Lyft Promises to Come to Houston if the Rideshare Bill Passes [UPDATED]
Update, 5:18 p.m.: The rideshare bill has passed the Senate 20-10 and is headed to Governor Greg Abbott's desk. Lyft applauded senators in a statement — but meanwhile, Houston Mayor Sylvester Turner, who has long charged that driver fingerprint background checks are necessary for riders' public safety, was unhappy. The new bill allows Uber and Lyft to use their own background check service.
"I am disappointed the Legislature chose to override Houston's successful regulatory framework which has been in place since 2014," he said. "This is another example of the legislature circumventing local control to allow corporations to profit at the expense of public safety.
The mayor added he hoped the city can work with transportation companies to expand rider options while protecting the safety of Houstonians.
On Monday, in a parking lot near George Bush Intercontinental Airport reserved for idling Uber drivers, the most popular person there was a representative from rival ridesharing company Lyft.
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Some Uber drivers had staged a silent strike, turning off their apps at 3 p.m. to possibly cause surcharges and bring attention to their demands that Uber pay them better rates. But it turns out the company paying the most attention was Lyft.
"We're coming in hot!" the Lyft ambassador yelled, as dissatisfied Uber drivers surrounded him, asking for business cards. "June 1 — if the governor signs that rideshare bill, we're coming in hot."
Chelsea Harrison, a spokeswoman for Lyft, confirmed that the company does intend to return to Houston as long as the rideshare bill passes. The legislation would strip power from cities to regulate rideshare companies such as Uber and Lyft and would instead give that authority to the state government. That way, there wouldn't be a patchwork of different regulations in each city and therefore different standards for permitting drivers.
"Lyft is hopeful that the passage of a statewide ridesharing framework will allow us to return to Houston," Harrison said. "We are working to be prepared to serve Houston riders and drivers when that time arrives."
Lyft left Houston in 2014 after the City of Houston began requiring Lyft and Uber drivers to comply with the same standards as taxi and limo drivers in order to get a permit. This meant fingerprint background checks and drug testing at a cost of $62 to drivers to apply. (Uber has threatened to leave the city over these requirements, but reached a compromise with city officials earlier this year that shortened the permitting process and nixed the required drug tests.)
Under the rideshare bill, which is currently tied up in the Senate, Uber and Lyft could use their own third-party criminal background check software and wouldn't be required to make drivers undergo fingerprinting. They would be required to adopt non-discrimination policies and would have to pay the state a yearly fee to operate.
Uber drivers at the airport Monday welcomed Lyft, saying that the competition might just be what they need to either get Uber to pay them better — or else leave for Lyft instead.
"They're ripping us off," said one driver, Adeola Akintonde. "The percentage that they take out of our pay is too high."
Uber drivers make 87 cents per mile and 11 cents per minute, but they say Uber takes a 27 to 28 percent cut. The drivers pay for their own gas. They pay their own car repairs, some caused in part by depreciation. And if some drunk passengers throws up in the backseat of their car, they barely get help. One driver told us that Uber gave him $20 to clean his seats when this happened.
Another driver, who asked that we only identify her by her first name, Rose, said she was most irked that Uber's 28 percent cut also came out of the 11 cents they earn per minute. "That's our time," she said. "Not theirs."
Rose and multiple other drivers said that, when they started driving, the rates were $1.25 per mile and that Uber only took 20 percent. (An Uber spokesman did not respond to multiple requests for comment in response to the drivers' complaint and why it has decreased the pay rates.)
Combined with the lower rates and the greater number of drivers on the streets, the drivers say it's tough to make good money. They usually wait in this lot near the airport for one to two hours before they get pinged for a ride. The worst, they say, is when the passenger is only going a couple miles from the airport — but still, even taking them all the way downtown only amounts to about $15 in the driver's pocket.
By comparison, the Lyft cards handed out to interested Uber drivers Monday promised they could make up to $35 an hour and get $100 every time they refer another driver. It's unclear what a driver would have to do to make that much cash. Drivers in Houston report making around $10 an hour. In fact the federal government, in an investigation of hourly rates that Uber promised to Houston drivers in Craigslist ads, found that less than 30 percent of drivers were making even $17 an hour. Lyft drivers in Dallas, Austin and San Antonio are paid comparable rates to Uber drivers here and in some ways are paid slightly better rates (90 cents/mile in San Antonio; $1/mile in Austin; 85 cents/mile in Dallas).
Harrison did not respond to a follow-up question by press time about the percentage Lyft takes from their checks.
In any case, if Uber doesn't respond to their complaints, as one driver told us: "Forget Uber. I'll do Lyft."
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