What is the Next Paradigm within Rideshare Industry?

Original article was published on Artificial Intelligence on Medium

What is the Next Paradigm within Rideshare Industry?

Through the decades, the evolution of technology, and the internet revolution, new services have been emerging in different sectors across the world. Many companies have adapted their business, seeking innovation to provide services with more efficiency in technology and improve their system management. Within this scene, new startups emerged and became great enterprises through the information systems. Lyft is a pioneer rideshare company of application which may exemplify this context. The taxis enterprises have been suffered a dramatic growing impact on their businesses since Uber and Lyft have launched their applications in the market. On this account, the habit and culture of people have been changed, and most passengers turned their preferences for rideshare. The leading companies as Lyft changed their software architecture from Monolithic to the Microservices, due to growth of the volume of application data. As a consequence, this business growth sector, the innovation department of the companies are trying to find out what will be the next paradigm to develop their projects.

LYFT

The first company created by Logan Green was Zimride. It was the first rideshare company that offered long-distance ridesharing between college campuses and Cornell University in upstate New York City during his student years. Green launched Lyft in San Francisco in 2012. Lyft became very popular due to the market strategy of the company putting a big pink moustache in front of cars (Greiner, McFarland, Sherman, & Tse, 2019). With powerful technology in information systems on its application and lowest price, Lyft became the quickest-growing rideshare enterprise in the United States, reaching the second position in this market. Lyft is present in over 200 towns and has been facilitating 14 million rides monthly in 2016 (Lyft Case Study, 2016).

THE IMPACT OF RIDESHARE TECHNOLOGY ON THE TAXI INDUSTRY

From February of 2020, The New York Council has been taken action to minimise the impact suffered for the taxis caused by the rideshare companies. The council suggested to the taxis the adopting surge pricing to compete Lyft and Uber because of hundreds of drivers obtained a massive financial debt through the crises of progressive fall of the taxi industry in its business. The proposal requested $600 million from private-public funds, which could cover some of those drivers debts. All of the taxis cabs need a medallion to operate legally, and in the 1990s and 2000s, the prices drove up due to huge bets that generated high-level loans. The medallions use to be sold for $1.25 million in 2012. However, that dropped to $188,000 by 2018. Over 900 medallion owners have filed for bankruptcy and the financial burdens. Some of those drivers killed themselves due to their loses (Pereira, 2020). Taxis drivers have been protesting against rideshare platforms asking for protection about their full-time work in Chicago and New York (Goldstein, 2018).

Differently of New York City, even with the expansion of Lyfit and Uber, which have occupied 60% of the ground, the taxi revenue has not decreased in Utah, according to Bill Wyatt director executive of Salt Lake City International Airport. The Yellow cabs manager, Jay Wacker, stated to be fighting back with technology and rideshare companies as Lyft which changed the transportation industry. Taxi sector developed Curb smartphone app, which works similar Lyft, however, allows the clients to pay in cash (Davidson, 2019).

LYFT ADOPTED MICROSERVICES

Following giant corporations such as Amazon, Uber and Netflix; Lyft deployed its monolithic software structure architectural to the microservices, implementing Service Mesh in its application (Currie, 2017). The monolithic architecture is a traditional model for software designing, monolithic means composed all in one piece. The monolithic application generates hard maintenance, weak reliability and lows regardless (Rouse, Monolithic Architecture, n.d).

Microservice is an architectural pattern or style which build structures in an application as a scheme of small autonomous services, modelled across a business domain. Even though microservices have not a definition rigorous, there are standard characteristics regards business efficiency, automated deployment and distributed decentralised control of data (Richards, 2016). The services are independent, so a change in one service does not affect other services. There is high agility and easy to develop, test and deploy due to the isolation of services. The Modularity; Autonomy; Hide Implementation Details; Automation; Stateless and Highly Observable are Microservices principles (Newman, 2015).

A service mesh is an inter-service communication infrastructure in a nutshell (Indrasiri, 2017). Service mesh minimises the complexity combined with a microservice architectural, providing functionalities such as authentication, security, traffic management, and routing (Behara, 2019).

NEXT PARADIGM

It is a challenge to predict the future accurately about what will be the next rideshare or taxi paradigm. There are prediction and tendencies about what may be the new services and technologies; However, marketing integrated with innovation studies are essential to understand the necessities and tendencies of costumers on the technological context. Uber is the main Lyft’s competitor. Uber had $49 billion in terms of initial public offering(IPO) in 2019, and Lyft had 11.6 billion in market cap (Palmer, 2019). Uber is investing, testing drones for food delivers (Uber, 2019), beyond air transport project (Uber, n.d) while Lyft still is keeping the focus on rideshare service. Uber Air and Uber Elevate are ambitious projects, which requires platforms or mini air stations calls by Skyport for the new generation of aircraft, which seems big drones with the capacity to transport one person or more (Uber, 2019). The UberAir project possibly may take several years until its operations start because it depends on the new structures and architecture that need to be built in cities to start a new concept of the station to the air rideshare. Also, the project needs to fulfil new regulations from the government and depends mainly on the evolution of Artificial Intelligence to drive autonomous air vehicles. If Lyft intends to keep itself in the market next generation of rideshare by application, Lyft should invest in autonomous car projects. Perhaps, before the next generation of air rideshare transport, the world will see a generation of the autonomous vehicle. Tesla is working on the improvement of its autonomous car level 5 without a geofence (Hawkins, 2019). Lyft should seek a partnership with Tesla and try to test autonomous cars in the rideshare market and in parallel to develop projects of longer terms to the air rideshare market.

CONCLUSION

Evidently, rideshare companies as Lyft have caused a real impact and loss in the taxi industry, mainly in the big cities; however, taxi drivers revenue were not so impacted in specific regions as Salt Lake City in Utah. The taxi industry committed the same mistake as the giant Kodak. Kodak ignored the digital tendency in 1994 when Apple launched its first product QuickTake, and just after ten long years, when the company was breaking, Kodak finally abandoned the film cameras in 2004. Kodak claimed for bankruptcy in 2012 (Usborne, 2012). The taxi industry realised the fall of its sector late and started reacting too late as well. Innovation and technology have been evolved speedily, new technologies, tools, updates and services are launched daily. The business world has changed, and business which does not adapt to this new technological world may bankrupt rapidly. Information Systems and their management are fundamental to a successful business, such as the leading corporations, Lyft updated its architectural software technology to improve their services, even taking the risk to suffer a massive impact on its business model at transition. The business growth generated higher demand of clients, and consequently massive data, which made the changing of software architectural indispensable. Definitely, the next generation of rideshare will come through; there are some ambitious projects ongoing from Uber. Although the expectation of these projects comes soon, those project may take several years to concretise.

Rates (Uber vs Lyft vs Taxi: Which Rideshare Option Should You Choose?, 2017)

Uber Elevate Skyport (Uber, n.d).

Uber Air Skyport 2 (Uber, n.d)

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