Uber, Lyft and Favor have entered San Marcos, and they are hiring.

The companies are generally considered part of the sharing economy, in which companies connect customers in need of a product or service with independent contractors willing to lend everything from a car ride to a house.

Katelyn Chelsey, a public relations specialist with Zipcar, a car-sharing company that expanded its presence in San Marcos in October, said the growth of the sharing economy reflects a change in consumers’ attitudes. People want the convenience of using a product or service without the hassles and expenses of ownership, she said. The sharing economy helps address that want.

“People are starting to value access over ownership in many cases,” Chelsey said. “That principle is really key to our business. We see it every day as we market to millennials. They’re a group that is most receptive to this trend of access over ownership.”

According to a national 2015 study by Bloomberg LP, an economic analysis firm, sharing economy workers are typically younger and have higher educational attainment than the rest of the U.S. workforce. About 60 percent of workers in the sharing economy are younger than age 35, as opposed to 45 percent in the entire workforce. About 30 percent have received a bachelor’s degree, as opposed to 20 percent of the entire U.S. population.

Additionally, the Bloomberg study found most sharing economy workers use the income they get from driving people around or delivering groceries or renting out their home to supplement their primary income, as only 42 percent of workers reported their sharing economy job accounted for more than 50 percent of their total income.

Companies such as Uber, Lyft and Favor could potentially provide a second source of income for San Marcos residents and, in the case of transportation networking companies, cut down on incidences of drunken driving. However, the effect on local businesses that have been providing similar services remains unclear.

Transportation services
Uber and Lyft are both considered transportation networking companies, or TNCs, a term referring to companies that connect passengers with transportation services.

Marco McCottry, general manager of Uber’s Austin market, said his company’s service has been shown to decrease the number of DWI arrests in the cities in which Uber operates. In April the company received the green light from San Marcos City Council to operate in the city.

San Marcos Police Chief Chase Stapp said he believes through anecdotal evidence Uber and Lyft have had some effect on lowering drunken driving arrests in the city, but it is too early to have statistical evidence. Stapp said he plans to study the numbers next summer, after the companies have been operating in the city for a full year.

“I think [TNCs have] the potential to increase safety,” he said. “As the bars start to let out and people need safe rides home, this gives them some different options.”

Paul Lawrence Mussler, general manager of San Marcos-based Aloha Taxi, said his company is developing an app that will make it easier for customers to use Aloha Taxi’s services. To stay competitive with Uber and Lyft, Mussler has also told his employees to focus on customer service.

Beyond that, Mussler said he does not see much point in trying to compete with Uber or Lyft because to him they are completely different services.

“Being anti-Uber wouldn’t be conducive to anything,” Mussler said. “We’ve been in this community for seven or eight years, built by a guy who’s a local guy who went to college here … and [other transportation services] are going to come and they’re going to go, but as long as we have some cars out there with drivers we’ll be in the community for a long time.”

Some City Council members were concerned that the city’s rules regulating taxis put Aloha at a disadvantage compared to TNCs.

Taxi fares are capped at $2.50 per mile in San Marcos, but no such cap exists for TNCs, which use demand-based pricing, meaning that at times when demand for transportation is high—such as a Friday night after bars stop serving alcohol—prices will be higher.

Aloha Taxi charges $2 per mile in addition to a $5 pickup fee.

Council Member Jude Prather said he was happy to allow TNCs to operate in the city, but he wants to make sure Aloha, Uber, Lyft and other TNCs are operating on a level playing field.

“The one thing I’m interested in is if [TNCs] keep flourishing, is this an industry that’s flourishing because they have a loophole in the regulations?” Prather said. “That’s something as governments and municipalities across Texas and the United States we have to come to terms with.” 

Delivery services
On Aug. 28, Favor launched in San Marcos. The San Francisco-based startup launched in Austin in 2014, and Favor Public Relations Manager Tina Heileman said expanding south was a logical next step.

Heileman said the company has hired about 100 independent contractors—or “runners” in the Favor vocabulary—to deliver meals, groceries and other goods throughout San Marcos since launching in August. That number has exceeded the company’s initial expectations, she said.

“It’s been growing like crazy,” she said. “San Marcos has been blowing up, and honestly it’s the word-of-mouth buzz that has really helped, especially with Texas State University. We’re seeing a lot of our customers are college students from Texas State.” 

Favor customers use the company’s mobile app to make an order, after which a runner will contact them with an approximate delivery time. The customer pays for the cost of the item being delivered as well as a $5 flat-rate delivery fee and a tip for the runner.

“[Favor’s contractors are] a pretty diverse crowd,” Heileman said. “That’s the beauty of the sharing economy. It’s not just for one type of person. It’s really for anyone who needs that flexibility and to make a couple extra bucks.”

When Favor announced its San Marcos launch, Albert Garcia, owner of San Marcos-based meal-delivery service College Delivery, said he knew he needed to “get [his] ducks in a row and prepare.”

Garcia employs about 15 full- and part-time drivers. Garcia said he wanted to keep his team small to ensure employees had plenty of deliveries—and money-making opportunities—during shifts. 

Garcia has also been working on making his company’s services more mobile-friendly. In addition to a new website, his company plans to launch a mobile app that will allow customers to place orders with a few taps on their smartphone.

“I welcome competition,” Garcia said. “We’re going to keep doing our thing and focusing on the food.”