Disruptive Tech vs Established Power Systems: Peer-2-Peer Car Sharing Wars

As reported by Xconomy: When Rujul Zaparde started running his company’s new peer-to-peer car rental service at San Francisco International Airport last year, it came with a heavy dose of entrepreneurial hustle. Glitz and glamour, not so much.

“It was me, greeting you at the car in a terrible-looking green vest,” he says with a laugh. “It was pretty bad.”

Ten days later, the company got a cease-and-desist order from the airport, which was not pleased that FlightCar was operating without permission in one of its parking lots.

FlightCar fled, but didn't go away permanently. After relocating to a facility in nearby Millbrae, CA, the Y Combinator-backed startup continued doing business—FlightCar lets everyday customers park their wheels for free, and offers the chance to earn some money if another person rents the car while they’re away.

The change of scenery didn't satisfy airport officials. Since it was serving SFO travelers, the argument went, FlightCar had an obligation to operate under the airport’s strict rental car regime, which includes a 10 percent tax on revenues and a $20 fee for each rental.

In the 2012 fiscal year, SFO raked in more than $90 million from those charges,according to the lawsuit that SFO filed, accusing FlightCar of unfair business practices. The startup is fighting the case.

In November—about six months after the lawsuit against FlightCar and just in time for the start of holiday travel—another peer-to-peer car rental service came to San Francisco’s airport. This time, the reception was different: a glowing press release from SFO announcing the agreement it had reached with an innovative new company, RelayRides.

The deal allowed RelayRides to offer its customers free parking and a little payback if cars were rented out, similar to FlightCar’s offering. Instead of ferrying customers from the lot to the airport in local town car services, as FlightCar does, RelayRides would be using a local hotel’s shuttle bus. And it would be shelling out 10 percent of its sales and the $20 per-rental fee, just like the big rental companies.

“RelayRides, which offers a forward-looking new concept, has clearly taken the leadership position as the first such company to establish an authorized service with SFO. We applaud their proactive approach, and for providing an example for others to follow,” airport director John L. Martin said. 

Similar battles are becoming almost routine as startups born of the digital economy confront the real world’s established power systems, particularly in the emerging “sharing economy,” where online tools help networks of consumers rent things to each other. And as these young companies try to manage rapid growth and fend off threats to their survival, the decision about whether to fight regulators or accommodate them can become another way to gain a competitive edge.

RelayRides is a perfect example of the boom in sharing economy startups. The company was founded in 2009 in Boston before raising venture capital investment from August Capital and Google Ventures, and moving the company headquarters to San Francisco.

The original idea was to operate as an hourly car-rental service akin to Zipcar, but with a significant twist: instead of owning an inventory of cars, the company would let users rent their unused car hours to other people around town.

RelayRides’ strategy has shifted since then. The company ditched hourly rentals last fall, focusing instead on more lucrative long-term contracts, particularly for people away from home. “Our business is focused, right now, primarily on travelers,” community director Steven Webb says. 

RelayRides has expanded rapidly in the past two years, fueled by $18 million in venture investment. In the spring of 2012, RelayRides was still available in just two markets. Today, the system lists cars for rent in 1,900 cities and 287 airports across the country, Webb says.

Those airports are especially critical if RelayRides is going to continue growing. The company just started offering airport-specific rentals last summer, and “we expect it to be around half of our business within a year,” Webb says.

That tracks with the broader rental car market: airports provide about half of the revenue for the U.S. industry, which generated an estimated $24 billion in 2012.

“The average rental through an airport is a lot higher than the average rental to someone in your neighborhood,” Webb says. “Airports represent a lucrative opportunity for us, and they represent a lucrative opportunity for our members who are renting out their vehicles.”

But, since they’re typically built by public entities, many airports are also heavily regulated. If you want to build a business that taps into the lucrative stream of airport travelers, that often means getting permission from the airport’s bosses and paying significant fees and taxes for the privilege.

