Why a rideshare adtech startup, chose Hot Dish over Deep Dish and left Chicago.
And how city leaders can avoid practices that stunt millennial business growth in their cities.
From All Over the Midwest, Millennials come to Chicago.
Many back home ask me if Chicago is as bad as it is made out to be in the press. Generally I answer no, and tell them about how great Chicago is. But recently, my opinion has changed. I moved to the northside of Chicago in the Fall of 2012 from Saint Paul, Minnesota to pursue a job offer and to see what life was like in the City of Broad Shoulders. Like many young people from the midwest, I have always loved visiting Chicago, the Mecca of the Midwest. Minneapolis however, is the Miracle according to The Atlantic’s @DKThomp.
“No other place mixes affordability, opportunity, and wealth so well. What’s its secret?”
Chicago is one great honey-pot where all of the driven and educated from Ohio, Indiana, and Wisconsin move. In Michigan, moving to Chicago is practically a right of passage between graduation but before marriage. In my case, Minnesota is a little further away, and has a solid diversified economy, but Chicago is still one of the few places that attracts people from the Twin Cities. They go for many of the same reasons I did, to gain experience, start their professional lives, experience a world-class city, and to hide from the arctic temperatures. Don’t get me wrong, Minnesota is cool — sometimes down right cold, but we don’t know what else is out there until we go live somewhere else. For us it is a choice. (FYI: For those considering Chicago, it isn’t much warmer.)
As many educated millennials move into the city, we flood Chicago from all over the midwest to concentrate in neighborhoods like Lakeview, Lincoln Park, Wicker Park, Bucktown, River North and Pilsen, bringing our sports teams, coffee shops, and culture with us. We come for the opportunity and stay for the summer festivals; we leave our farms, big 10 schools and cars behind. Chicago is our metropolis. It is where our future lives live. We are mid-western millennials and more importantly we are a movement.
Midwestern Millennials, choose Chicago. They are also choosing Rahm.
Rahm and others already know this. What may not be clear is that we also will not stand for the political abuses of power, we will not stand for taxi cab concessions…although we do love a good taxi cab confession. We will not stand for protecting defunct industries their associated businesses, we are not interested in allowing under-insured and unsafe drivers on the road. Most importantly, we F*#cking hate monopolies. Yes, I am looking at you, Comcast.
We know that the best of both worlds is technically possible, and we want city leaders that will protect us while respecting innovation. Not just for the larger revenue, or campaign contributions, but because it is the right thing to do when representing your constituents. Many millennials are voting for Rahm for mayor in 2015 in Chicago. However, that may change for Rahm and others if Chicago’s most famous legacy continues.
Chicago’s Rideshare Ordinance
Incorporating my business back home in Minnesota was initially fueled by Rahm issuing the Transportation Network Provider Ordinance on May 28th, 2014. The ordinance, which was supposed to go into effect on September 2, 2014, to legitimatize transportation network companies like Uber, Lyft, and SideCar while attempting to improve safety for passengers and drivers through regulation. Which is awesome…
However, unlike nearly every similar ordinance across the country, it also creates and protects a monopoly. To most people, the Rideshare Ordinance does not really matter. Which isn't surprising as it is not being enforced in the City of Chicago anyway. The only aspect that is being enforced at the moment is mandatory vehicle inspections which are required to be completed by February 25, 2015. There are still significant insurance gaps, although I hear that some insurance companies are already offering rideshare insurance in Illinois that might completely fill those gaps for drivers.
What parts of the Rideshare Ordinance are not being enforced today? (This is based on my own observations of using the uber application in Chicago, read the official rideshare ordinance and see if you can spot others.)
- Driver Identification Cards in the application
- Display of the Vehicle a Passenger Requests; including the license plate number, make, model, and year of the vehicle.
- The City’s 311 number to allow passengers to report complaints.
- Whether smoking is permitted in the vehicle.
- An option not to be rated by the driver.
- The surge price quote displayed in a dollar amount, fare estimate (with the multiplier displayed).
- Rideshare Company’s distinctive signage on exterior.
- City of Chicago emblem displayed on dashboard.
- Rideshare driver identification card on the driver
- Vehicle inspections — This should be resolved by Feb. 25th, 2015.
- Rideshare Companies are not supposed to be helping drivers secure vehicle financing (Uber is currently working with local dealerships and promoting their Uber “RideshareLoans.com is a great alternative for this.)
These things don’t bother me, most of them appear to be unnecessary regulations fueled by Big Taxi and potentially dealerships in Illinois. It is typical of Chicago, and Illinois in general, making laws but not enforcing them. What is bothersome for me personally, is that it appears there was a silent concession given to taxi companies and their advertising partners that didn’t enter the public debate.
9–115–120 Transportation network vehicles — Commercial advertisements prohibited. Commercial advertisements shall not be displayed on the exterior or in the interior of a transportation network vehicle.
Some may argue that this part of the ordinance is there to protect consumers. Wont somebody please think of the children? Although I don’t see how that could be considering according to creative mobile technologies there are at least 2,850 cabs with screen based advertising in the backseat of the vehicle out of the total of 6,100 cabs in Chicago and closer to 50% of the cabs have some form of external advertisement displayed on their vehicle. In addition to private use of dvd players and headrest mounted tablets.
