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- 1. The Count Why On-Field Success Is a Private Matter Which Type of University—Public or Private—Benefits Most From Athletic Success? By Kevin Helliker May 15, 2014 6:52 p.m. ET It's no secret that generous donations tend to follow Final Four appearances. After Michigan's basketball squad made it to the 2013 national championship, Berkshire Hathaway vice chairman Charles T. Munger (pictured) pledged a $110 million gift to his alma mater. But which type of university—public or private—benefits most from athletic success? When Adam G. Walker set about researching that question as part of his doctoral thesis, he hypothesized that sports glory would rain more money on public institutions. Their alumni bases tend to be much larger than those at private schools, after all. And private institutions tend to take more pride in their academic than athletic excellence.
- 2. But maybe the University of Chicago ought to think about rejoining the Big Ten. In the year following an athletic success—defined as an appearance in college basketball's Final Four or a Bowl Championship Series football game—donations to private schools rose 28% from levels the year before that triumph. At public institutions, the comparable figure is about 11%. Of course, private-school success was a lot less common. Of 129 teams that made either a Final Four or BCS appearance between 2002 and 2011, Walker found that only 15 of them represented private schools. Combined, public and private donations following a BCS or Final Four appearance rose 13%, versus 5% at all higher-education institutions during comparable periods, found Walker, senior associate athletics director at the University of Memphis. His dissertation approved, Walker is now submitting an abbreviated version of it to academic journals. He believes that his findings could influence the debate that rages at many private schools about how heavily to emphasize athletics. Walker acquired his data from information that universities voluntarily provide in the annual survey by the Council for Aid to Education. From 2001 through 2012, the number of institutions participating in the survey ranged from 954 to 1,052. Of the 40 basketball teams that participated in the Final Four in the period studied, and the 91 football teams, all but two represented institutions that participated in the survey.
- 3. Walker's research confirms something that must be apparent even to casual fans of college sports: that the same teams tend to do well year after year. The 129 teams that made a Final Four or BCS appearance over 10 years represented only 52 schools, though among private schools success was better distributed. The 15 private-school teams that he studied represented 10 institutions. By region, athletic success brought the highest spike in donations to schools in the South, followed by the Midwest, East and the West. Write to Kevin Helliker at [email protected] Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved ERROR: syntaxerror OFFENDING COMMAND: --nostringval-- STACK: ( ������������cvt ��˜����‹����fpgm��M����¨����glyf���b��‹� ��'|head���¢�������6hhea�›�e�������$hmtxR`„ß ���@��<�[email protected]�…��K���<�maxp!G��� ��p��� prepkfl��������$�gdir������������������� ��������������P�j�s�����������¿���b�� �������ƒ�'���`����������������������� ����������������������������������� �����������������������y�m���•������
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- 18. ��������¡���¡�������������������¡���¡ ���7���7���7���7���������������›���3� ��G������������������ß�������ß������ ��7���7���7���7���‰���‰���¢���£���£�� �����������������j���j�������¸���¸��� ������4�‘�4�‘�4�‘�4�‘�<�%�v�%���·���·���· ���·���·���·���·���·���·���·���·���·���· ���·���·���·���·���·���·���·���·���·���· ���·���·���·���·���·���·���·���·���·�}�£� ��#�T��� ) -mark- /sfnts International Business Text and Ride in India By MEGHA BAHREE JULY 25, 2014 Photo A handful of start-ups in India have begun to use technology to more easily connect auto- rickshaw drivers with customers — a twist to Uber and Lyft, the taxi-hailing apps. Credit Prashanth Vishwanathan for The New York Times PUNE, India — When Praveen Narayan Dusane first started driving an auto-rickshaw in this crowded college town, he had to hustle for every rupee. He could wait hours at a rickshaw stand
- 19. for passengers. He fought with other drivers and haggled with passengers over the fares. Typically, he earned just 300 rupees, or roughly $5, during a 12-hour shift. Now Mr. Dusane simply checks the text messages on his cellphone for his schedule, with pickups usually coming every hour or so. Business is so brisk that he recently bought an apartment for $33,000 and can afford to send his three school- age daughters to an English language school. “Earlier I had to sometimes wait all day for a ride and even then it was up to your luck the kind of fare you got,” said Mr. Dusane. “Now it’s like you can see the money in front of you.” It is the advantage of the algorithm. In a country clogged with congestion, a handful of start-ups are using technology to more easily connect auto-rickshaw drivers with customers — an Indian twist to Uber and Lyft, the ride- hailing apps. Photo When Praveen Narayan Dusane first started driving an auto- rickshaw in Pune, India, he had to hustle for every rupee. He could wait hours at a rickshaw stand for passengers. Now with Autowale, he simply checks text messages on his cellphone for