Getting more aggressive in the airport market meant another significant change in tactics for RelayRides. In almost all of its locations, including all the other airports it serves, the company works as a relatively passive online network connecting car owners and renters—it puts the two parties together, processes the transactions, provides some insurance, and takes its cut of the bill.

In striking its deal with SFO regulators, RelayRides put employees on the ground for the first time, Webb says. Now, instead of just listing where cars were located and letting the renter and owner meet up, RelayRides keeps the fleet in a central parking lot (provided by another business) and uses an airport shuttle bus, which is operated by a local hotel. To entice more owners to rent their cars, RelayRides also offers free parking at the airport lot, in addition to earning 10 cents a mile from any rentals. 

Essentially, it’s the same model used by FlightCar. And RelayRides plans to expand its footprint at other airports by following the same pattern, which includes playing nice with regulators.

Webb says RelayRides decided to go the regulated route at SFO because it would be easier and more sustainable. The company can still compete with traditional rental car behemoths after paying the fees, he notes, because it has lower costs from not owning and maintaining a large fleet of cars.

“We found when we were discussing with the authorities at SFO, we were able to create a very long-term, mutually beneficial agreement that, for us, represents a really solid way to grow the business elsewhere,” he says.

FlightCar’s approach to local regulations couldn’t be more different. Since getting booted out of the SFO parking lots in February 2013, the company has fought airport officials’ insistence that it is operating illegally.

In fact, co-founder and CEO Rujul Zaparde says, the public dustups with SFO has been good for business. “During that week, when the SFO litigation had come up, we actually had our best numbers up to that point,” he says.

The company’s decision to dig in for a legal battle is remarkable in the face of a growing competition with RelayRides, whose investment haul is about triple the size of FlightCar’s $6 million total venture capital backing.

FlightCar’s fundamental argument is that the old-fashioned regulations put in place for rental-car companies just shouldn't apply to its business. “We’re not a car rental company. We’re a peer-to-peer car sharing company,” Zaparde says.

It’s also aided by some quirks in the local geography—San Francisco County owns the airport itself, but the land is surrounded by neighboring San Mateo County. That means FlightCar’s Millbrae parking operation isn’t on any property regulated by San Francisco’s government.

And since the startup pays local car services to ferry customers to and from the airport, rather than running them to the designated rental car center on a shuttle bus, FlightCar is leaving airport officials no real way to track who is coming from or going to the startup’s location.

“If we were, say, an investment bank, and we regularly sent town cars to the airport to pick up our clients, would we have to run a branded shuttle and give you 10 percent of our revenue? That wouldn’t make any sense,” Zaparde says. “So, where does the airport’s jurisdiction really end?”

Zaparde points out that FlightCar isn't getting off without shelling out any fees to the airport. Since SFO charges for-hire cars a $3.75 toll for using the property to collect customers, the startup often winds up paying $15 in fees—two for the renter’s rides to and from the airport, and two more for the car owner. On a “ballpark figure” average of $100 per rental, the company is already paying 15 percent of its take in fees, Zaparde argues.

Of course, as revenue goes up with more expensive and profitable rentals, that toll cost stays the same. But Zaparde says FlightCar is getting less for its lower fees, too—it can’t advertise in the airport since it’s not an officially blessed vendor, or run branded shuttles without paying for use of the rental car center, he says.

San Francisco airport officials don’t buy those arguments, of course.

In its lawsuit accusing FlightCar of unfair business practices, the airport said FlightCar’s move to an off-airport location didn't matter, because “as an off-airport rental car company that catered primarily to individuals traveling to and from SFO, FlightCar was still subject to its regulations.” Other rental car companies operating outside the airport property had also paid the required fees, officials noted. 

