I am writing this post on a Porter flight from New York back to Toronto.
For my last day in New York, my close friend and I rented scooters and rode all around Manhattan and Brooklyn. It was a great way to cover a lot of ground, but also a great way to still absorb the city. It’s harder to do the latter in a car and I never have any desire to drive in New York.
Because the great thing about New York is that as a pedestrian you feel like you control the streets. When you’re waiting at a crosswalk, you’re never actually waiting. You walk off the sidewalk and onto the street so that you can assert yourself in front of the cars and wait for an opening. This serves to narrow the portion of road that the cars can actually drive on and reminds the drivers who is boss.
At the same time, there are many instances throughout the city where New York has purposefully reallocated the space dedicated to pedestrians (and cyclists) and the space dedicated to cars. They’ve created new public spaces, widened the areas where people can walk, and seemingly blanketed the city with bike lanes. And that makes a lot of sense given that in many (most?) areas of the city, pedestrians greatly outnumber cars.
So does that mean New York is at war with the car? (I’d be curious to know – in the comment section below – if those kinds of discussions take place in the city.)
I suppose you could spin it that way. But New York also does things for cars. While riding around on the scooter today, I was so impressed by how well timed the streetlights were along the avenues. It made it incredibly easy to go downtown or uptown. In Toronto, I often feel like we time our lights to make driving as slow as possible.
But make no mistake; New York is not a driving city.
New York is about walking, biking, taking transit, and hailing cabs. There is a reason they have the highest transit ridership in the US. The city is built for it. And unless driverless cars and ride sharing completely changes the equation, I will continue to believe that transit is the most efficient backbone for any big city.
A few days ago, Bill Gurley – who is an investor in Uber – wrote a really fascinating blog post called, Uber’s New BHAG (Big Hairy Audacious Goal): UberPool. Bill doesn’t update his blog very often, but when he does it’s incredible stuff.
I’ve touched on UberPool briefly before. But basically it’s a true “ride sharing” service where people with overlapping routes can easily share the same car – much like people do today informally. The obvious advantage of this is cost. It’s cheaper to share.
What’s most fascinating about this service though is how it fits into Uber’s larger mission to drive transportation costs down. And there’s a specific reason for that (via Bill Gurley):
When Uber launched its low-cost UberX offering in the summer of 2012, the company quickly realized that the demand for its transportation services is HIGHLY elastic. As the company achieved lower and lower per-ride price points, the demand for rides increased dramatically. A lower price point delivered a much better value proposition to the consumer, yet still remained a great business decision due to the remarkable increase in demand.
So what Uber quickly figured out was that if they could increase the utilization rate for drivers (the time actually spent with passengers), they could charge consumers lower prices while at the same time maintaining driver salaries. Prices went down, but volume went up.
One way to do that is to obviously decrease driver downtime by improving liquidity on the marketplace. But another way is to simply increase the number of passengers being transported at one time. Hence the creation of UberPool.
But it doesn’t stop there.
Because of all the transportation data that Uber now has (the company has a data group called the “math department”), they can fairly accurately predict what a price cut will do to their ridership levels. This allows them to “forward invest” their capital in new services – such as UberPool – before they even have the revenue from the anticipated increase in ridership.
So what does this all mean?
It means that Uber is going to get cheaper and cheaper and cheaper. Uber is trying to get to what they call “The Perpetual Ride”, which basically means that drivers will always have customers (100% utilization). That’s quite a goal, but it would mean the absolute lowest prices for consumers (barring any other changes to their cost structure).
Dirt cheap transportation is a pretty compelling value proposition, which is why I continue to believe that cities should be hard at work trying to figure out how to harness this transportation shift.
If you’re interested in this topic, I would encourage you to give Bill Gurley’s blog post a read.
Earlier this month, Bloomberg published this map showing where Uber operates and where it’s been banned (or is being challenged). You can click on the map for a larger version.
Uber operates in about 250 cities across the world. But it’s being challenged in a lot of them, including Portland, San Francisco, Los Angeles, Toronto, Rio de Janeiro, Paris, Berlin, as well as others.
I don’t want to dismiss any of the safety concerns that have arisen lately, because those are very serious and they need to be addressed. Life safety is paramount. But I continue to believe that banning a service that many people clearly want to use isn’t the right solution.
On top of that, I think it could lull many of the local taxi communities into a false sense of security about the future. Uber is moving incredibly quickly. UberX launched in Toronto in September of this year. And UberPOOL – their new carpool service – is likely next.
With these releases, Uber is working towards a specific vision for the future: Their goal is to eliminate the need for private vehicle ownership. Should they be successful, this will not only impact taxis, but also car manufacturers and urban mobility in its entirety.
So as difficult as it might seem right now, I think urban leaders would be better served trying to figure out how to harness these innovations. Cities have been trying for decades to get people out of their cars. Uber wants to do the same.