- 20. his schedule, with pickups usually coming every hour or so. Credit Prashanth Vishwanathan for The New York Times Mr. Dusane’s employer, Autowale, uses a program to map out potential routes and maximize pickups. AutoRaja has a dial-an-auto service in Chennai. In Bangalore, mGaadi offers rickshaw bookings via its website and app. The three-wheeled, often black and yellow auto-rickshaws are ubiquitous in India, where public buses are rather abysmal, subways are limited and taxis are few and expensive. People can hail auto-rickshaws off the streets, but getting one depends on a combination of negotiating skill and luck. Most drivers tend to charge a flat, inflated rate, instead of going by the meter, and often turn down prospective customers if the distance is too short or to an area from which they might not get a fare back. Autowale is trying to make the process easier by offering rickshaws on demand. Customers can request a rickshaw through the company’s app or website, as well as through the more old- fashioned method, its call center. Passengers pay a convenience fee of about 33 cents per ride. Although Uber came to India last September, the service is expensive and doesn’t compete in the same space. As in the United States, Uber, which operates in six Indian cities including New Delhi, Mumbai and Bangalore, focuses on the taxi market. Autowale doesn’t have all the gadgetry of Uber or Lyft. It
- 21. doesn’t use GPS, and most drivers don’t have smartphones, which can be expensive. Instead, the founders created an algorithm that predicts an auto-rickshaw’s potential route for the day, and assigns pickups accordingly. They serve up the driver’s schedule via basic text messages. The company promises drivers higher and more predictable income, along with fewer dead miles, those without a passenger on board. In return, the company receives a commission of 10 to 15 percent from the drivers. Autowale, which isn’t profitable yet, reported revenues of about $335,000 last year. It is also looking into insurance for its drivers, which is relatively rare in India. In late June, one Autowale driver, Malaya Swami, fractured his arm after a car backed into his auto-rickshaw. He is now unable to work for six weeks. Photo Mr. Dusane receiving a text message with details of a pickup. The founders of Autowale created an algorithm that predicts an auto-rickshaw’s potential route for the day, and assigns pickups accordingly. Credit Prashanth Vishwanathan for The New York Times Continue reading the main story Continue reading the main story Autowale gave him a loan of 5,000 rupees, or about $80, to
- 22. cover part of his expenses, and has offered him work recruiting other drivers so he has a chance to earn some money while recovering. The start-up is in talks with insurance companies to cover all its drivers. “I like my work,” said Mr. Swami. “I’m waiting for my hand to get O.K. so I can get back to driving my auto.” The first version of Autowale — founded by Janardan Prasad and Mukesh Jha, friends since college — was a flop. They initially developed a network of 400 auto-rickshaws across Pune. But they had too many rickshaws and not enough passengers for the unknown service. “What had failed was a lack of commitment on both sides,” Mr. Prasad said. “It was kind of like dating. You have to commit to try to make it work.” In the summer of 2011, they revamped their model and started out with five drivers, promising them a specific income, even if they didn’t get enough passengers. To commuters, they promised an auto-rickshaw if they booked one. “We said to them, work with us for six months, and we’ll give you the rides and the fares and improve your income,” Mr. Prasad said. Within three months they had 75 drivers in their system and were executing up to a hundred trips a day. Photo
- 23. Autowale was founded by Janardan Prasad and Mukesh Jha, center. The company now works with 850 drivers — including about 250 regulars — and ferries about 100,000 passengers a year. Credit Prashanth Vishwanathan for The New York Times Autowale now works with 850 drivers — including about 250 regulars — and ferries about 100,000 passengers a year. After a successful pilot in Bangalore, it is planning to introduce service there, and in three other Indian cities, as soon as it can raise the money for its expansion. Autowale has faced its share of growing pains. As the customer base has increased, there have been quality concerns. Satish Chandra, 77, who has been a regular customer since 2012, complains of rude drivers, late pickups and inadequate responses from the call center. “The service has deteriorated.” Mr. Prasad said the company had resolved some of the earlier problems and was also focused on driver training. At its office, which doubles as a training space, Autowale conducts regular workshops. For example, they had to teach some older drivers how to read text messages and how to get a number from a text to call a customer. “All they knew were two buttons — green to connect and red to disconnect a call,” Mr. Prasad said.