Airport officials also say FlightCar’s town car service defeats the point of its $430 million AirTrain system, which is intended to cut down on traffic congestion and pollution by funneling rental car customers to and from the airport on automated people movers. There’s plenty at stake for SFO in this fight, even if FlightCar is a small company at the moment. As noted in its lawsuit, the airport collected about $94 million in fees from rental car companies in the facility’s 2012 fiscal year, which represents more than 10 percent of the airport’s operating budget.

If a scrappy upstart can find a way to dodge those fees, the bigger companies might seek to follow suit, unless SFO enforces the regulations they’d all agreed to. The airport is asking a local judge to shut down FlightCar’s operations, and fine it for the business it has already conducted.

Officials at Boston’s Logan airport, meanwhile, appear to be taking a wait-and-see attitude. The airport notes that FlightCar does not have a contract in place to operate at Logan or pay its share of rental car taxes, but it hasn't moved as aggressively as San Francisco officials.

“They’re just waiting, I think, to see how the SFO lawsuit plays out,” Zaparde says. In the meantime, Logan officials quietly amended their regulations last fall to make clear that they consider “car sharing” or “peer-to-peer car service” companies the same thing as traditional rental car companies. 

Zaparde acknowledges that, like RelayRides, FlightCar could still compete with bigger companies even if it paid the fees that regulators want and followed all the rules. For him, the SFO battle is worth fighting because it could win car-sharing companies, with all their ostensible economic and environmental benefits, the right to be treated differently from the established industry.

“This sets the precedent of what happens at all the other airports,” he says. “We really do not believe that we should be treated just like a car rental company … that’s why we’re willing to go all out here to see what happens.” 

Rental car challengers aren't the only sharing-economy startups getting sucked into these kinds of fights. Since their networks have the potential to grow at the exponential speeds previously seen only online, they can surprise regulators and established competitors by emerging at a substantial scale without getting their permits in order.

Startups like Uber, Lyft, and Sidecar, which let people use their cars as unofficial taxi cabs, are some of the most prominent examples. Uber, which has raised more than $300 million in investment capital from big-name Silicon Valley backers, has caused a ruckus in many cities by taking on traditional taxi and town-car services. That’s brought battles with regulators and lawsuits from taxi companies around the country, upset that the startup doesn't follow the rules in a heavily regulated industry. 

Airbnb, a startup that has raised more than $325 million for its online platform that lets anybody rent out a room or their whole house to other consumers, has run into trouble with government officials who say the company is essentially operating an illegal hotel chain. New York’s state attorney general got serious about Airbnb’s operations, issuing a subpoena for the startup’s data last fall. 

The entrepreneurs behind these growing companies, inflamed by Silicon Valley’s libertarian-infused competitive attitude, have regularly rebelled against the regulators and competitors who want to rope them into the existing rules. But decisions like the one at RelayRides may also be signaling a new attitude of conciliation.

Just last week, Airbnb announced programs in New York and Portland, OR, in which the company would begin collecting lodging taxes from its hosts and sending the money on to state officials.

“This is new for us,” wrote Airbnb founder Brian Chesky, one of this generation’s iconic tech entrepreneurs. “And if it works well for our community and cities, we may replicate this project in other U.S. cities.”

Trial Car-2-Car System Helps To Anticipate Traffic Lights

As reported by Motor Authority: Car-2-Car and car-to-infrastructure technology will be a major factor in future autonomous driving systems, and several manufacturers have undertaken tests to get a handle on the technology. The latest to trial such systems is Honda, which is set to begin public road trials in Utsunomiya City, in the Tochigi Prefecture of Japan. Honda is one of several companies participating in a trial known as Universal Traffic Management Systems, which will eventually provide feedback on car-to-car and infrastructure systems before they go into practical use.  

As with other recent systems, one of the main functions is to pass traffic signal information between cars, feeding this back to the vehicle and the driver for more efficient travel through city environments. Using vehicle positioning and speed, as well as information on the next cycle of lights, a message can be sent to the driver suggesting the ideal speed to maintain to hit the next green light. If a red light is likely to show before the driver reaches an intersection, the system can advise the driver to slow down, conserving energy rather than having to brake at the last minute.

