Farhad Manjoo, New York Times
STATE OF THE ART JUNE 11, 2014
With a near recordsetting investment announced last week, the ride-sharing
service Uber is the hottest, most valuable technology startup on the planet. It
is also one of the most controversial.
The company, which has been the target of protests across Europe this
week, has been accused of a reckless attitude toward safety, of price-gouging
its customers, of putting existing cabbies out of work and of evading
regulation. And it has been called trivial. In The New Yorker last year, George
Packer huffed that Uber typified Silicon Valley’s newfound focus on “solving
all the problems of being 20 years old, with cash on hand.”
It is impossible to say whether Uber is worth the $17 billion its investors
believe it to be; like any startup, it could fail. But for all its flaws, Uber is
anything but trivial. It could well transform transportation the way Amazon
has altered shopping — by using slick, user-friendly software and mountains of
data to completely reshape an existing market, ultimately making many modes
of urban transportation cheaper, more flexible and more widely accessible to
people across the income spectrum.
Uber could pull this off by accomplishing something that has long been
seen as a pipe dream among transportation scholars: It has the potential to
decrease private car ownership.
In its long-established markets, like San Francisco, using Uber every day
is already arguably cheaper than owning a private car. Uber says that despite
dustups about “surge pricing” at busy times, its cheapest service, UberX, is
usually 30 percent less expensive than taxis.
Now that Uber, Lyft and other rivals are embroiled in a vicious match for
dominance across the globe, ridesharing prices over all are sure to plummet.
The competition is likely to result in more areas of the country in which ride-sharing becomes both cheaper and more convenient than owning a car, a shift
that could profoundly alter how people navigate American cities.
Over the next few years, if Uber and other such services do reduce the
need for private vehicle ownership, they could help lower the cost of living in
urban areas, reduce the environmental toll exacted by privately owned
automobiles (like the emissions we spew while cruising for parking), and
reallocate space now being wasted on parking lots to more valuable uses, like
housing.
Paradoxically, some experts say, the increased use of ride-sharing services
could also spawn renewed interest in and funding for public transportation,
because people generally use taxis in conjunction with many other forms of
transportation.
In other words, if Uber and its ride-sharing competitors succeed, it
wouldn’t be a stretch to see many small and midsize cities become
transportation nirvanas on the order of Manhattan — places where forgoing
car ownership isn’t just an outré lifestyle choice, but the preferred way to live.
“In many cities and even suburbs, it’s becoming much easier to organize
your life car-free or car-lite,” said David A. King, an assistant professor of
urban planning at Columbia University who studies technology and
transportation. By carlite, Dr. King means that instead of having one car for
every driver, households can increasingly get by with owning just a single
vehicle, thanks in part to tech-enabled services like Uber.
Transportation scholars are just beginning to study whether the ride-sharing
industry will encourage us to give up our cars, but results from some
related studies look promising.
Susan Shaheen, the codirector of the Transportation Sustainability
Research Center at the University of California, Berkeley, has found that carsharing services like Zipcar and bike-sharing services have already led to a
significant net reduction of car ownership among users. While she is beginning
a study into whether Uberlike services have the same effect, she said it was
plausible to guess that they would also reduce levels of car ownership.
“I’ve been studying this area for about 17 years, and what we’re seeing
now is a ubiquity of mobile devices that is really altering this industry,” she
said.
To see why Uber and its ilk could prompt many of us to give up our cars, it
helps to understand the role that taxis play in urban transport. Taxis and other
car services are usually seen as the province of the rich, but that’s only partly
true, studies show.
The richest Americans do use taxis more often than middle-class
Americans, but so do the poorest Americans, who rely heavily on taxis for trips
that aren’t practical through public transportation — shopping trips that
involve heavy parcels that wouldn’t be convenient to take on the bus, say, or a
ride back home after a medical procedure.
And though you may think of taxis as a competitor to subways and buses,
several studies have found just the opposite.
In one recent study based on GPS data from New York City cabs, Dr. King
and his colleagues found that many taxi trips are “multimodal,” meaning that
riders mix taxis with other forms of transportation. For instance, people from
other boroughs might get to Manhattan by train, and then use cabs to return
home late at night.
“The oneway travel of taxis allows people to use transit, share rides and
otherwise travel without a car,” the researchers wrote. “In this way taxis act as
a complement to these other modes and help discourage auto ownership and
use.”
A survey commissioned by regulators in San Francisco found that if taxis
were more widely available, people would use public transit more often, and
would consider getting rid of one or more cars.
There’s only one problem with taxis: In most American cities, Dr. King
found, there just aren’t enough of them. Taxi service is generally capped by
regulation, and in many cities the number of taxis has not been increased
substantially in decades, despite a vast increase in the number of miles people
travel. In some places this has led to poor service: In the San Francisco survey,
for instance, one out of four residents rated the city’s taxi service as “terrible.”
Ride-sharing services solve this problem in two ways. First, they
substantially increase the supply of for-hire vehicles on the road, which puts
downward pressure on prices. As critics say, Uber and other services do this by
essentially evading regulations that cap taxis. This has led to intense
skirmishes with regulators and questions over who has oversight to maintain
the safety of the blossoming new industry.
These questions are likely to be worked out as these services mature; like
most new technologies, this one too will attract increased legal oversight and a
gradual regulation of the business.
But Uber has done more than increase the supply of cars in the taxi
market. Thanks to technology, it has also improved their utility and efficiency.
By monitoring ridership, Uber can smartly allocate cars in places of high
demand, and by connecting with users’ phones, it has automated the paying
process. When you’re done with an Uber ride, you just leave the car; there’s no
fiddling with a credit card and no tipping. Even better, there’s no parking.
Compared with that kind of convenience, a car that you own — which you
have to park, fill up, fix, insure, clean and pay for whether you use it or not —
begins to seem like kind of a drag.
“And if your car sits there five out of seven days, suddenly you’re starting
to look at that fixed cost as being a waste,” Dr. King said.
Email: farhad.manjoo@nytimes.com; Twitter: @fmanjoo
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