- 24. Training sessions have also included some basic phrases in English: “good morning,” “you’re welcome” or “have a good journey” when dropping off a passenger at the airport. One of the main areas of focus has been teaching drivers the concept of customer retention. For Autowale drivers, they instruct, the chances of encountering repeat customers are high. And if they don’t behave properly, they dilute the brand and their own incomes. “The key is to earn with respect and dignity and in a professional manner,” Mr. Prasad said. (Photo: Bobby Doherty/New York Magazine) Until very recently, if you wanted a taxi, there was one way to get it: Go outside and stick your hand in the air. The business of the yellow cab had—from a passenger standpoint, at least— changed markedly little since 1937, when the medallion system came into use. Since then, the city has required that cabs have permits bolted to their sheet metal, and the majority of those medallions are in the hands of big taxi fleets. The business is so tightly regulated that these companies can seem state-owned, except for the fact that they make a lot of money. (One of the great art collections of the mid-20th century was assembled by taxi magnate Robert Scull.) The city has added a few medallions over the years, but not many; their essentially fixed quantity has driven prices past $1 million apiece, making their owners
- 25. disinclined to risk. The fleets’ only significant change to the business model has been to shift their drivers from staff to hired-gun status, thus eliminating their benefits, some of which were later regained through unionization. A generation ago, drivers drove eight-hour shifts and earned passable middle-class wages. Today, after driving 12 hours and paying for gas and the odd parking ticket, a full-time fleet driver earns a bare-bones income—on the order of $35,000 per year. Neither passenger nor driver nor cabbie nor fleet owner fundamentally altered the exchange: Raise arm, pull over, drive to destination, exchange cash. Well, as they teach in business school: If a system has chugged along, making money without challenge for decades, change will be dramatic when it does come. So it has gone with the taxicab business. The smartphone, paired with onboard electronics, opened a back route into this formerly closed world, and the yellow taxi suddenly finds itself among many other cars of unfamiliar colors. Over the past two and half years, New Yorkers have seen the arrival of Uber, the San Francisco start-up that allows you to hail a black car, and certain yellow cabs, from your cell phone. Its junior arm, UberX, lets drivers use their own vehicles, and its passengers pay reduced rates. Lower rates, in fact, than yellow-cab riders: Uber has just dropped its X pricing by 20 percent to undercut the standard taxi rate. Only when its derided “surge pricing” comes into effect does the figuring get muddled. (But maybe not much: What are your odds of a street hail when it’s pouring?) Unsurprisingly, quite a few medallion owners have been howling about what they call unsustainable price- cutting. What they have to say about Uber’s stunts, like July ice-cream giveaways and on-demand kitten delivery, is almost certainly unprintable. Uber, last Friday, was joined by Lyft, a competing service that had been trying to duck New York’s Taxi & Limousine Commission regulations. Lyft has positioned itself as a more
- 26. extreme UberX, letting any automobile owner who can clear a background check become a driver, picking up jobs at will. In San Francisco, driver and passenger fist-bump at the moment of pickup, a gesture intended to promote a cheery familiarity. Lyft cars are also distinguished by giant furry pink mustaches bungee-clipped to their radiator grilles. (In New York, this West Coast whimsy will likely be scaled back to a dashboard item because of concerns about grime, and also because it looks so very stupid.) A restraining order from the attorney general abruptly halted Lyft’s New York launch earlier this summer, and the company has since agreed to require drivers to have T&LC licenses, though it’s looking for a workaround that preserves its “friends driving friends” worldview. A number of other apps, like Whisk and Hailo and Gett are also carving out niches for themselves. In the Uber-and-Lyft paradigm, the driver takes a larger cut of the car’s income than he or she would get from a yellow-cab garage, because nobody is making horrific payments on a medallion. Uber claims that the median gross income of drivers who work more than 40 hours a week is, incredibly, a bit over $90,000. The customer experience has been reimagined to be more like a livery company’s. The cars are plusher than cabs. They are unpartitioned. The Uber app displays your driver’s first name while you wait, and users seem to report more Hi, Jim! How’s traffic today? conversations than they ever had in cabs. (This may also be owed to a higher percentage of native English speakers behind the wheel. The Uber driver pool is noticeably stocked with “Who’s Who in the Cast” faces, people who might otherwise be baristas or bartenders. More women, too.) The Lyft fist bump is silly, but it does convey that this is not a relic of the old New York—where, if your cabbie greeted you with a fist, it wasn’t to say hi. As the tech companies have been plotting this soft coup, the city has—after an extended, contentious back-and-forth with the old-line taxicab owners—introduced a second fleet of cabs, painted a precise custom shade of lemon-lime green. They’re
