To Get Uber, We’re Gonna Have To Get Bigger
By David Ryan Palmer | 1/14/2015
Uber, the ride-sharing application that lets taxi seekers and freelance drivers connect, has come to New Orleans, Baton Rouge, Houston, Dallas, and Austin. Every metropolitan area within eight hours of Lake Charles has this new - some would call revolutionary - service. It’s not just ride-sharing, there are several emerging convenience-innovations available today. Cover, a restaurant pay service, allows diners to easily split a check straight from their smartphone at restaurants that register with the service. Handy is an app that connects people who need simple handyman work with experienced, licensed professionals who have been vetted through the service within minutes.
These apps and services are popping up in larger cities all over the United States and the rest of the world. In almost every instance, however, there is a limiting factor on where these kinds of services will spread: population. Uber works by connecting drivers who have the time and ability to reach to people who need a ride and adjusts its fares according to supply and demand. Handy works by connecting people with experience with people who need small things done, like hanging pictures correctly or light plumbing. Both limit their services to larger markets, because in order for the services to work, there has to be a pool of labor to draw from.
Apps like Uber, Cover, and Handy Require Metropolises
With the incoming Sasol expansion, the Golden Nugget opening, and the flood of new workers and families in the Lake Charles area, when does that happen? There has to be a threshold where outside interests, like these start-ups, begin seeing Lake Charles as a resource to be mined, instead of a dot on a map between the juggernauts of Houston and New Orleans.
It might be as simple as increasing population. According to the 2010 census, the entire state of Louisiana held about 4 million people, give or take. The population of New York City alone (where Cover was based, and the second city that Uber’s taxi service rolled out) came in at about 8 million people. Uber recently moved into New Orleans, a city that houses more than 375,000 in 2013. That’s more than five times the population size of Lake Charles, which clocked in at a little over 74,000 people in 2013.
From a Pure Numbers Standpoint, Lake Charles and Calcasieu Parish Do Not Have What It Takes Right Now In Order to Successfully Lure Uber and Its Ilk to This Region
Pure numbers, however, don’t tell the whole story. David Conner is the Vice President of Economic Development and International Commerce with the Southwest Louisiana Economic Development Alliance. The Alliance is set to release a report in February on predicted economic and population growth in the five-parish area. Conner was able to provide some preliminary data and statistics, as well as a few anecdotal nuggets that show Lake Charles and the surrounding areas may have an edge outside of population growth.
Chief among those, he says, are the megaprojects. “Right now, our projections for permanent new employment opportunities is just under 21 thousand,” Conner said. “With that growth in permanent jobs we expect to absorb, within our current population, some six or seven thousand people.” Typical household sizes in the five-parish area are around 2.5 people. This is simple statistics, but when you've got six or seven thousand people coming in with their families, it adds up quickly. “You’re looking at a population growth in the 30,000 range, just with current projected projects,” Conner said.
“New construction workers will be on a bell curve that’s already started to increase. There will be a total construction workforce, total jobs, not people, in the 35,000 range. We expect to see it peak in 2017 with about 17 to 18,000 people,” he continued.
The numbers that the Alliance gathered are for the five-parish area as a whole, including small cities like DeRidder, which had a population of just over 10,000 in 2013. Lake Charles is still the center of commerce and entertainment in the region, and that means many of those people will either live in the lake city or at least be on the streets at some time. Couple that with increased tourism from Golden Nugget and L’auberge, and the opportunities not just for businesses like Uber, Handy, and Cover increase, but also for smaller businesses in Lake Charles, like the ever popular KD’s Diner, antique shopping throughout the city, or entertainment venues like Luna Live in old Downtown.
“This is as good an opportunity for local existing businesses as we've seen in our lifetimes in southwest Louisiana. This is a projected growth that, when you’re talking about capital investment on these projects, we are now at about $84 billion,” Conner said. “Not that all of these will definitely happen. But even if nothing else happens, just under $40 billion in projects have already started.”
Keeping Up With Demand
That definitely puts Lake Charles on the map for companies like Uber. In order for the area to take the next step towards a real metropolitan powerhouse, however, infrastructure such as roads and highways will have to be rethought, to a degree.
“You’ll have a demand on our local small businesses that is probably a demand that can’t be met with current capacity. We expect to see influx of either new expansions of current businesses or new businesses in the area,” Conner said.
In order for new economic enterprises like Uber, Cover, Handy, and other technology driven, independent contractor entities to work in Lake Charles, the Lake City itself might have to step up its game. To do that would require investment not only from outside sources, but perhaps from inside the city. That could take the form of increased public income to make the area more enticing to new people. It could look like lowered property taxes to encourage out of area home buyers to put down roots here.
“For two years we’ve had mega-developers in town that would not normally look at our area,” Conner said. “With that, I think that movement is why our commercial developers that are starting to come our way.”
In any case, the five parish area, and Lake Charles in particular, will see some increased traffic on roadways, which could catch the attention of Uber, who sees the market largely in terms of supply and demand.
“We do expect some stress, obviously, in transportation. Just as a kind of anecdotal support to that, we are expecting to have a need for large numbers for temporary housing of some sort. Local law enforcement here sees not your typical concerns like crime and school capacity and grocery store capacity in the area. Their biggest concern is traffic issues, rather than crime,” Conner said.
Better roads mean better opportunities to get on those roads, which means more people shopping and spending money. That money could go towards apps like Uber, regardless of the population size of the city. As Lake Charles and the five parish area grows, it will need to keep an eye on other cities, and see how those metropolises deal with increasing demand for services, in order to fully move into the next level of city-dom.
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