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Ridesharing… an Enigma

What’s in a name?

Recently, there has been an awful lot of confusion, support, and animosity, toward a previously obscure term called “Ridesharing”.  What’s does that term conjure up n your head?  Is that the same image you had just 24 months ago?  So’ what’s all the ruckus about?  

If you drive someone around for more than it costs for you to operate your car… then you’re a taxi driver – Captain Carpool

If you are taking a friend’s child to school, a colleague to work, a neighbor downtown, or even a complete stranger across the Bay Bridge…it is legal ridesharing IF they don’t chip in more than it costs you to drive your vehicle.  Cross the Federal definition of “profit”, and you are now a “for hire driver”

Ridesharing History

Prior to 2013, the term “Ridesharing” had been mostly been limited to the domain of Transportation Demand Management (TDM) professionals whom dedicate Hitler WWII posterthemselves to reducing our dependency upon Single Occupancy Vehicles (SOVs).  Many federal, state and local programs are funded to encourage legal ridesharing because it reduces peak commute hour congestion, and helps cities achieve their emission reduction goals.

These under appreciated public servants can be found in most US cities and work at government agencies or non-profits with titles such as Transportation Demand Management agencies or Metropolitan Planning Organizations. You can also find TDM professionals inside the human resource departments of sustainability focused employers and universities.   TDM professionals dedicate their lives to research, analyze and recommend transportation alternatives to driving alone – in an effort to reduce CO2 emissions, reduce our dependency on foreign oil, improve society and reduce the number of SOVs on our streets and in our parking lots.

More than 10% of the USA population engages in true ridesharing each and every day by commuting to work, to sporting events, and to school – and none of them are earning more than it costs to operate the vehicle.  That’s more than 13,000,000 million cars off the roads because these average, everyday American commuters make a conscious choice to share a ride.  Hooray for these everyday good Samaritans who are doing their part to help reduce their impact on congestion and our climate.

Ridesharing has been defined in federal, state and local TDM programs for decades and includes; carpooling, ride boards, van-pooling, and casual carpooling (or slugging), and has been an important part of American culture since the invention of the automobile.  In fact, car clubs were created during World War II to conserve resources, federally funded carpool programs during the 1970’s were a response to the OPEC oil embargo, and organized ridesharing arrived in the 1990s with reliable ridesharing systems deployed in most major US cities over the past decade. Learn more about ridesharing history in this great in-depth report “Ridesharing in North America: Past, Present and Future” – by UC Berkeley Nelson Chan & Susan Shaheen, PhD.

Federal Ridesharing Programs

Federal definitions for “Ridesharing” have been around for decades, and may be found in many federal, state and local subsidy programs and in laws set by the Federal Highway Administration, Federal Transit Administration and the Internal Revenue Service.  “Carpooling”, “Vanpooling” and “Real-Time Ridesharing” are defined in US Public Law 112-114, and funding for qualified programs is subject to the condition, “the cost recovered does not exceed the cost of the trip provided.”

Why did this all change?   

Fast forward.  In 2010 Uber Cab launched a mobile application designed to disrupt the taxi industry.  Uber (now called UberBLACK) originally matched potential riders with licensed limousine drivers starting in San Francisco.  After a name change, UberX was launched in 2012 as a form of peer-to-peer taxi service, and both Uber and Lyft began promoting themselves as “Ridesharing” vendors that help “friends” hook up for rides. Because the term “Ridesharing” is built into so many federal, state and local subsidy programs, and is used by state departments of motor vehicle agencies and insurance commissioners around the country.  If they could be considered “ridesharing”, then they could bypass the special licensing, insurance and regulation that the rest of the livery industry must comply. The media loved the Uber and Lyft story, and the term “taxi” just wasn’t that cool… so they took the bait of their fake term and ran the story. Even if they are not real ridesharing… the term stuck, and now we have a wide range of providers and solutions that fall under the broadly used term – thus the Ridesharing enigma.

What is legal Ridesharing?

In the definitions and programs sponsored by the the Federal Government, the common thread is any alternative form of transportation whereby the driver does not earn a profit.  That includes many modes like van-pooling and carpooling when the amount of money a rider pitches in toward gas does not exceed the cost of the driver operating the vehicle.

What is a for-hire driver?

According to the many local and state laws around the country, you are a “for hire driver” when you transport people or goods for more money than it costs you to operate their vehicle.  It doesn’t matter to the IRS if you are giving a “friend” a ride, or giving a stranger a fist-pump… if you earn more than $0.56/mile plus tolls and parking then you are earning a profit – voila, you just crossed the line.

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