The Rundown
9:35 pm
Mon April 21, 2014

Economy & Innovation Rundown: The Wrath of Cabs

A maroon car with a pink mustache drove past me this weekend when I was out walking the dog. It was not a car trying to make a fashion statement. It was one of the new Lyft drivers who put the distinctive pink mustache on her car’s grille as an indicator that she is open for business.

The pink mustache of a Lyft car. They've been forced to stop business in St. Louis for now. But in other places, lawmakers are finding a way to make new car sharing services work.
The pink mustache of a Lyft car. They've been forced to stop business in St. Louis for now. But in other places, lawmakers are finding a way to make new car sharing services work.
Credit (Flickr/Alfredo Mendez)

If you haven’t seen one of those cars driving around, you may have heard about the kerfuffle that the new car service is causing. St. Louis is just the latest city to deal with this new brand of transportation. And, as of Monday afternoon, it chose to deal with it by issuing a temporary restraining order against Lyft.

First, let me explain Lyft.  People register themselves and their own cars with Lyft to be considered drivers (the ones with the pink mustaches). The drivers are vetted and bonded. Potential passengers use an app on their smart phone to summon a car. The passengers ride in the front seat, if they want, and they pay for the service via the app. No cash exchanges hands. The company claims it’s not really a taxi service. It’s a way for people to give each other rides. It’s a car-sharing service.

And because it’s a car sharing service, it didn’t bother to check in with the St. Louis Metropolitan Taxicab Commission to make sure it was OK to enter the market here. It has never done that in any city it’s entered. In fact, every time Lyft or Uber, a similar app-based taxi service that has yet to show up in St. Louis, enters a market, local taxi drivers and taxi commissions go a little bonkers.   

A blog post by St. Louis taxi driver Umar Lee nicely sums up why Lyft or Uber is a bad idea. It’s basic supply and demand economics, he writes:

“There are many professional cabbies who have been driving for decades. For cabbies to earn a decent living there has to be proper regulation of the industry. Too few cabs and the public isn’t served and too many and drivers can’t make decent money. St. Louis has done a pretty good job at regulating the industry through the Metropolitan Taxi Commission. Not perfect by a long shot; but one of the better regulatory bodies by national standards.”

Lee points out that people like him are able to make a decent living driving a cab – he’s been doing so since 2005. But when a service like Lyft appears, a glut of drivers winds up on the street offering cheaper rides and that cuts into the profit margins of the traditional taxis.

That’s one perspective.

The other perspective can be summed up thusly: The future is here, get with it.

Or, as Nextstl.com writes:

“Business models like Lyft are obvious and comfortable evolutions for a generation used to online dating, websites like Trip Advisor, and Facebook. Lyft’s round peg may be in violation of St. Louis’ square hole, but Frank DeGraaf (@CountonDowntown) summed up the issue on Twitter, writing, 'I’m convinced that @lyft, @Uber, and the like will become the new normal, even in #STL There’s no stopping it, just adapting to it.” And that may just be as brilliant and compelling an exposition as I have seen from anyone on any subject.'

Other cities have figured out how to strike a balance and make it work. Rather than forcing Lyft to fit into the existing regulatory structures, some places have carved a new place for these services. While exploring the competition between Lyft and Uber, an article in Wired.com points out that California has created a whole new category to make space for the new business model. It’s called the Transportation Network Company.  

“And in a way, officials had little choice. Uber and Lyft are here, and they’re popular. They also have become emblems of innovation in the current tech boom. The political incentive to figure out something that works is strong.”

The St. Louis Taxi Commission did make a small concession to the changing technology of taxi cabs. They created a special license for dispatching app services and recently gave the green light to a company called Carmel Car and Limo to start operating in St. Louis. 

Over the weekend, St. Louis cab commission and the city’s police department spent a good deal of time issuing citations to Lyft drivers. And, as mentioned before, Lyft now has a temporary restraining order to contend with and has to wait until May 6 for a hearing on the matter. This kind of tug of war will either become the new normal, or the taxi commission will have to figure out a different way to manage the change that is coming its way.

And speaking of innovation...

We’ve been batting around the question of just how innovative St. Louis is for some time now. We report on major grants for bio science, recipients of the Arch Grants and the general upward trend in how much money St. Louis startups are raising.

But despite all the good news, we can’t help but wonder how much veracity there is to the claims that St. Louis is going to be an innovation hub. Sorry, we’re journalists. Skepticism is what we do.

Well, a recent article in Fortune magazine about St. Louis' start-up scene confused the matter even more.  On the one hand, the article is honest: It points to all the other cities that are trying to label themselves as the next Silicon Valley and indicates that St. Louis may be no exception. It also acknowledges that the startup environment here is young and doesn’t have the established networks that a thriving, innovative city needs yet. Yet.

Here is where the article is also full of praise. It indicates that things are changing here and that the infrastructure is falling into place, thanks in no small part to the city’s high-profile advocate, Jim McKelvey, founder of Square.

“It takes many generations of successful deals and exits for ecosystems to flourish, and St. Louis is still in the first phase. But McKelvey says he can sense a notable difference from five years ago. 'I'm feeling an energy that I haven't seen,' he says. Before, conversations about St. Louis would always focus on the cost of living. 'They'd lead with the, "Oh it's cheap to live here." And that always bothered me,' he says. But now, the answers are varied. People say they came to St. Louis because of its strength in life sciences, or to work with one of its small, but growing startups.”

It almost makes this skeptic hopeful. I'll keep my eyes open for other indicators that our boomlet is more than a passing fad and keep you posted on how the region is doing.

And you think your job is a prison ...

What does your workplace look like?

Is it long hallways with offices on either side? Is it a big open floor space with cubicles (or “veal fattening pens,” as Douglas Coupland called them) all over the place?  Or is it like the Falkenburg Road Jail in Tampa, Fla.?

I’m not talking about bars on the windows and doors. The Florida jail groups its inmates in dormitories of four to eight beds. Each group is separated from the other by a low wall. According to the Wall Street Journal, the jail is efficient, safe and has low incidence of violence.

The logic behind this design is similar to the reason behind much of office design today. People function best in groups of six to eight. With too few people, the group can easily be dominated by one strong personality. When the group is too big, it tends to be highly inefficient unless a leader is elected. The Goldilocks group size of six to eight seems ideal for forming bonds of trust and easy collaboration.

In a well-designed office, what appears to be an open space is actually groupings of cubicles or hubs of six to eight people bunched together with common areas accessible nearby.

Very few offices are actually organized in this way. But it could be the wave of the future. So, if you never acclimated to the cubicle in your open-floor office, maybe having cell-mates in hubs of eight will change your mind.  

The St. Louis Public Radio Newsroom is certainly beautiful. And open. And we may not be in pods of four to six, but we're super collaborative and proudly report no incidence of violence.
The St. Louis Public Radio Newsroom is certainly beautiful. And open. And we may not be in pods of four to six, but we're super collaborative and proudly report no incidence of violence.
Credit St. Louis Public Radio's Jason Rosenbaum