I am writing this post on a Porter flight from New York back to Toronto.
For my last day in New York, my close friend and I rented scooters and rode all around Manhattan and Brooklyn. It was a great way to cover a lot of ground, but also a great way to still absorb the city. It’s harder to do the latter in a car and I never have any desire to drive in New York.
Because the great thing about New York is that as a pedestrian you feel like you control the streets. When you’re waiting at a crosswalk, you’re never actually waiting. You walk off the sidewalk and onto the street so that you can assert yourself in front of the cars and wait for an opening. This serves to narrow the portion of road that the cars can actually drive on and reminds the drivers who is boss.
At the same time, there are many instances throughout the city where New York has purposefully reallocated the space dedicated to pedestrians (and cyclists) and the space dedicated to cars. They’ve created new public spaces, widened the areas where people can walk, and seemingly blanketed the city with bike lanes. And that makes a lot of sense given that in many (most?) areas of the city, pedestrians greatly outnumber cars.
So does that mean New York is at war with the car? (I’d be curious to know – in the comment section below – if those kinds of discussions take place in the city.)
I suppose you could spin it that way. But New York also does things for cars. While riding around on the scooter today, I was so impressed by how well timed the streetlights were along the avenues. It made it incredibly easy to go downtown or uptown. In Toronto, I often feel like we time our lights to make driving as slow as possible.
But make no mistake; New York is not a driving city.
New York is about walking, biking, taking transit, and hailing cabs. There is a reason they have the highest transit ridership in the US. The city is built for it. And unless driverless cars and ride sharing completely changes the equation, I will continue to believe that transit is the most efficient backbone for any big city.
A few days ago, Bill Gurley – who is an investor in Uber – wrote a really fascinating blog post called, Uber’s New BHAG (Big Hairy Audacious Goal): UberPool. Bill doesn’t update his blog very often, but when he does it’s incredible stuff.
I’ve touched on UberPool briefly before. But basically it’s a true “ride sharing” service where people with overlapping routes can easily share the same car – much like people do today informally. The obvious advantage of this is cost. It’s cheaper to share.
What’s most fascinating about this service though is how it fits into Uber’s larger mission to drive transportation costs down. And there’s a specific reason for that (via Bill Gurley):
When Uber launched its low-cost UberX offering in the summer of 2012, the company quickly realized that the demand for its transportation services is HIGHLY elastic. As the company achieved lower and lower per-ride price points, the demand for rides increased dramatically. A lower price point delivered a much better value proposition to the consumer, yet still remained a great business decision due to the remarkable increase in demand.
So what Uber quickly figured out was that if they could increase the utilization rate for drivers (the time actually spent with passengers), they could charge consumers lower prices while at the same time maintaining driver salaries. Prices went down, but volume went up.
One way to do that is to obviously decrease driver downtime by improving liquidity on the marketplace. But another way is to simply increase the number of passengers being transported at one time. Hence the creation of UberPool.
But it doesn’t stop there.
Because of all the transportation data that Uber now has (the company has a data group called the “math department”), they can fairly accurately predict what a price cut will do to their ridership levels. This allows them to “forward invest” their capital in new services – such as UberPool – before they even have the revenue from the anticipated increase in ridership.
So what does this all mean?
It means that Uber is going to get cheaper and cheaper and cheaper. Uber is trying to get to what they call “The Perpetual Ride”, which basically means that drivers will always have customers (100% utilization). That’s quite a goal, but it would mean the absolute lowest prices for consumers (barring any other changes to their cost structure).
Dirt cheap transportation is a pretty compelling value proposition, which is why I continue to believe that cities should be hard at work trying to figure out how to harness this transportation shift.
If you’re interested in this topic, I would encourage you to give Bill Gurley’s blog post a read.
Earlier this month, Bloomberg published this map showing where Uber operates and where it’s been banned (or is being challenged). You can click on the map for a larger version.
Uber operates in about 250 cities across the world. But it’s being challenged in a lot of them, including Portland, San Francisco, Los Angeles, Toronto, Rio de Janeiro, Paris, Berlin, as well as others.
I don’t want to dismiss any of the safety concerns that have arisen lately, because those are very serious and they need to be addressed. Life safety is paramount. But I continue to believe that banning a service that many people clearly want to use isn’t the right solution.
On top of that, I think it could lull many of the local taxi communities into a false sense of security about the future. Uber is moving incredibly quickly. UberX launched in Toronto in September of this year. And UberPOOL – their new carpool service – is likely next.
With these releases, Uber is working towards a specific vision for the future: Their goal is to eliminate the need for private vehicle ownership. Should they be successful, this will not only impact taxis, but also car manufacturers and urban mobility in its entirety.
So as difficult as it might seem right now, I think urban leaders would be better served trying to figure out how to harness these innovations. Cities have been trying for decades to get people out of their cars. Uber wants to do the same.
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