Analysis Part 4: Is it Possible Ridesharing Apps Are Not Viable in the USVI?

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This is part four of a series looking into the severe failings of taxi service in the territory; how the wildly out-sized influence of the taxi lobby has brought us here, and what needs to happen.

Taxis on a cruise ship day.

Some have suggested that the territory may be too small for ride-sharing apps to work out. Some studies suggest very small, rural areas in the continental U.S. have limited service, and that in some areas drivers make little money due to short rides and limited customers.

There is a lot of reason to think that is not true and the USVI is a great candidate for these apps. But even if it really did seem like the territory were not viable for Uber or Lyft or some other service, that’s no reason NOT to do it. After all, if Uber ends up failing in the marketplace, taxi drivers will be unaffected. No harm, no foul. And a local app could fill the role too.

Will the Legislature work to make it happen? The territory has a long history of legislation and of executive action that did not amount to much. Senators routinely pass bills despite testimony that they will be harmful, and have eagerly seized on testimony that they won’t hurt and might help as support for their plans. Occam’s razor is the principle that the simplest answer is the most likely one. If any politician shies away from doing something the most powerful local political lobby doesn’t want to see, and says the reason not to do it is because it will not hurt anything but will not help either, it’s because of the powerful lobby.

Some small Caribbean islands also do not have these services. Why not? Antigua does not allow it. Is it for market reasons? No. Antigua’s taxi drivers oppose it so Antigua’s legislators oppose it. But Antigua does have at least one home-grown ride-share service. And there is one already quietly operating in the U.S. Virgin Islands. If there were no market, it would not exist.

Barbados recently launched an app to allow its taxi drivers to offer services in a similar way to Uber or Lyft. Bajans were deeply opposed to a U.S. company coming in and threatening the local taxi industry. Uber has not declined to go there; Bajans have avoided bringing it in because of tax driver opposition.

St. Maarten too launched an app for taxis. It too keeps Uber out – so far – to protect its taxi drivers. But that may change.

There have been some studies and some negative stories suggesting ride-sharing apps may not do as well in small, rural communities. Some Virgin Islanders in positions of influence have suggested this is why the USVI should not pursue them.

But once you look closer at the data, the reasons there is little service in some small rural areas have to do with a lack of cell service, a lack of internet service, a lack of people who need rides, very short rides that have low fares, and the availability of better paying jobs.

None of those obstacles really apply to the USVI. Cell service is limited in some areas, but not like rural America where wide swaths of land lack service for miles and the population is very sprawled out. Rural North Dakota has very few tourists who might need rides and everyone has a car. The U.S. Virgin Islands has many tourists who are severely under-served for public transportation and many residents do not have cars. USVI median income is much lower than stateside and the unemployment rate is higher. This is even more true on St. Croix. The extra income would be more important to more V.I. families than it would be to folks in many U.S. jurisdictions.

Another concern is that people who do not have credit or debit cards cannot use ride-sharing apps. This may apply to the USVI disproportionately. But this is good news for the safari bus operators, collecting $3 per customer. Their concerns that ride-sharing apps may put them out of business are probably overblown. And if ride-sharing becomes a reality here, it would still be taxis alone who would pick up people off the road, not ride-share drivers.

Some worry that the expense of having a car and spotty cell-service and GPS may be a barrier to ride-sharing, limiting the number of drivers and limiting its usefulness. One person has suggested there are not enough people with nice enough cars. There are likely a few places out East on St. Croix where phone signals don’t reach, or on the northwest shore, for instance.

But occasional service lapses are issues in many areas that have bustling ride-share businesses. Easily 90 percent of the territory IS covered. But phone-based ride-sharing service to just 50 percent of the territory at all hours of the day would be a gigantic, earth-shaking transformation from the current absence of reliable night time transportation at any price. A glance at the KMart or Plaza Extra parking lots should dispel the notion there might not be a few dozen people with decent vehicles. The territory’s high unemployment and low pay make moonlighting as a driver attractive to more residents than they might in areas with low unemployment and high wages.

Another concern some have raised is that 25 percent of the fares would leave the territory to Uber and Lyft’s parent companies. Keeping every dollar in the territory would be nice. But if that money was just going to sit in a tourist’s pocket, 75 percent of something is way better than 100 percent of nothing.

And most of the dollars would come from tourists visiting from outside the territory too, bringing new dollars in. This is unlike casinos and “video lottery terminal” slot machines that transfer local money out of the territory. And nothing prevents us from having a – possibly cheaper- local app that keeps all the money in the territory.

While Uber has been successful in Puerto Rico and the Dominican Republic, it started up in Trinidad and Tobago, and then shut down. Could the same happen here? Probably not but maybe.

According to reports in Trinidad papers and the online commentary site Medium, Uber started out strong, but faced several difficulties. Few people had cell phones or credit cards, limiting their usefulness. But Trinidad is vastly larger, has worse infrastructure and, most significantly, has much less tourism than the USVI. With a population of 1.3 million, Trinidad saw 375,000 air visitors in 2018. The USVI, with 100,000 residents, saw 502,000 air passengers. It is night and day.

Uber also had problems with crime. People would call for rides, then beat and rob the drivers. Crime is a very severe issue in the USVI but that sort of activity has not been a frequent problem previously.

Also, Uber was never legal in Trinidad, limiting its reach.

There is every reason to believe the USVI is a great candidate for ride-sharing apps. The massive failure of the taxi industry to fulfill its normal roll only increases the opening for these services. Bringing them in would enable budget overnight visitors to get around more, spending their dollars in more places. This can make those places busier and more desirable to visit. Having more options for tourists will encourage more tourists to buy a plane ticket and spend a few days here. And if all of this is wrong and these services are somehow not feasible here, despite a tourism-based economy struggling to function with a massive transportation shortfall, despite the market for gypsy cabs and semi-covert ride-sharing? Well if it does not take off, the absolute worst case scenario is nothing changes.

If we really are trying to compete with the rest of the region as a tourist destination, we need to make this happen before all our competitors do. We cannot continue to limp along without providing basic services to our visitors and still expect people to buy a plane ticket to come here.

Original Source: https://stjohnsource.com/2019/05/16/analysis-part-4-is-it-possible-ridesharing-apps-are-not-viable-in-the-usvi/