For thousands of partygoers, finding a designated driver is a chore—a duty you might pin on one of your buddies, saying his turn has come up.
For a few entrepreneurs across the country, it has become a private—and in some cases, profitable—answer to the public problem of drunk driving.
In parts of the world from Asia to Africa, the phenomenon of “replacement drivers”—people you can call to come to you at the bar or restaurant and drive you home, in your own car, back to your own house—has long been a common alternative means of transportation for inebriated folks. In South Korea alone, 100,000 replacement drivers serve 700,000 customers a day, the New York Times has reported.
Thanks to advances in technology that make calling such a service more convenient, replacement driver services are cropping up in the U.S. But just as taxi cab commissions have convinced regulators in New York and Washington, DC to crack down on innovators such as Uber, there are signs that the popularity of these companies is attracting scrutiny from the government.
When Craig Sher, a South African businessman, came to America, he was surprised to find that replacement drivers, an accepted convenience in his country, were mostly unheard of in the U.S.
After selling a Wall Street business he started, Sher was looking for another venture and in late 2011 founded STEARCLEAR, a company that has since franchised replacement driver services in five counties in New Jersey and Pennsylvania and hopes to spread nationally. In September the company announced it had raised $600,000 in capital for that purpose. Sher says he has found especially large interest from potential franchisees in states like Arizona where punishments for driving under the influence are especially harsh.
“Everyone talks about it like [Mothers Against Drunk Driving], and they say, ‘Don’t drink.’ No one’s really offering an alternative to drunk driving,” he says. “Unless you want to not drink at all, or not drive at all, there’s no alternative,” especially in areas without extensive public transportation options, such as Bergen County, New Jersey, a suburban area outside New York City where STEARCLEAR is based.
The way it works is a customer looking to be driven home in his or her own car uses STEARCLEAR’s smartphone application to call for a driver. The app then, using technology similar to a “reverse auction,” according to Sher, matches the customer with the best team of drivers in the area based on the customer’s GPS location.
The team consists of the driver of the customer’s car and an interceptor that follows in another car to take the driver to the next job.
“It’s really the technology that makes all of this work,” Sher says. Without the app, the business model of franchising wouldn’t work because there wouldn’t be a common model to sell to franchisees.
This embrace of technology is in stark contrast to taxi cab companies, which tend to only accept modern conveniences upon being forced by their regulatory commissions; in the case of some cities like Washington, DC, even the use of a credit card has not made it into the cab.
The founder of one DC area designated driver service sees the difference between his company, Drivers Incorporated, and the cabs, as an advantage. “We are not regulated under the bizarre, byzantine laws associated with taxi companies,” Stephen Watkins told me when I meet him at a coffee shop in the recently hip DC neighborhood of Petworth. For example, while taking a taxi across state lines like from Maryland to Virginia can carry hefty fees, Drivers Incorporated’s fare structure is a flat $30 base plus $3 per mile, no matter where the destination for your car may be or how many other people might be in the car. The company, which started in 2007 after Watkins quit his job making political attack ads, has worked up to six or seven drivers on a given weekend night, each doing three jobs.
What’s helped the company grow is that replacement drivers are still in somewhat of a Wild West phase. Drivers Incorporated, based out of Virginia, gets no special regulations beyond those subject to any other business in the area, Watkins says.
That’s true for other parts of the country as well—a fact that attracted Sher to the entire idea behind his company in the first place.
“One of the reasons we like this is we don’t have any rules or regulations,” he says. The business idea is just too new. “The designated driver service industry doesn’t really exist so it can’t be regulated,” according to Sher.
Can this fairly lawless condition last if replacement drivers gain popularity? That is an open question. Uber, another company trying to bring innovative services to transportation markets, was recently forced to pull out of New York City after being scared away by aggressive lobbying of regulators by the city’s Taxi & Limousine Commission.
There are some murmurs around North America of similar fights starting for designated driver services.
In August, the city council of St. Cloud, Minn., passed an ordinance requiring designated driver services to obtain and pay for the same licenses as taxi cab companies.
In Oshawa, Ontario, a local newspaper recently reported that the town’s director of municipal law enforcement plans to impose fines on designated driver services, and the head of an area taxi company likened them to “bandit cabs.”
These examples could be chilling precedents for companies trying to expand. Drivers Incorporated, for example, has recently become profitable, according to Watkins, but at the cost of $100,000 in marketing investments and little free time for Watkins. He spends at least 60 to 80 hours a week at work, mostly on the phone because the company cannot yet afford a 24-hour call center. While he plans to roll out a campaign on crowd-source funding website Indiegogo to raise money for such a center, going national is the ultimate strategy.
“After five years in DC we are still at eight full-time equivalent drivers,” Watkins says. “If regulations start to pop up and limit our services in other areas, we can’t expand. And if we can’t expand, we can’t be successful.”
Matt Bandyk is a journalist based in Washington, DC. Any views expressed here are his own. Image via Big Stock Photo.
Source: AFF Doublethink Online | Kathlyn Ehl
Source: AFF Doublethink Online | Jacob Hayutin