Analysis
13 Apr 18

Ride hailing, the dark ride

Ride hailing companies may be relatively new to the mobility market, their impact is undeniable, and their claims of offering a sustainable mobility solution require a realistic counterweight by unveiling its darker sides as well.

Traffic congestion

Firstly, the role of ride hailing in traffic congestion is ambiguous. The most representative study for urban areas, the report of the UC Davis Institute of Transportation Studies (ITS) (2017), states that ride hailing increases traffic congestion. If ride hailing hadn’t been available, 49% to 61% of the trips would not have been made or would have been made by walking, biking or public transit. A similar conclusion was made by the Metropolitan Area Planning Council in the Boston Metro Area. The increase of the number of trips taken combined with ‘dead-heading’ miles to pick up passengers or waiting for a call, causes an increase in the number of vehicle travelled miles (VTM).

Pulling people out of public transit

What’s more, the competing position with public transit not only erodes the system but adds VTMs as well. According to the ITS, ride hailing is complementary to rail services (a 3% net increase in use in the surveyed cities) but substitutes for buses (a 6% reduction) and light rail services (a 3% reduction).

Shared ride hailing is even more likely to substitute bus services, combining the convenient features of public transit with the flexibility of personal transport. Lyft Line and UberPool offer shared ride hailing on adjusted pick-up points, so every passenger has to walk at most one or two blocks in order to reduce the pick-up time. Specifically targeted at commuters, Lyft Shuttle and UberHop offer shared ride hailing among fixed routes with fixed fares during the peak commuting times. UberCommute provides more flexibility by allowing riders and drivers to set up their own commuting route.

If you can’t beat them, join them

Pulling people out of public transit is disastrous for the environment, traffic congestion, gentrification, and for the public transit system itself. In order to address the changing revenue and passenger flow, cities approach ride hailing services to provide affordable transport services to its citizens. In the end, the best of both worlds are overall transit systems which include various means of transportation, from bike sharing and ride hailing to public transport, such as the application arisen out of a partnership between Uber and public transit in Memphis (Tennessee).

Apocalypse

The main argument to opt for public transit over ride hailing are the lower fares. However, ride hailing companies intend to lower the fares as much as possible, even becoming financially unsustainable. The ‘Metropocalypse’ in Washington DC (2016) demonstrated a prelude to the future position of ride hailing companies. After an emergency shut down of the metro system, followed by a year of reconstruction, Uber and Lyft filled the gap by offering cheap rides, even below the fare of a metro ticket, making metro ridership plunge.

However, these fares underscore the real cost of the ride: the driving costs are paid by the driver and the companies do not have to follow the same regulations as taxi companies. In some cities, Uber is even subsidised by local governments in order to complement public transit.

Regardless, Uber operates in an economic model that is currently unsustainable. The economist Justin Wolfers tweeted that prices will rise as soon as Uber reaches a monopoly position. How powerful Uber’s position might become once it reaches this status, is demonstrated by their practice of adjusting fares according to demand. During a London tube strike, prices were even surcharged as high as 450%. When Uber becomes the only option, it might become a very expensive one.

And it might be not the best one, considering its drivers, as there is no selection process based on skills, criminal records or safety and driving codes. Ride hailing drivers are typically self-employed. Nevertheless, ride hailing companies have started holding their drivers to higher standards in a bid to improve service and safety. To include ride sharing in corporate policies, this lack of regulation might become a problem, especially when considering insurance and liability issues.

Lighten up the dark side

Before adopting ride hailing massively, it might be interesting to take above remarks in consideration. In order to lighten up these dark sides, a company or public policy can eventually turn ride hailing services into a sustainable and feasible mobility solution.

Note on the report of the UC Davis Institute of Transportation Studies

Whereas the report of the UC Davis Institute of Transportation Studies (ITS) (2017) declares that companies as Lyft and Uber decrease traffic congestion, studies of the American Public Transportation Association (APTA) report (2016) and of the Pew Research Center (2016), state the opposite. However, the ITS study appoints that the APTA-report is biased because of the selection of the respondents, who are collected by car sharing and bike sharing companies, hence not being a representative selection of the overall population. On the other hand, the ITS study is based on a representative group of metropolitan respondents in seven major US cities.

Author: Fien Van den Steen