- 27. allowed to pick up passengers anywhere outside central Manhattan, and drop them off anywhere. (Their drivers reportedly hate going downtown, because that commits them to a long drive back into their zone without a fare.) Both yellow and green cabs are all geolocatable, owing to the onboard Taxi Technology System; every fare can be paid with a remarkably un-prone-to-breakdown credit-card system. Even the backseat TVs feel like an innovation, if an irritating one. We are also, perhaps, about to see the citywide introduction of a purpose- built cab, the Nissan NV200, a.k.a. the “Taxi of Tomorrow,” though it’s been fought by both the fleet owners (who want more vehicle options) and advocates for the disabled (who were dismayed that it wasn’t wheelchair accessible). As Crain’s noted last week, Medallion Financial, the only publicly traded taxi business with a large number of medallions, has seen its stock slide by a third in the past year. And no wonder: People have wanted better ways to hail a cab for a long time, certainly since GPS came along. (Food for thought: If one of the fleet owners—or the city itself—had created its own app, might it have pulled in the funding that Uber has?) The taxi interests contributed more than a quarter-million dollars to Bill de Blasio’s mayoral campaign, looking for pull. As public advocate, he’d come out against the Taxi of Tomorrow plan. Yet for all their contributions, the fleets got—well, less than they expected. Lyft has been approved, the Taxi of Tomorrow seems likely to arrive (in some form), and more green cabs are coming. There’s even talk of legitimizing more of the dollar vans that ferry outer-borough residents to and from subway termini. The monopoly has been broken. So far, Uber appears to be pinching traditional car services— Carmel, Dial 7, and the like—hardest. (They have apps, too, but Uber’s is the one you’ve heard of.) The big question is about the prices for medallions, because so much of the yellow-cab business depends on their future value. Solo operators, who own 42 percent of the medallions, may be the most vulnerable. The fleets are big businesses, many of which bought their
- 28. medallions decades ago for peanuts. They’ll be okay. But consider a guy in Elmhurst who is leveraged out the window to pay for his medallion, and leases his car at night to other drivers just to cover the payments. Eventually, it will be his kid’s tuition, his Florida condo, his IRA—unless he’s underwater, with a medallion that cost him $700,000 but is worth much less. And it’s hard to see how those prices won’t slip. Medallions, after all, are part of a top-down system formed to fight the abuses and dangers of the old crooked New York: rattletrap cars, overclocked meters, bribed inspectors. Its heavy regulation in turn empowered the taxi lobby and (somewhat) the drivers union. That system may be a pain to deal with, but in its defense, it provided predictability and security. The loosey- goosey libertarian alternative, conceived in the clean Northern California air, calls upon the market to provide checks and balances. A poorly served passenger can, instead of turning to a city agency for recourse, switch allegiances or sue. When a smartphone-hailed car cruises up your Brooklyn block, it brings with it a little of Rand Paul’s America, fronted with a pink mustache. Taxi Talk (Photo: Courtesy of the drivers) JuniorUber SUVAge: 36 Experience: 5 months Previous job: New-media CEO Income: $370 per day “Riders want to talk on a higher intellectual level. I read the papers, follow the stocks. I also offer free Wi-Fi and Netflix on the TV screens. All these other drivers were asking me, ‘How do you get such high ratings?’ So now I’m co-hosting weekly Uber seminars.”
- 29. ArkadiyLiveryAge: 58 Experience: 16 years Previous job: Air-conditioner cleaner Income: $100 per day “Black-car businesses have built their reputations over many years and have a solid customer base. People can feel more comfortable in a car service they can use consistently that’s familiar. Uber hasn’t built that kind of reputation with their customers yet.” JawaidYellow cabAge: 45 Experience: 23 years Previous job: Baker Income: $120 per day “I won’t participate in those apps like Uber and Hailo. I like focusing on the road. Too many electronics in the cab leads to accidents.” SethYellow cabAge: 54 Experience: 30 years Previous job: English teacher Income: $100–$150 per day “When I started driving, I couldn’t control the doors, which would have come in handy back in the ’80s. But now the cabs have those TVs. When a tourist turns up the TV, I turn up my jazz radio, out of spite.” PedroLyftAge: 50 Experience: Two weeks (in New Jersey) Previous job: NYPD officer Income: $82 per day
