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Published on August 9th, 2018 | by Steve Hanley

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Cities Say Uber & Lyft Increase Congestion. Are Taxes & Driver Caps The Answer?

August 9th, 2018 by  


We all know that ride-hailing services like Uber and Lyft are supposed to reduce urban congestion. Using a ride hailing service, the argument goes, means people leave their cars at home. Fewer cars, less congestion. Simple as pie. Except studies in several major world cities show that’s not what happens in the real world.

Ride Hailing And Congestion

Research led by Regina Clewlow at the University of California — Davis surveyed ride-hailing customers in Boston, Chicago, New York, Seattle, San Francisco, Los Angeles, and Washington, D.C. “We found that a large portion of travelers are substituting ride-hailing in place of public transit, biking, and walking trips, or would not have made the trips at all,” Clewlow writes in her introduction to the results of the research.

ride hailing travel study

How ride-hailing users in six large U.S. cities would travel if Uber or Lyft were unavailable. Source: Regina R. Clewlow and Gouri Shankar/University of California Davis

“These trips, which are being substituted for or generated by ride-hailing, are most likely adding vehicles to the road in major metropolitan areas. There is a significant need for future research on the topic — the most recent findings from major cities seem to suggest that ride-hailing is likely adding to, not reducing traffic congestion.” (Emphasis added.)

The biggest impact noted by the researchers was a drop in the use of public transportation — which averaged 6% in all cities studied. Between 49% and 61% of trips would not have happened at all if ride-hailing services were not available or would have been made by using public transportation, or by walking or riding a bicycle. The researchers say the total number of miles driven in the cities surveyed — a metric frequently used by researchers to estimate congestion — went up due to the availability of Uber and Lyft rather than down as might be expected.

That conclusion is supported by other research by Andrés Gómez-Lobo and Alejandro Tirachini of the University of Chile. After running 20,000 computer simulations based on actual data from the city of Santiago, they found the probability that ride-hailing reduces vehicle kilometers traveled in that city is 0%. Ride-hailing services never produced fewer vehicle kilometers traveled than the same simulation without them.

In order for Uber, Lyft, and other ride-hailing services to actually reduce congestion, the average vehicle occupancy has to be at least 2.9 people. In reality, it is generally 2 — one driver and one passenger. “While not definitive, the conclusions of Tirachini and Gomez-Lobo provide an indication that ride hailing may be beneficial for users but, in its current form, is not sustainable for the planet or helping to solve congestion and road safety problems,” writes Dario Hidalgo, director of the Integrated Transport Practice at the World Resources Institute’s Ross Center for Sustainable Cities.

Is Ride-Hailing Really What Cities Need?

But wait — weren’t ride-hailing services supposed to free us from crushing congestion while providing opportunities to ordinary people to earn a living by driving other people around? Aren’t ride-hailing services already doing billions of dollars worth of business in cities around the globe already, especially in China? What is the point of ride hailing at all if the benefits promised are illusory?

In the Santiago survey, the researchers found the most important factors that motivate people to use Uber were “the ease of payment, cost, transparency of the charging system compared to taxi meters, and the possibility of identifying the driver and rating his/her performance. Other important motives included short wait times, lack of convenient public transportation, not wanting to drive after drinking alcohol, and the perception of the service being more secure than other modes,” according to a report by The City Fix.

All those are valid factors. Taken together, they constitute more of an indictment of conventional urban mobility options than an endorsement of ride-hailing services. The first rule of any business is to find out what customers want. The second rule is to give it to them. Conventional strategies are clearly not providing urban residents with what they want.

NYC To Cap Ride-Hailing Licenses

The New York City council voted this week to cap the number of licenses available for Uber, Lyft, and other ride-hailing service drivers at 100,000 for one year. The move is intended to give the city time to investigate the impact that ride-hailing is having on the city so it can craft appropriate regulations to protect the interests of the public and the drivers.

The so-called gig economy is turning out to be somewhat less of a boon to the people who pursue app-based businesses as a way of earning income than it was assumed it would be a few years ago. Ride hailing is cutting into the profits of taxi companies, but many Uber and Lyft drivers find at the end of the week their take-home pay is not enough to make ends meet. Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, tells The Guardian that companies such as Uber and Lyft who use technological innovation are dependent on “sweated labor” and  are “destroying lives and livelihoods across the planet.”

And there’s a cultural component to ride hailing, one that is seldom discussed. People of color in New York City often find there are no taxis in their neighborhoods. Stories of black people being ignored by traditional taxis are legion. The city council vote has riled up Reverend Al Sharpton and his supporters, who claim Uber and Lyft are the only mobility options available to many people of color. But Laurie Cumbo, a Democrat on the city council, said Uber will still be available despite the moratorium on new cars. “Uber as you know it is going to be Uber as you know it,” she said. “You’re not going to be stranded. Uber is not going away.”

Taxation As A Policy Tool

One tool that cities have to control ride-hailing services is taxation. According to a blog post by the World Resources Council, taxes can be used as a policy tool to encourage ride-hailing services to lower congestion and emissions or provide reduced fares so lower-income people can access public transportation. One objection to the taxation schemes rolled out so far is that many of them go to general operating revenues or other things that have little to do with providing efficient mobility services to city residents.

ride hailing taxation

As a policy guide, Shared Mobility Principles.org offers this overarching guidance: “Every vehicle and mode should pay their fair share for road use, congestion, pollution, and use of curb space. The fair share shall take the operating, maintenance and social costs into account.” An excellent sentiment but one that is hard to put into practice.

Is It Time To Rethink Ride Hailing?

There is a general assumption that ride-hailing services are a good thing — good for cities, good for congestion, good for lowering emissions, and good for people who drive for ride-hailing companies. The most recent research challenges all those assumptions and suggests ride hailing may just make cities even more crowded than they already are. Clearly, some rethinking of the app-based ride-hailing phenomenon is in order. That is precisely what New York City proposes to do over the next 12 months.


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About the Author

Steve writes about the interface between technology and sustainability from his home in Rhode Island and anywhere else the Singularity may take him. His muse is Charles Kuralt -- "I see the road ahead is turning. I wonder what's around the bend?" You can follow him on Google + and on Twitter.



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