
The best ranked drivers get the most customer requests for service. With a cab, you don’t have a choice — whatever shows up at your door is what you get; both good and bad service reap the same outcomes. There is no incentive to improve. But that’s not the case with with Uber and Lyft; they are transformational.
Drivers also rate customers; rude or unruly passengers will get a low rating, and drivers are not obligated to pick them up. The system provides incentives for best behavior from both sides of the deal.
It is that simple. Competition is key. These app-based companies generally offer lower rates than cabs, creating an efficient market. The taxi industry, however, is based on a monopoly and most of the cab fare, which is higher, goes toward the monopoly and not to the drivers. Why not have choices?
Frequent riders of Uber and Lyft say that the service offers a better experience because the people who pick you up are entrepreneurs and are proud to be part of that network.
There is almost a sense of community between the drivers and the customers they serve. These companies are breaking down old systems that have failed to improve, whether dysfunctional Miami-Dade government recognizes it or not. The fact that people use Uber or Lyft tells you something.
Driving in Miami-Dade is neither fun nor inexpensive. The monthly cost of a car, gasoline, insurance, tolls and parking is enough to make a healthy heart miss a beat or two. For some, Uber and Lyft are less expensive, but for most it’s just convenient. People who are partying use these services so that they don’t drive tipsy. Parents advise their kids to do the same — better safe than sorry.
So why does the county fight better service, innovation and entrepreneurship? They will tell you that the rules are designed to protect customers, but that is not true. The rules protect monopolies that behave poorly. Lower cost, better service and efficiency must seem anathema to the majority on the commission. That says a lot, too.
Thankfully, there is a voice of reason coming from the dais, Commissioner Esteban “Steve” Bovo, chair of the transportation committee, supports competition, as does County Mayor Carlos Gimenez, who has one of these apps on his phone for when he travels outside of Miami-Dade. It’s smart.
Let’s face it: Miami-Dade is never going to have decent public transportation. The decision was made that this was going to be a county of cars. So let people sit in the car they want. They are doing it anyway.