Like systems being tested by Audi, an indication can also be shown when the driver is waiting at a light, notifying them of when it will turn green. The driver can then be ready to pull away again before the light changes. The aim is to prevent unnecessary acceleration and deceleration--using extra fuel for little reason--and minimizing disrupted traffic flow in busy cities.

Honda's test will comprise five routes in the test city and as many as 100 vehicles. Honda has established that these routes are frequently used by commuters, providing realistic feedback on whether the car-to-infrastructure technology can make a real-world difference. By analyzing vehicle data, it'll also show whether any fuel or carbon dioxide savings result--a way of improving fuel consumption without any physical changes to the car.

Tesla Model S Is 'Low Hanging Fruit' For Hackers To Remotely Track Or Unlock Cars

As reported by Engadget: Tesla has toughened the Model S' underbody to help prevent any more fires, but apparently it needs to add some reinforcement to its network features too. An enterprising hacker can't quite drive one of the electric vehicles away (they'd need a key fob to start the car), but holes in the auto's security apparently allow a ne'er-do-well to locate the vehicle, unlock its doors and steal your belongings. As Tesla owner and corporate security consultant Nitesh Dhanjani tells it, this "low-hanging fruit" can be picked by brute-force attacking Tesla's relatively weak one-factor password system, exploiting loopholes in the iOS app's API and by accessing the ride's network-interface jack under the dashboard. Thankfully, he found that the Model S' major systems were safe from attack.

Dhanjani's submitted his findings to Musk and Co. and he advises current owners to take the precautions he's outlined to heart, specifically warning against using third-party apps. Tesla didn't respond directly to his concerns, but a spokesman has told Reuters that the company carefully reviews research provided by the security community.

X1-Class Solar Flare May Affect Communications, GPS on Wednesday

As reported by ComputerWorld:  The sun emitted what NASA is calling a "significant" solar flare on Saturday that could affect communications systems on Earth on Wednesday.

The National Weather Service's Space Weather Prediction Center is calling the eruption a radio blackout event. The center reported that the solar flare could affect satellites and cause GPS errors.

Electrical power lines could be hit by extra current, and high frequency communications could be blocked when the radiation hits Earth.

Solar flares are powerful bursts of radiation, according to NASA, but the harmful radiation from a flare cannot pass through the Earth's atmosphere to physically hurt humans. However, powerful flares can affect the Earth's atmosphere in the layer where GPS and communication signals travel.

NASA categorized Saturday's flare as an X1-class eruption. X-class solar flares are the most intense eruptions. The number adds more information about its strength. An X2, for instance, is twice as intense as an X1.

Last fall, the sun emitted a series of intense solar flares that caused radio blackouts and affected GPS systems.

Between Oct. 23 and Oct 30, the sun emitted four X-class solar flares.

Scientists said they weren't surprised to see an increase in solar flares since the sun is approaching the peak of the its normal 11-year activity cycle.

The largest flare in this current cycle was emitted on Aug. 9, 2011. That flare was an X6.9.

FCC votes to boost Wi-Fi

As reported by The Hill: The Federal Communications Commission (FCC) voted Monday to boost Wi-Fi capabilities by releasing more of the airwaves for use.

Increasing the capability of Wi-Fi “is a big deal,” FCC Chairman Tom Wheeler said during the commission’s monthly meeting.

“Faster connections, less congestion all make it easier to get online,” which creates “all kinds of new opportunities for entrepreneurs and innovators,” he said.

The unanimous vote frees up 100 MHz of airwaves in the lower part of 5 GHz spectrum band. Previously, the FCC reserved those airwaves for exclusive use by a satellite phone company.

The FCC vote opens those unlicensed airwaves so they can be used by consumer electronics equipment, including Wi-Fi routers. With the new airwaves, Wi-Fi equipment can handle more traffic at higher speeds.