- 30. “I work part-time as an accountant. When Lyft launches I’m going to do it on off-hours. I interviewed at their office, and they observed how I engaged with other people. Can you put on a smile and laugh? Then I fixed my third brake light, and my pink mustache came in the mail.” Women! With Uber’s job openings and fewer late shifts, a male- dominated industry is suddenly a little less so. (Photo: Bobby Doherty/New York Magazine) 1. Sugey “Raquel” RamosAge: 38 Experience: One year with Uber. Income: $1,200 per week. “People are shocked that I’m a girl and I know my way around, but they love that I drive a nice car—I’m the only Uber driver in the city with a Land Rover. I pick up a lot of schoolkids on the Upper East Side and the Upper West Side; their parents trust them to ride with me by themselves.” (Photo: Bobby Doherty/New York Magazine) 2. Jyoti LamaAge: 27 Experience: Three months. Income: $375 per week. “There’s a safety net with Uber. You can track the last person in the car if, God forbid, something were to happen. The yellow- cab partition isn’t enough to make the driver feel safe—it just makes the driver feel squished.” (Photo: Bobby Doherty/New York Magazine) 3. Phulbas ArjuneAge: 55 Experience: Five months. Income: $1,500 per week. “In 2008, I lost my job as an office manager. It was difficult for
- 31. me to get a job making the same kind of money, especially as a woman of a certain age. Finally, I tried driving a yellow cab for a few months, which was so hard, and that’s when I heard about Uber. My stress level has totally changed. I don’t have to wake up at four in the morning to get the car and then wait because there’s no one on the street until 7 a.m. My passengers get out and say, ‘Can I hug you?’ ” (Photo: Bobby Doherty/New York Magazine) 4. Shelly MartinAge: 42 Experience: Two years. “I call myself ‘the Harlem Bombshell.’ I’m an aspiring actress, so it’s important to have work that allows me to go on auditions. I need 25 to 40 trips a day to make my earnings goal—I’ve got to pay for head shots.” Technology Tech's Fiercest Rivalry: Uber vs. Lyft The Two Heavily Financed Upstarts Also Aim to Supplant the Taxi Industry By Douglas MacMillan Aug. 11, 2014 7:45 p.m. ET The ridesharing battle between Uber and Lyft has taken a fierce turn with the companies recruiting each other's drivers, offering refunds on commissions and canceling rides to clog the system. WSJ's Scott Austin has details on digits. Photo: Getty Images. Forget Apple vs. Google. The fiercest battle in the tech capital may well be between two heavily financed upstarts plotting the demise of the taxi industry—and each other. Uber Technologies Inc. and Lyft Inc. operate just blocks from each other in San Francisco, yet their bitter war has spilled into
- 32. dozens of cities where they are racing to provide the default app for summoning a ride within minutes. Lyft has crafted a friendly image by attaching fuzzy pink mustaches to its cars and encouraging passengers to greet each other with fist bumps. Getty Images The two rivals are undercutting each other's prices, poaching drivers and co-opting innovations, increasingly blurring the lines between the two services. But this is more than two tech darlings duking it out. It's a battle for a key role in the future of urban transportation. Many commuters now rely on Uber and Lyft to get around rather than taking cabs, buses or trains and, in some cases, their own cars. The loudest opposition to the ride-sharing apps comes from regulators, taxi drivers and local taxi commissions, which have moved to ban the companies from operating, offering proof that a multibillion-dollar transportation industry has entered a phase of rapid transformation. Meanwhile, the potential market for these companies may stretch beyond rides. Investors who bid up the value of Uber to $18.2 billion in June are betting it can expand into being the backbone of a logistics and delivery network for various services—a kind of FedEx for cities. For now, the battle is lopsided. Uber, led by sharp-tongued technologist Travis Kalanick, operates in nearly three times as many markets as Lyft, whose co-founders Logan Green and John Zimmer have crafted a friendlier image by attaching fuzzy pink mustaches to cars and encouraging passengers to greet each other with fist bumps. Uber also has four times as many employees and five times the amount of funding from investors. But a market-share lead doesn't assure success. By dreaming up new ways to move passengers from point A to point B, Lyft and other ride-sharing startups have created new arenas of competition. Uber vs. Lyft