The Chicago Rideshare Ordinance legalized ridesharing, a business model that was already openly operating throughout the City of Chicago. Rahm’s brother was an early investor in Uber and stands to make literally hundreds of millions of dollars from his initial 5–10 million dollar investment, so we shouldn't be surprised. Chicago works.
What I didn't expect was that it would create a defacto monopoly in rideshare advertising in the city by making cabs and taxis the only authorized public transportation vehicles (Outside of Metra and the CTA: Read Government) to display advertisements both inside and outside vehicles. Which happens to be a stream of revenue for Taxi companies and it also happens to make Chicago, the only city in America where my start-up Vugo cannot legally operate.
Solution: A Uniform Rideshare Ordinance
This problem has a simple solution. Create a uniform rideshare ordinance for cities and states to adopt, that takes the best from Chicago, Minneapolis, and other ordinances. While removing unnecessary filler.
That is why we have created RideshareOridnance.com — With a copy of the Minneapolis ordinance, as an example of a fair and unbiased rideshare ordinance for other cities to use as a template to form their own ordinance with safety in mind. Which is in stark contrast to Chicago’s Ordinance which is polluted with outdated requirements reminiscent of the 1980s. (A Driver identification card…in addition to a drivers license, and application based identification card).
Why do I care?
If more cities followed in Minneapolis’ foot steps, and created rideshare ordinances to protect the people, and not defunct industries. My business Vugo, would be allowed to operate uninhibited by unnecessary regulations. Unlike Uber, Lyft and others, Vugo respects the laws of the cities it operates in and will choose to bring the economic benefits of our platform to cities that play fair.
Rideshare Advertising for Everyone.
Vugo is a rideshare advertising service that displays advertisements inside rideshare vehicles that use transportation network applications to discover and pick-up passengers; i.e. Uber, Lyft, Sidecar, FlyWheel, and others. We partner with drivers and transportation companies to display advertisements in their vehicles. We pay rideshare drivers up to $3.00 per hour, in addition to their rideshare earnings to display advertisements in the back of their vehicles.
Ads are displayed after a proprietary determination of the passenger’s trip intent and demographics are analyzed. Vugo then displays the most relevant advertisement to influence the passenger into taking valuable action either by making a purchasing decision in the vehicle such as ordering pizza on the way home, at the destination by buying a new consumer product at the grocery store or by changing the destination to a competitor while on the way to make a purchase.
Vugo may remind people of “personal advertising” in Minority Report. They wouldn’t be far off, many of the things that are demonstrated in the film related to personal advertising are already in place online. Google started the revolution when it began to scan your emails to display relevant advertisements. Vugo hopes to bridge the gap between the internet and the real world through analyzing a passengers trip intent. Perhaps… in Google’s new self-driving cars, it also makes perfect sense that they are going to war with Uber over the rideshare business, because it is really an advertising business. Right @Google?
We charge our advertisers per impression, action, industry premium and location of the displayed advertisement. Vugo is an auction based platform allowing companies to compete in a transparent real-time advertising marketplace that benefits riders, advertisers and drivers. Rideshare Advertising for Everyone. ™
Can we launch our start up in the City of Broad Shoulders?
We had assumed that Chicago would be our home, considering it’s size, saturation of Rideshare applications, especially Uber.
Most of all, that it is the city where rideshare drivers make the least at $16.20 per hour, before taxes and expenses and would benefit the most from additional income from advertising revenue. Potentially the first raise for drivers… ever. Considering the quarterly cuts in Uber and Lyft’s raise to the bottom.
The fact that I live here and enjoy living in a world-class microcosm of America with unique characteristics like BYOB, Dibs, Deep Dish, Street Festivals, The L, Pilsen’s Murals, The Loop’s Skyscrapers, and ridiculously good food everywhere (Especially the Best Turkish Food in Chicago).
The team and I were looking forward to becoming one of the Chicago’s Start-up success stories. Sadly, the words of Atmosphere have never rang louder.
“…And it hit me, Minnesota is dope If only simply for not what we have but what we don’t…”
Minneapolis’ Rideshare ordinance allows us to operate without unnecessary government regulations. But that’s not all. Minneapolis in particular is a great place to start a company, a family, and hopefully in our case a legacy that puts Minnesota back on the map for giant tech companies. This isn't nostalgia for the frozen tundra, this is business. Chicago works, but Minnesota gets things done.
More importantly, outside of Vugo’s struggle. Millennials Don’t stand for protectionist business practices. We don’t stand for monopolies or for logical fallacies that appeal to emotion by inciting fear of safety concerns. (If you worry about children using ridesharing services and being exposed to advertisements use @hopskipdrive or @teamshuddle instead.)
Tell @RahmEmanuel , & other city leaders. #MillennialsSayNoToMonopolies
Please read the second part in our startup series, 15 [other] Real Reasons Why Minnesota is Dope for Tech Start Ups, and 3 irrelevant ones. Here.
P.S. Ari — Give me a call. Maybe you can helps us make Vugo legitimate in Chicago.
If you found value in this article, it would mean a lot to me if you hit the recommend button!
Introducing the Vugo Testing Team: Puppies
James Bellefeuille is co-founder of Vugo, a Rideshare Advertising Platform. You can sign up to be a driver or advertiser at www.GoVugo.com, this article was originally published on our blog at www.rideshareadvertising.com on February 17, 2015. You can follow us @Go_Vugo & @JLBellefeuille. Viewswagen is now Vugo.