“This items transforms the spectrum from virtually unusable to usable for Wi-Fi,” Wheeler said.

Commissioner Jessica Rosenworcel, who's a vocal advocate of opening up unlicensed airwaves to create opportunities for experimentation and innovation, pointed to unlicensed airwaves' economic benefit, which is already at $140 billion annually.

The move will benefit both Wi-Fi users and smartphone users who “offload,” or switch to Wi-Fi airwaves when their mobile networks are congested, she said.

Republican Commissioner Michael O’Rielly echoed the optimism about future innovative uses of Wi-Fi airwaves.

“The beauty of unlicensed spectrum … is that no one can predict with certainty what it will be used for,” he said.

Commissioners called for more unlicensed airwaves to further boost Wi-Fi capabilities.

“Let’s not stop here,” Rosenworcel said, calling on the agency to find space for unlicensed use in the 3.5 GHz and 600 MHz spectrum bands.

Members of the tech industry commended the FCC for its move to boost Wi-Fi.

“Wi-Fi is about to get bigger, better, and faster,” said WiFiForward in a statement. The trade group includes Google, Comcast, Microsoft and Best Buy.

“The FCC's action will create a new environment for experimentation, new business models, and better Wi-Fi,” the group said.

In a blog post Monday, Cisco, which builds Wi-Fi equipment that relies on unlicensed waves, said the FCC’s action “eliminated the ‘speed bump’” that capped the capabilities of Wi-Fi airwaves. 

“This will make it easier for all of us to consume a wide range of content on our mobile devices, most notably high definition video without frustrating lags or delays,” Cisco Director of Government Affairs Mary Brown wrote.

NHTSA To Require Rearview Cameras In New Vehicles

As reported by NPR: Years late, the Transportation Department issued a rule Monday that will require rearview technology in all new cars and many light trucks — an effort to reduce deaths and serious injuries caused by backup accidents.

The final rule issued by the National Highway Traffic Safety Administration will require all new vehicles under 10,000 pounds and built beginning May 1, 2018, to meet the new rear-visibility standards. The rule includes buses and trucks; motorcycles and trailers are exempt.

The rearview cameras can be mounted on many different parts of the vehicle somewhere on the rear of the car. They must give drivers a field of vision measuring at least 10 by 20 feet directly behind the vehicle. The system must also meet other requirements including dashboard image size, lighting conditions and display time.

Backup accidents involving light vehicles cause an average of 210 deaths and 15,000 injuries a year, and victims often are children and the elderly, the government said. Children under 5 years old account for 31 percent of the deaths each year, while adults 70 years of age and older represent about 26 percent.

NHTSA said the new rule, required in the Cameron Gulbransen Kids Transportation Safety Act, will save between 13 to 15 lives per year and prevent as many as 1,125 injuries annually. The measure, signed into law in 2008, was named for a 2-year-old Long Island boy whose pediatrician father backed over him in their driveway in 2002.

Although Congress passed the measure with strong bipartisan backing, delays in researching and writing the rules pushed the federal mandate past a number of deadlines. Critics charged that the government was reluctant to put additional financial burdens on the auto industry already crippled by an economic downturn, even though some manufacturers had started to install rearview technologies like sensor systems.

In the United States, 44 percent of 2012 models came with rear cameras standard, and 27 percent had them as options, according to the automotive research firm Edmunds.

"This day has been a long time coming, and we urge automakers to move quickly to beat the 2018 deadline," said Ellen Bloom, senior director of federal policy at Consumers Union.

The government estimates that a rearview system will cost between $132 and $142 per vehicle. For vehicles that already have a dashboard display screen, upgrading it to comply with the rule will cost less, about $43 each.

Compliance will be phased in by manufacturers starting in May 2016, before it becomes mandatory two years later.

"Today's decision will save lives and save money for consumers," said Jackie Gillan, president of Advocates for Highway and Auto Safety. "Every make and model will be required to meet this new safety standard and every family will benefit."