- 33. Troubling Tactics Alleged: Lyft alleges that 177 Uber employees have ordered and then canceled more than 5,000 rides on the Lyft service since last October The rivalry extends to the recruitment of new drivers, the lifeblood for the services as they attempt to build the biggest networks with the the fastest pickup times. A Lyft spokeswoman said Monday that representatives from Uber have abused its service in the past several months with the goal of poaching drivers and slowing down its network. Passengers who identify themselves as working for Uber frequently order a Lyft and then ride for only a few blocks, sometimes repeating this process dozens of times a day, she said. Many of these representatives may actually be Uber drivers motivated to get a bounty by referring a new driver. According to an email Uber sent to drivers in May that was reviewed by The Wall Street Journal, the company offers $250 for referring a new driver to its service; $500 for referring a Lyft driver; and $1,000 for signing up a Lyft "mentor," an experienced Lyft contractor who helps train new drivers. A spokeswoman for Uber denied the company is intentionally ordering Lyft rides to add congestion to its competitor's service, but confirmed the company does offer recruitment incentives. "We recently ran a program where thousands of riders recruited drivers from other platforms, earning hundreds of dollars in Uber credits for each driver who tries Uber," she said. Another salvo in their battle occurred last week, when both companies unveiled similar carpooling services within hours of each other. The two offerings, Lyft Line and Uber Pool, will both let passengers ride with strangers and split the bill, lowering the cost of regular commutes. Uber operates in nearly three times more markets than Lyft. Pictured, an UberX driver in Washington, D.C. The Washington Post/Getty Images Pooling customers may mean fewer rides and less revenue for
- 34. ridesharing companies at first. But over time, the appeal of cheaper commutes could entice new customers to sign up and boost usage by existing riders, said Mr. Zimmer, Lyft's president. Lyft has been developing a carpooling model for several years and acquired a team to lead the effort months ago, Mr. Zimmer said, adding, "I think it's flattering when other companies look at how we're innovating and want to do similar things." An Uber spokeswoman said that company has been working on UberPool for several months and filed patents involving carpooling late last year. Regarding the competition, the Uber spokeswoman said: "Uber was first to market by years, back in 2010 when nobody believed any of this was possible. We now have competitive clones on each of the five continents where we operate, and that competitive spirit is good for consumers and for the marketplace." Lisa Gansky, an investor in smaller ride-sharing startup Sidecar, said that new features can gain popularity so quickly that it makes sense for Uber and Lyft to match one another in case something becomes a big hit. Last week, Sidecar also said it has been testing a carpool feature for several months. Given all the money Uber has raised, it could afford to buy Lyft and end the rivalry. The smaller startup was valued at $700 million in a round of funding in April, and Uber just banked $1.2 billion from investors in June. But Mr. Kalanick has been dismissive of other startups, instead pursuing a strategy of building the most popular features in the marketplace. The most successful clone in ride-sharing is UberX, which Uber launched in 2012 to pair amateur drivers with passengers. Up until then, Uber was a high-end car service offering Lincoln Town Cars and white-glove treatment. But just months after Lyft launched and began to popularize the concept of ride- sharing, Uber introduced its own service, becoming in the process a more affordable transportation network for a wider variety of customers.
- 35. For its part, Lyft has borrowed heavily from Uber. Uber originated a real-time map showing nearby drivers, and the design of Lyft's app is similar. In addition, Lyft's "prime time" prices for peak-demand times are a variation of Uber's surge pricing. The startups also compete in lockstep on pricing. Both companies have squeezed their profit margins to reduce prices and add more customers. Lyft earlier this year went so far as to forgo its 20% commission on rides. On Monday, Lyft said it is reintroducing commissions but will base them on how many hours its drivers work per week. A driver who logs 50 hours or more won't have to share any fees with Lyft, for instance. At the other end, one who drives fewer than 15 hours will share the full 20%. The company also said it will begin keeping 20% of "prime time" pricing, a policy change that could rattle Lyft drivers who are used to keeping all of those extra fees for themselves. Mohan Lama, a former yellow cab driver in San Francisco who now drives for Uber, believes more drivers will stop using Lyft when the company begins taking commissions again. "The day Lyft will start commissions, their drivers will stop working," he said. "Lyft is in a trap." Courting drivers has also meant offering them an array of benefits, from insurance to new-car financing. This past March, Lyft and Uber each announced in the same week they would add insurance between rides, rather than just covering the time a passenger is in the car. Those moves helped placate regulators, who have raised questions about the culpability of ridesharing startups when accidents occur as drivers are on their way to pick up passengers. At times, the fight between Uber and Lyft has gotten nasty. In March 2013, Mr. Kalanick challenged Mr. Zimmer on Twitter about Lyft's offer of an insurance policy. The back-and-forth ended with Mr. Zimmer asking Mr. Kalanick to stop by his office. The Uber CEO responded by tweeting, "you've got a lot of catching up to do... #clone."
