Disruptive technologies can reshape industries, and in Las Vegas, ridesharing services like Uber and Lyft, along with Airbnb, have made a significant impact on taxis and possibly hotels.
In July 2014, Nevada cab drivers gave over 2 million rides. This July, that number was down to about 1 million—nearly half.
But there are signs things might be shifting back.
Uber prices are rising and so are short-term rental prices, motivating some customers to turn to traditional services. Cities are also cracking down on short-term rental violations, issuing hefty fines to operators who break the law.
Could we be seeing a return to traditional services, or will both industries continue to exist alongside each other for the foreseeable future?
RIDESHARE
Andrew Gnatovich is a longtime former cab driver and current part-time Uber driver in Las Vegas. He also formerly wrote a decently followed blog, Las Vegas Cabbie Chronicles.
Gnatovich thinks the advent of the rideshare industry in the early 2010’s is a huge reason for the decline in taxi usage today. He also thinks rideshare companies need more regulation.
“The state background check that cab companies require for drivers is significantly more robust. They even require fingerprints,” Gnatovich said.
Nevada Public Radio reached out to multiple cab companies but did not hear back in time. Major rideshare companies, Uber and Lyft sent these responses:
Lyft: All drivers must undergo robust, multi-tiered criminal background checks, and we continuously monitor for criminal convictions and driving record violations. In addition, Lyft requires all drivers to complete community safety education, developed in partnership with national safety organizations.
Lyft also does not use fingerprint-based checks for two core reasons: fingerprinting relies on a federal database that is unreliable and incomplete, and it is shown to have potential discriminatory effects on minority communities.
Uber: Under existing law, Uber is required to carry more than twice the amount of insurance as taxis, conduct annual background checks on every driver, and pay more than $1 million in annual fees on top of the state's excise tax.
Hundreds-of-thousands of Nevadans rely on rideshare, and we don't think we should turn the clock back to the days where reliable transportation was reserved for tourists on the Las Vegas strip.
Mark Tremblay, UNLV economics professor, said digital companies like Uber and AirBnB started out very consumer friendly in pricing, but it’s no surprise they’ve since raised prices.
“Uber wanted to attract a lot of drivers and riders. When they entered a city, they kept their margins low,” he said. Tremblay said.
“I think they've [raised prices] very slowly, but it's picked up more recently, and I don't know if that trend will necessarily continue. If you raise prices too high, someone else can come up with Uber, too, and attract drivers and riders at lower prices. So we'll see what the equilibrium looks like in the end.”
SHORT-TERM RENTALS
Since the advent of the short-rental industry, many have asked how it’s impacted or hurt the Las Vegas resort industry.
Amanda Belarmino, UNLV College of Hospitality professor, said the two industries don’t compete for the same customer.
“(Short-term rentals) serve underserved markets. Families are not well served by traditional hotels or by traditional hotel casinos in Las Vegas,” she said. “Many of [them] are people that are relocating here. That's not a person that you necessarily want in a casino hotel because they're trying to go to work and not going to be gambling, or eating every meal at your restaurant.”
If anything, she said, short-term rentals are adding to the economy rather than subtracting from it.
Belarmino added that while short-term rental prices are generally higher than hotel prices, short-term rentals often provide more amenities, accessibility, and privacy.
However, Belarmino sees a potential drawback to short-term rentals: rising home prices.
“I think the bigger impact we see is the perceived impact on housing prices, because investors are purchasing the homes instead,” she said. “But we see that in every market that Airbnb goes into.”
Pius Egu, is a short-term rental owner and host and member of the Greater Las Vegas Short Term Rental Association. He got into the business around 2016 out of desperation.
“I was a student trying to pay my tuition, and the job that I had at the time basically shut down,” he said. “Then, luckily, one of my roommates was moving out, and I put his room up on Airbnb and made 1,100 bucks in seven days. The rest was history.”
Egu said his customer base varies, and it’s often people who don’t want to stay in a resort hotel in the first place. Some conventioneers “want a kitchen, fast wi-fi and be able to wash their clothes.”
Some aren’t here for business or tourism at all. They’re here to visit family.
“I've had families that had a son in the military at [Nellis Air Force Base], and he couldn't get leave for Thanksgiving,” Egu added, “so they decided to come and have Thanksgiving with him instead.”
Guests: Andrew Gnatovich, former cab driver; Mark Tremblay, professor of economics, UNLV; Amanda Belarmino, associate professor of hospitality, UNLV; Pius Egu, short-term rental property owner, member, Greater Las Vegas Short Term Rental Association