Researchers at the University of California, Irvine, started looking into the problem in the 1990s after noticing toddlers showing up in hospital databases of injured child pedestrians— many of them hurt or killed by vehicles backing out of home driveways.

In 1993, the NHTSA sponsored several studies that noted the disproportionate effect of backup accidents on child victims. One report explored sensors and cameras as possible solutions, noting the accidents "involve slow closing speeds and, thus, may be preventable."

If Ridesharing Is Banned, What About Ride-Trading?

As reported by SlashDot: The cab companies got Seattle to crack down on ridesharing companies by arguing that by letting drivers charge money for rides, they were essentially operating illegal unlicensed taxi services. So it's not hard to imagine other cities taking similar action on the same ambiguous legal grounds, as Los Angeles did in sending cease-and-desist notices to Uber, Lyft and Sidecar, ordering them to stop operating entirely.

I tried some of these services and actually never saw what the big deal was. Much of the time, they were almost as expensive as taxis, much too pricey to use on a regular basis, and I would never use them unless my own poor planning left me somewhere without my own car and desperate somewhere faster than public transit could take me. Perhaps cab companies were afraid of where the services were eventually headed -- especially towards a model where drivers could set their own prices. As far as I know, currently all ridesharing services set a minimum price per mile and don't let drivers set their rate any lower. But many drivers would probably be willing to drive at a price lower than what the app allows, and a set-your-own-price model probably really would put the cab companies out of business.

Perhaps some cities will take a more benign view of ridesharing in the long run, but as long as money is changing hands, (1) the city will certainly view it as within their rights to regulate the ridesharing industry, and (2) taxi companies will be able to argue, not unreasonably, that the companies are effectively running unlicensed taxi services. Of course the real solution would be for cities to stop limiting the supply of taxi medallions and artificially enriching cab companies at everyone else's expense (if the city's concern is with rider "safety", they could increase the number of taxi medallions while still requiring all drivers to take safety training). But that doesn't seem likely to happen any time soon. So instead, what if a company created an app that attempted to circumvent the legal restrictions, by allowing users to trade rides -- not for cash, but for returning the favor? 

Here's how it could work: When you sign up as a new user, you have a "miles" balance of zero. (The very first users of the system would have to start out with a nonzero balance, so that there are some units in the system to trade, but everyone who joins after that starts at zero.) You have to earn miles by giving someone else a ride before you can redeem your miles by getting a ride yourself. So you log in as a driver, and some other user "hails" you through their smartphone app, much as riders hail drivers through Uber or Lyft. You pick up a passenger and give them a ride to their destination, and at the end of the journey, they transfer a number of "miles" to you indicating how far you drove them. You now have a positive miles balance, and you can "spend" it by hailing a ride yourself later on. Drivers and riders could leave ratings for each other just as they do on Uber and Lyft. What Couchsurfing is to Airbnb, this service would be to Uber.

Since no money is changing hands, the arrangements would presumably not be covered by existing taxi statutes. You could even make an argument that a city couldn't pass a law regulating these ride-trades even if they wanted to, because as voluntary arrangements between consenting parties, they're protected under our First Amendment right of freedom of association! Of course, libertarians believe all commercial transactions between consenting parties ought to be exempt from regulation as well, but most state and local governments take a dim view of that premise. However, take money out of the equation, and you're on much stronger ground that your ride-trading arrangements aren't covered by existing laws.

(It is of course silly and inconsistent that the law often forbids selling something for money, but allows trading it for something of "value", or permits it if the nature of the trade is not made explicitly clear. If a girl sleeps with you and you occasionally "lend" her money, she's a high-maintenance girlfriend, but if she ever does you the courtesy of spelling out the arrangement explicitly, she's a prostitute and can go to jail. But as long as the government makes those silly and arbitrary distinctions, we might as well use them when they count in our favor.)