- 36. The ease with which Uber and Lyft can imitate each other's features highlights the ride-sharing industry's low barriers to entry, said Thilo Koslowski, an analyst for Gartner Inc. Because Uber and Lyft don't own cars or employ chauffeurs, they are essentially matchmakers between drivers and passengers, he said. But investors who have poured a total of nearly $2 billion into the two companies are betting the apps will have staying power. Millions of people are now used to riding with Uber, and the app is still one of the most popular programs in Apple's App Store. "Organizing demand is remarkably hard and extremely powerful," said Bill Gurley, a partner at Benchmark and a member of Uber's board. "Being installed on someone's iPhone on the home page is a pretty sticky place to be." Write to Douglas MacMillan at [email protected] Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved Technology Thousands of European Cab Drivers Protest Uber, Taxi Apps Protesters in London, Madrid, Milan Say the Apps Skirt Regulations By Lisa Fleisher connect Updated June 11, 2014 3:45 p.m. ET Cab drivers around the world have operated for years in a highly regulated industry. Now, taxi apps such
- 37. as Uber are edging in, providing several alternate ways for people to get from points A to B. Lisa Fleisher explains. Photo: Bloomberg LONDON—Thousands of European taxi drivers snarled traffic in cities across the continent, protesting car-hailing services provided by Uber Technologies Inc. and others. French taxi drivers blocked a highway outside Paris, near Roissy, on Wednesday as they took part in demonstrations against unlicensed mobile car-hailing services such as Uber, which have shaken up the industry. AFP/Getty Images Drivers in London, Paris, Berlin and Madrid, among others, have complained that the services aren't competing on a level playing field. In some cities, Uber allows users to hail a privately licensed taxi through a smartphone app or organize a car share, often bypassing regulated taxi drivers. In one of the biggest demonstrations, London drivers on Wednesday brought streets around Trafalgar Square to a crawl for much of the afternoon, honking their horns and sporting signs denouncing the local transportation agency and several online taxi companies. "I'm protesting because I respect the future of the London taxi trade," said driver Nick Warren as he idled near the iconic square. Transport for London, the city's transportation agency, said 4,000 to 5,000 taxis turned up for the protest. Organizers put the number at 12,000.
- 38. Taxi drivers during a protest in London. Drivers say Uber and others aren't competing on a level playing field. European Pressphoto Agency San Francisco-based Uber has defended its practices, and used the protests to offer users discounts in various cities. It also rolled out its latest offering in London: the ability to use the app to hail a licensed black cab, in exchange for a small commission on the fare. "This has received a ton of traction and a ton of support from our riders," said Pierre-Dimitri Gore-Coty, the company's general manager of Western and Northern Europe. In London Uber said the number of app downloads from midnight to noon Wednesday increased more than nine times In downtown Madrid, hundreds of drivers left their vehicles at home and marched through the streets and blew whistles. At the front of one crowd, people carried a long banner that read, "For the security of passengers and the future of taxis: Uber illegal!" Protesters along the Paseo de la Castellana, a central thoroughfare in Madrid, surrounded and pounded on two black sedans thought to be unlicensed taxis, breaking the front and rear windows of one. Police moved in to push the protesters back. No injuries were reported. ANGRY HACKS: Taxi drivers snarled traffic across Europe Wednesday, including in Berlin, shown, to protest car-hailing apps such as Uber. Reuters
- 39. "It´s unfair competition," said José Antonio Benitez, 46 years old, who has been driving taxis for 21 years. "The government says they want a free market, but one that only hurts taxi drivers." In Italy, the strike was largely concentrated in Milan, where Uber's service has been operating for more than a year and has the greatest number of drivers. Taxi drivers handed out leaflets denouncing Uber and hung a large banner outside Milan's central train station saying "Illegality Reigns Sovereign!" and "Shame!" In Naples, a parade of dozens of taxis protested in the city's center, blocking traffic for a time. In Paris, hundreds of cabbies led a series of strikes that led to a handful of traffic jams and altercations between taxi drivers and drivers from other services. Some taxi drivers set out for the prime minister's office to demand a meeting. The protests spread as far as Rio de Janeiro, as the city readies for Thursday's first World Cup match. On Atlantica Avenue, dozens of taxis formed lines and moved slowly along the Copacabana beachfront, close to the luxurious Copacabana Palace hotel. —Deborah Ball in Milan, Ilan Brat in Madrid, Miriam Jordan in Rio De Janeiro, Friedrich Geiger in
