Hitchhiking app hopes to tap into the booming sharing economy

08/20/2014 7:03 PM

08/20/2014 7:03 PM

Hitchin’ a ride?

Instead of pointing your thumb down the road, you might be better to work it on your smartphone.

It could tell you a little about prospective drivers, and give them the comfort they need to give you a lift.

Lawrence’s Jenny O’Brien thinks an app tapping into the power of social media can cut through the mystery — and fear — separating hitchhiker and driver.

“It makes (hitchhiking) smarter and safer,” O’Brien said. “If you know somebody is going to rate you, then you’re less likely to be a jerk.”

The power of the Internet and social media give us more information about strangers than ever, launching the era of a sharing economy where we’re willing to loan our stuff — often for a price — with people we know only by their online ratings.

That sharing economy is exploding all around us. In some quarters, it’s estimated to be worth billions. People are leasing spare rooms, textbooks, vehicles, clothes and seldom-used parking slots.

Advocates say that newfound willingness to loan stuff to one another conserves precious resources, reducing wear and tear on the planet.

But the subtle and growing shift threatens to upend traditional brick-and-mortar business models and imperil livelihoods. Cabbies and innkeepers, for instance, aren’t wild about the trend.

The hitchhiking system planned for Lawrence springs from ride-sharing networks that have clashed with taxi operators upset that the free-wheeling services aren’t subject to the same fees and regulations as cab drivers. O’Brien resists the comparison because she says she’s in it to fight pollution and traffic, not for a profit.

In Kansas City, the conflict showed most visibly in the ride-sharing service Lyft’s battle with the city to do business.

Lyft and other ride-sharing services such as UberX and Sidecar are part of a mushrooming business model that uses a smartphone app connecting part-time drivers using their own vehicles with passengers.

It’s proving to be lucrative. The Wall Street Journal reported in March that Lyft was valued at more than $700 million, compared with $275 million a year earlier.

Uber’s value soared to more than $18 billion in June when the San Francisco startup announced it raised $1.2 billion from investors.

The sharing economy goes beyond transportation. It extends to renting spare rooms to strangers, turning homes into makeshift restaurants or leasing yards to gardeners.

It all comes together because technology makes it easier for sellers and buyers to find and learn more about each other, opening the door to the new approach to commerce that’s reshuffling the deck for traditional businesses.

“What you have essentially done is lowered the transaction costs of hooking people up to make a deal,” said Art Hall, director of the Center for Applied Economics at the University of Kansas.

Airbnb rents out spare rooms. TaskRabbit outsources your chores. Meal Sharing lets travelers find home-cooked meals. We Patch gives homeowners the opportunity to lease part of their yards for gardening.

The companies generally make their money through transaction fees. Their success comes not only from technology fostering more trust through social media and mobile phones, but also through a change in outlook after the steep economic downturn in 2008.

The recession “accelerated people’s need to rethink what they owned and what they spent,” said Lisa Gansky, a California entrepreneur who wrote a book about the sharing economy. “What we are seeing is a trend where people are trading things for experiences.”

With growth comes regulatory resistance, especially in the transportation and hotel industries saddled with fixed expenses.

Cities across the country are now confronted with how rules for taxes, labor and public safety can keep pace with technology-driven businesses.

Meanwhile, a court battle is playing out locally. Kansas City argues that Lyft’s pink-mustachioed fleet is operating illegally because it’s not complying with regulations aimed at protecting the public.

Lyft, meanwhile, contends it doesn’t have to comply with the city’s rules because it is more of a matchmaking service than a transportation company.

The rooming service Airbnb has run into problems in New York City, where the state attorney general is looking at whether hosts are breaking a local law that bars apartment rentals for under 30 days unless the occupants are present.

Ultimately, government and businesses will adjust to each other, said Gansky, author of “The Mesh: Why the Future of Business Is Sharing.”

“The policymakers are lagging the innovation. We are starting to see policy coming around,” she said. “We are still in the early stages of something that’s a fundamental shift.”

O’Brien’s service fits neatly into ecosystem of the sharing economy. She’s trying to make use of one of the most wasted resources of all: car seats.

Nearly 80 percent of Douglas County residents drive to work alone. That’s a lot of empty cars that might be used to save gas, prevent more wear on the highway and preserve the planet from noxious fumes.

“You can see all those cars driving by as potentially tiny little buses if we can just get people in the mindset to open their vehicles to others,” O’Brien said.

O’Brien plans a service that will provide hitchhikers with a small, portable dry-erase board emblazoned with their hoped-for destination. She’s teamed with a venture capitalist who founded the ride-sharing service Carma.

Her service, CarmaHop, will give each rider and driver an ID and access to a smartphone app for recording their experiences on riders and drivers. A map will display the best locations for hitching a ride.

For now, the service will be free, although the possibility of charging for the expense of the drive, maybe 20 cents a mile, is being explored. O’Brien wants to launch the new service in September.

Challenges lie ahead.

“We have a lot of baggage to overcome from years of people saying hitchhiking is dangerous,” she said.

To do that, she needs Lawrence to lower a regulatory hurdle.

The Lawrence City Commission is considering O’Brien’s request to lift a city law banning hitchhiking for her service. The commission has agreed to lift the ban for six months so O’Brien can figure out how to implement her program.

The Lawrence Police Department, meanwhile, has expressed general concerns about hitchhiking dangers.

“It could be inherently dangerous to get in a vehicle with someone you don’t know, whose intentions you don’t know anything about,” said Lawrence Police Department spokesman Trent McKinley. “You’re taking a gamble.”

McKinley wouldn’t pass judgment on CarmaHop, saying that riders will have to decide their own comfort level with the technology.

He said police are also concerned about how the service might affect traffic if cars are stopping to pick up riders on busy streets.

Even with an OK from authorities, a service like CarmaHop needs to revive the hitchhiking spirit. There’s some evidence that people are willing to play along.

In traffic-clogged cities, people already pick up random passengers so they can qualify for carpool lanes.

Ginger Strand, author of “Killer on the Road: Violence and the American Interstate,” argues that fears of hitchhiking are overblown.

Technology revealing more about who’s driving and who’s thumbing, she said, can make it more appealing.

“We’ve come into this era of social media with everybody being wired and having their devices all the time,” Strand said. “It seems like there are a lot of ways hitchhiking can be made safer.”

To reach Brad Cooper, call 816-234-7724 or send email to bcooper@kcstar.com.

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