Would ride-trading with strangers be safe?

Well, when a rider pages a driver, the system could tell the rider the license plate of the car associated with that driver's profile, so unless the driver was in a stolen car, the system would always have a record of the license plate (and, hence, the owner) of any car that picked up a passenger. More generally, if I were a user in a system like this and someone told me it sounded unsafe, I would just say the same thing I always say about Couchsurfing (where I've hosted over 50 people with no bad experiences). Namely: "Look, have you or any of your friends ever gone home with someone you met at a bar? And that's fine, I'm not judging you, I'm just saying that was a hell of a lot more risky than meeting up with someone in a system where you can read other people's references." Besides, in many cities there's already thriving subculture of slugging -- picking up total strangers so you can use the carpool lane and they get a free ride.

I feel like I would be happy to have this ride-trading service available if I ever wanted a quick ride across town and didn't have my car. The only "cost" to me would be the cost of giving someone an equal-length ride at some other point in time when I wasn't in a hurry. (Or even giving someone a lift to a place that I was already going.) It's an efficient transaction because it lets me spend miles when my time is valuable, and then rack up the miles later on when I have some time to kill that's not as valuable. You can realize even more efficiencies by letting people pay "premium rates" for periods when demand is high (Friday and Saturday nights) or supply is low (early mornings when people need rides to the airport), so that the balance of miles that you pay for a ride may be greater than the actual number of miles traveled. 

On the other hand, there's an inefficiency in that the system cannot serve the needs of people who want a ride, but whose time is too valuable to spend it driving in order to "earn" the miles to redeem for the ride. This is a limitation in any system that bans money as a means of trade and only lets you trade a service for a repayment-in-kind of the same service. 

To environmentalists who would object that this promotes greater car usage: First of all, it might result in more impromptu car pooling over routes that were being inadequately served by buses, in which case the passengers were going to have to take cars anyway, so they might as well be piled into fewer of them. But in any case, I would actually take the bus more if a service like this existed. I live in Bellevue, about a 20-minute bus ride outside of Seattle, and I'd gladly take the bus in to Seattle if I was going to a specific destination close to the bus line, and knew I was coming right back afterwards. The problem is that once I'm in Seattle, if I want to get to some other arbitrary destination in Seattle, taking public transit is slow and annoying (and, you may have heard, often involves some waiting around in the rain). I drive my car in to Seattle not because I want to drive to the city, but in order to have a car while I'm there. If I could summon a ride in under two minutes to take me anywhere else in the city (with the only price being to return the favor to someone else later), I wouldn't need my car and could take the bus downtown.

So, even assuming a service like this would be useful, why would a company create it? We know how Airbnb and Uber make money, by skimming a cut off of each transaction. But how would a company make money just by connecting riders and drivers for complimentary rides through a free app? Well, Couchsurfing connects users for free stays in each other's houses, and they got venture capitalists to invest $22 million. The thinking seems to be that if even a free a service has enough users, it must be worth something. 

The major obstacle to deploying the system, is that the system would require a critical mass of users in any given city, before it could become effective. If there aren't enough drivers active in the city, then hailing a ride would take so long that after factoring in the delay, you might as well have taken the bus. You'd need enough drivers active to be reasonably sure that in any given neighborhood, you can catch a ride quickly -- and for the drivers have to be out in force, they have to know that there's a critical mass of riders who are ready to offer some miles in their balance for rides. Services that require a critical mass of users in order to be successful, are notoriously hard to get off the ground. If the project had the feeling of a social movement behind it -- in the spirit of resource sharing, as well as environmental friendliness insofar as people like me would be more likely to start using the bus -- perhaps the founders could sign up a base of users over time, prior to actually launching the service. And then once the number of enrolled users was large enough, could launch the live service with a critical mass of users already in place. (Of course, if they tried that out here, this being Seattle, most of those enrolled users who said they would show up, would probably flake out.)