- 40. Why Uber Might Well Be Worth $18 Billion By ANDREW ROSS SORKIN June 9, 2014 9:09 pmJune 10, 2014 5:32 pm The Uber smartphone app connects drivers with passengers.Credit Lucy Nicholson/Reuters It was described as “nuts,” “insane” and “idiocy.” When Uber, the limousine and taxi-fetching app company, was valued on Friday at $18.2 billion, a collective groan could be heard across the Internet. It is hard to believe a four-year-old company that exists on an iPhone could be worth more than Alcoa, Tiffany or Whole Foods. (It’s bigger than Hertz Global Holdings and Avis Budget, too.) Uber’s valuation “should mark a nadir in tech insanity: not only has the last sane person in the Valley left and switched out the lights, but someone probably paid him at least a billion dollars to do it,” James Ball of The Guardian asserted. But here’s another way to think about Uber’s whopping valuation: It is still too low. At a time when the word Internet is increasingly followed by the word “bubble,” it may be heresy to suggest that a darling of Silicon Valley could be properly valued, much less undervalued. But in the case of Uber, it may be true. Think about the basic math. There are a lot of numbers floating around about the global revenue
- 41. for taxis, but here are the basics: In the United States, the taxi business generates $11 billion annually, according to IBISWorld. In big cities like New York and London, The Financial Times reports that the average person spends $238 a year on taxis. If you extrapolate that Uber could one day control a quarter of the current global taxi market, the investment would turn out to be a home run. The business is currently in 128 cities in 37 countries and says it is doubling its revenue every six months. (TechCrunch reported Uber’s revenue last year was $213 million on more than $1 billion of bookings; Uber takes a 20 percent cut of all driver’s receipts.) If Uber were to take just half of the taxi market in the United States — and nowhere else — it would generate more than $1 billion in revenue a year. But perhaps what’s most interesting about Uber is that it isn’t just targeting the current taxi market; it is seeking to expand the market. In cities where Uber is operating, the business is clearly tapping new customers — people who didn’t take taxis or limousines before, or at least not nearly as frequently. The ease of pressing a button on your mobile phone and having a car magically appear can quickly become addictive. (I know this well; I have the bills to prove it.) What’s more, Uber doesn’t own the limousines or cars. So far, its biggest costs are simply
- 42. providing the technology that powers the network of cars as well as marketing and support costs for drivers, which means it is a very high-margin business. Because it is still private, we don’t know the hard numbers. It’s all anecdotal evidence, but ask an Uber driver what they did before they started driving and many will tell you they were unemployed or working part-time jobs. According to Uber, the company says “at our current rate, Uber is responsible for directly creating 20,000 new jobs per month and powering billions in economic impact in cities around the world.” More impressive, these new jobs are not low-wage: In New York, the company says a driver for UberX, its lower-tier car service, is making more than $90,000 annually. A yellow cabdriver is estimated to make about $30,000. This doesn’t mean that all taxi drivers are persuaded of Uber’s benefits; Some are seeking a nationwide union, in part because of competition from Uber. And then there is the prospect that Uber isn’t really a taxi or limousine company at all. Some say it is just the beginning of a much larger global delivery service. The company’s chief executive, Travis Kalanick, has talked about Uber as an extensive software platform for shipping and logistics. It’s doubtful that Mr. Kalanick will be taking on FedEx or UPS anytime soon, but in New York, he’s already introduced a messenger service using the Uber app. “Uber is creating a digital mesh — a power grid which goes
- 43. within the metropolitan areas,” is how Shervin Pishevar, an early Uber investor, described the company last year. “After you have that power grid running, in everyone’s pockets, there’s lots of possibility of what you could build like a platform. Uber is incorporated in the empire-building phase.” So far, Uber doesn’t have much competition and it appears that there is a bit of a winner-takes-all business model for companies in this category. The company competes, ostensibly, against rivals like Lyft and Hailo, but there’s a network effect to these businesses: The more people download the app, the more drivers sign up, and it quickly becomes a self- reinforcing cycle. That is pushing the competition out because rivals invariably have an imbalance of customers and cars. Of course, the prospect of regulation remains a potential cloud that won’t likely lift for some time. In London, taxi drivers are protesting the invasion of Uber drivers and in cities like Paris, regulators have sought to make it difficult for the business to gain traction for fear it will upend the incumbent business. So far, in New York, oddly enough, Uber’s accession hasn’t had a huge impact on the value of medallions. Toward the end of 2013, individual medallions were averaging more than $1 million, about double what they were in 2008. In Boston, medallion prices have gone up, not down.
- 44. If you’re still scratching your head about Uber’s valuation, consider the “smart money” that plowed $1.2 billion into the company before its recent valuation, only 10 months after it was valued at only $3.5 billion: Fidelity Investments, BlackRock, Kleiner Perkins Caufield & Byers, Google Ventures, Menlo Ventures and Wellington Management and Summit Partners. Virtually all of them have made a small fortune on their recent investments and have turned out to be long-term, not short-term, investors, who are betting on the value of Uber rising. Last month, Semil Shah, the writer and investor, tweeted: “Uber could most certainly go public yesterday — but why would they want to? No incentive. $100B potential company.” Maybe Uber will turn out to be a bust. It is possible. Or maybe not. Either way it will be a fun ride. ERROR: syntaxerror OFFENDING COMMAND: --nostringval-- STACK: 0 0 2