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The Uber and Lyft Revolution?

by Bruce Schaller (MPP '82)

Rarely do new companies burst into the transportation picture the way that Uber, Lyft and other app-based ride services have done since 2012. These two companies now transport 6.6 million passengers per day, roughly triple traditional taxicabs and about one-half the number of passengers traveling by local bus in the United States. What are they? How are they transforming urban transportation? What public policy responses, if any, are needed?

To understand what is happening, it's important to set aside the hype. Are Uber and Lyft a “new modality,” as some have claimed? Mostly, no. They look an awfully lot like traditional taxicabs: on-demand, exclusive-ride transportation from your doorstep to your destination. The ease and transparency of their services, however, have felt like a revolution to many customers. The apps show how long customers will wait for the driver to arrive and the intended route once in the cab, and enable automatic payment without fumbling for a credit card or cash. This transparency and ready availability has fueled unprecedented growth in cities across the United States and indeed, globally.

Unfortunately, what is good for the individual user—a quick and reliable way to get from A to B—is becoming problematic for society as a whole. In big, dense cities ranging from Boston, New York and Washington to San Francisco, Los Angeles and Seattle, there are concerns about the impacts of these new mobility services on traffic congestion and public transit systems. In New York City alone, Uber, Lyft and other “Transportation Network Companies” (TNCs) added over 600 million miles of driving to city streets from 2013 to 2016, as shown in my report, “Unsustainable?” released earlier this year (http://schallerconsult.com/rideservices/unsustainable.htm). Other researchers have found substantial increases in vehicle mileage due to TNC growth in San Francisco and the Denver area.

Many TNC users have switched from transit to TNCs. Fed up with slow, unreliable and crowded buses and trains, they now have the option of pulling out their smartphones and getting an Uber or Lyft. Other surveys have found that in big cities, only 10-25 percent of TNC users say they would have used a personal vehicle for the trip had a TNC not been available. The rest come from taxi, transit, walking, biking, or new trips not made otherwise. 
The original vision of “ride share” companies was that multiple passengers taking overlapping trips would fill empty seats in these vehicles and reduce congestion and vehicle emissions. That does not look to be happening. Even several years after introducing UberPool and LyftLine, the companies report at most 25 percent or so of their trips are pooled, and that is only in the country's big cities. Those gains are minimized by the fact that only a portion of each trip is shared and the vehicles still need to “dead-head” (without passengers) to the first pick-up. Furthermore, data from New York City shows that most pooled trips originate in low-income neighborhoods, not Midtown Manhattan where pooling is most needed to reduce congestion.

In sum, TNCs are definitely good for personal mobility, but are having serious impacts on cities as a whole. What is to be done?
There are many opportunities for public policy, and they are just beginning to emerge as more is understood about the role that TNCs are playing in our major urban areas.
The first thing to recognize is that TNCs are profoundly reshaping customer expectations for how people get around. The two fastest-growing mobility services in New York City are TNCs and bikes. Both are on-demand, rubber-tired modes providing point-to-point transportation. Their popularity shows that people care most intensively about the end-to-end customer experience. They care less than commonly thought about which mode. (Elected officials should take note and think twice about where light rail and streetcar investments are appropriate). 

The challenge to transit agency managers is to compete on service. Transit agencies need to systematically squeeze out the “pain points” of using transit, from knowing where the closest bus stop is to uncertain waiting times and jam-packed trains.

Municipal officials need to clear street space to speed up buses and enable them to maintain even spacing and thus to minimize waiting times and unreliability. They also need to confront head-on the inefficiencies of TNC service, namely far more vehicles driving around empty than are needed to service the next few passenger requests. Cities can assert control of their own streets to require TNCs and taxis alike to operate efficiently in congested areas.

Often the hardest part of moving in a new policy direction is finding traction to take the first step. The proliferation of TNC vehicles in our big cities offers opportunities to showcase solutions in focused areas, be it a downtown area, along a congested corridor, or through a congested intersection. Local officials can start by giving transit priority in these areas, establish pickup and drop off areas for TNCs and taxis, and enforce average vehicle occupancy minimums. Officials can show success in focused areas and then scale them up to larger areas. 

The rise of TNCs can be good for cities as a whole, but only if local officials leverage the opportunities TNCs have created. TNCs might not be a new mode, but they have transformed what people expect in the simple act of getting around town. 

Bruce Schaller is Principal of Schaller Consulting, based in Brooklyn, NY. An expert on issues surrounding the rise of new mobility services in major U.S. cities, he has served as Deputy Commissioner for Traffic and Planning at the NYC Department of Transportation, Policy Director at the NYC Taxi and Limousine Commission, and consulted on urban transportation issues across the United States.