Flywheel has finally figured out its secret weapon against Uber

A few weeks before New Year’s, I received a pitch from Flywheel that I’ve been waiting for since I started using the service in 2013. It said, “Flywheel Battles Uber with #FairFare.” The email inside proclaimed “Flywheel is the no-surge pricing alternative to get a ride around town.”

flywheel email to me

It looks as if Flywheel, the booking app for taxis, has finally figured out its secret weapon against the likes of Uber and Lyft: Reliable pricing. It’s not a new feature for the company. From its inception in 2009 Flywheel has never had surge pricing in the cities it operates in — now SF, LA, Seattle, Sacramento, and San Diego. But for the longest time, the company didn’t seem to understand that this was the best way to lure people back to the taxi system. Instead, it touted Flywheel’s legality, its use of regulated taxis, the number of car companies on its app. None of those were big enough draws.

At the end of the day, people vote with their wallets, and if there’s anything that will get people to move to Flywheel, it’s cost.

Is price part of reliability?

Town car ride-hailing Uber

Uber and Lyft argue that surge pricing makes their services more reliable because it gets more drivers on the road during a time they might not otherwise drive — like New Years or a hostage crisis. There’s truth to that.

But these companies miss the fact that for many non-wealthy customers, stable price is one of the factors in determining reliability. Without the assurance of a fixed fee, people will turn to other services for backup.

Although people have been complaining about surge pricing for years, this New Years showed the first sign that they are willing to stop using Uber and Lyft as a result. The SF Examiner found that on New Year’s Eve in San Francisco there was little to no surge pricing, because of either low demand or too much supply.  The lack of surge upset drivers who gave up their New Year’s to make money.

Tweets from passengers suggest that people planned ahead, deciding to walk, take public transit or flag taxis to avoid the ridesharing surge. Ironically, that resulted in little to no Uber or Lyft surge pricing because there wasn’t enough demand to drive it there. “It was an incredible sight to see all the cabs full and the rideshare cars empty,” one driver told The Examiner. “I was laughing and crying at the same time.”

Another potential reason there was no surge pricing on New Year’s Eve in San Francisco is because so many drivers took to the road in the hopes of making money. With such a flood of supply, there wasn’t enough demand to cause surge pricing.

It’s worth noting the story isn’t bulletproof — it’s based on anecdotal evidence. When I asked, neither Uber nor Lyft would confirm specific SF surge rates in 2014 compared to previous years.

In other parts of the country, where the Uber service is still relatively new, surge pricing was common, according to this CNN data.

Passengers wise up and avoid the surge

The difference between SF and other cities suggests that over time, passengers get smarter about using ridesharing services. Although they may put up with surge pricing initially, they eventually expect and avoid it. As a result, Uber and Lyft could lose customers, and the resulting profit, on some of the biggest travel nights of the year.

It’s clearly not hurting Uber at the moment — the company saw 2 million rides on New Years Eve alone. But the service is new in a lot of places, so passengers are just starting to feel the pain of unpredictable surge pricing. By New Years Eve next year, will Uber users in other places get smart about avoiding the surge, the same way San Francisco residents did?

I suspect surge-avoidance will slowly trickle down to day-to-day travel. I live near Union Square in San Francisco, so I’ve already learned I can’t rely on Uber and Lyft from a pricing perspective, because they’re nearly always operating with surge pricing here. Without that reliability, I prepare alternative options for travel and develop new habits, lessening my ridesharing addiction. That’s where a competitor like Flywheel or Sidecar could come in and do really well.

There’s been plenty written about how surge pricing is a broken system, but there hasn’t been much ado about the fact that it’s also Uber and Lyft’s biggest weakness. It’s the one area where other companies can easily beat them.

Services with Airbnb pricing data grow as the king stays quiet

Successful new companies generate new business opportunities, as other companies emerge in their wake to support them and find their own profits, and Airbnb is no different. As more and more consumers are renting their properties on Airbnb — and some are doing so full-time as their own business — a spate of companies have formed to help Airbnb renters become mini real estate agents.

Airdna is one such offering. It combs Airbnb data to give people information on average Airbnb prices in their neighborhood, as well as analytics like most popular amenities offered in your area and the effects of using Airbnb’s Instant Book feature.

Based in Santa Monica, the product is built and marketed by a father-son team. Airdna started out as an e-book written by the son, Scott Shatford. It offered directions and advice to those looking to rent Airbnb apartments full-time. Shatford soon realized that Airbnb’s wealth of data, once organized, would be its own business opportunity. He calls it the “Wild, Wild West.”

“We’re making this leap of faith that people really want to get smart and data-driven about Airbnb,” Shatford told me.

Airdna is a freemium product, and you can access basic information — such as what can you expect to make in your city based on the size of your place — for free. The more detailed report of your area costs $30.

Airdna faces some stiff competition. A few other companies have cropped up with similar offerings. Beyond Pricing is one such product, and its slick beautiful design puts Airdna’s early 2000s look to shame. Airenvy is another competitor in the field, although it’s a little different. It manages your property for a fee, using a price fixing algorithm to determine the best price for the season, market availability, and area.

These are the kinds of companies that will help the nascent apartment sharing industry mature and reach a mainstream population. But their businesses are probably at the mercy of Airbnb’s whims; Airbnb offers a rudimentary room recommendation price already for its hosts (albeit not one sophisticated enough to consider seasonal or day-to-day demand changes).

If Airbnb wanted to kill these counterpart companies by producing its own data analytics, it could at any time. We’ve seen it happen before, whether it’s Twitter killing off Twitpic by introducing its own photo upload feature or Facebook rolling out a music player to compete with iLike.

IPhone 4S demand remains strong at home and abroad

Apple’s iPhone 4S hit parade continues to roll on, according to notes from two investment analysis firms on Monday. In the U.S., the 4S continues to sell out daily in Apple retail stores, while demand for preorders also remain strong as the device rolls out internationally.

Canadian Providers Running Out of iPhones

noiphone_canadaThe iPhone sells well, be it the iPhone 3G or the 3GS. And it appears that north of the border, it’s selling even better than Apple (s aapl) had predicted.

Canada’s exclusive iPhone service provider Rogers Wireless is completely out of stock of the iPhone 3GS and 3G, the Globe and Mail is reporting. Fido, its low-cost subsidiary, is also out of the 3GS, although according to the report it still has some stock of the 4GB 3G on hand in a few brick-and-mortar locations. Read More about Canadian Providers Running Out of iPhones