The title of this post is a line from one of the works of Jenny Holzer. It feels appropriate right now.
On Wednesday, Toronto saw a large scale anti-Uber protest involving as many as 2,000 taxis. It involved a bunch of taxis driving real slow around downtown, some altercations, and lots of people who want to see Uber completely shut down.
This, of course, isn’t a new thing for cities.
Many cities around the world have seen similar kinds of protests. But many of you will probably also agree that this is not the most effective response from the taxi industry. It casts a negative light on them at a time when people are already switching to Uber for better service. It also ignores the fact that – in my view – Uber ain’t going anywhere.
I’ve been a vocal supporter of Uber on this blog and I continue to believe that it will continue to prove to be a good thing for both consumers and for cities. In fact, famed startup investor Paul Graham once tweeted that because Uber is so clearly a good thing, you can tell how corrupt a city is by how hard it fights against it. This has become the truism among today’s urbanites.
At the same time though, I am trying to take a balanced view on this issue, which is what got me thinking about the work of Jenny Holzer. Protect me from what I want. Today, I want Uber. But I am trying to think of where that want might lead me.
Like a lot of private companies, the goal of Uber is monopoly profits. They would love to control the market. And that’s not a knock against them. It is just business. But I am imagining a market where only Uber exists.
When I was in Miami last week I switched back and forth between UberX and regular taxis. Because Art Basel was going on, Uber was frequently in surge pricing. Sometimes as high as 4x. So in those cases, I just hailed a regular cab. Thankfully the cabs there are pretty reasonably priced and easily to hail. The driver didn’t ask me if I liked the electronic music playing on the satellite radio, but that’s not a big deal.
But what if I didn’t have the option of hailing a regular cab? What if Uber was my only option and I had to put up or shut up when prices were 4x? That would be suboptimal in my books.
So what does this all mean?
I am an Uber customer. I do not want and I do not believe it will go away. But I also believe that our public policy should encourage competition in the taxi marketplace. Competition holds people and companies accountable. It means that if you stop creating value, you will go out of business.
It’s for that reason that I think the taxi lobby is wrong in trying to force Uber to shut down. And it’s for that reason that cities are going to have to work very hard at crafting the right kind of public policy. I am optimistic that Toronto will make that happen. But as we’ve seen today, there will be bumps along the way.
Jarrett Walker of Human Transit recently published an interesting post talking about downtowns. His argument is that we shouldn’t be planning our transit networks around the traditional notion of a single-centered city.
Here’s a snippet:
So growing a single downtown isn’t the key to becoming a great transit city. Quite the opposite, it’s best to have a pattern of many centers, all generating high demand, and supporting balanced two-way flows between them that let us move more people on less infrastructure. This is the great advantage of Paris or Los Angeles or the Dutch Randstad over Chicago or Manhattan.
Now, there are many cases where a singular economic center still dominates an urban region. See downtown Toronto. And many will argue that the current economic environment is creating more, rather than less, concentrated urban spikiness.
But at the same time it is quite clear that many of our cities have shifted away from a monocentric model to a polycentric one.
I mean, just look at all employment nodes that have developed across the Toronto region. The idea that everyone comes downtown in the morning and then leaves in the evening has become an anachronism for many. Early in my career I spent 4 years commuting from downtown to the suburbs.
So what is happening is that our cities need to start performing more like point-to-point networks. This isn’t a new thought. But it’s a lot harder to execute on compared to what many cities have been used to.
You need a critical density of both residents and employers and the right kind of connectivity to create a true “mobility hub.” In Toronto, you could argue that we really only have one of those and it’s centered around Union Station.
But I think that will change for many cities. And when we do get it right, we will be doing a lot to improve the crippling traffic congestion that so many of our cities are suffering from.
Wharton real estate professor, Mariaflavia Harari, recently published a paper that looks at the relationship between urban geometry (specifically compactness) and inner city commuting efficiency across 450 cities in India.
Consistent with previous research done in this space, she finds that people generally prefer compact cities and that they are willing to pay a premium for it. It increases overall welfare. Here’s an excerpt from her paper:
“My findings are broadly consistent with compact city shape being a consumption amenity. All else being equal, more compact cities grow faster. There is also evidence that consumers are paying a premium for living in more compact cities, in terms of lower wages and, possibly, higher housing rents.”
So her recommendations for the Indian cities she analyzed was that they should relax land use restrictions to allow for more vertical / compact development and that they should focus on improving urban transport in order to offset some of the negatives externalities associated with sprawl. This is no different than the approach that many cities in the developing world are adopting or looking to adopt.
One of things that really stood out for me in her paper though is the way people perceive commuting:
“The loss associated with non-compact shape appears to be substantial: a one-standard deviation deterioration in city shape, corresponding to a 720 meter increase in the average within-city round-trip, entails a welfare loss equivalent to a 5% decrease in income. This is considerably larger than the direct monetary and opportunity cost associated to lengthier commutes. Less compact cities also appear to attract fewer low-income immigrants, as captured by the share of slum dwellers.”
What this is saying is that we tend to overvalue the negatives of commuting, beyond the direct costs of gas, insurance, car payments, our time, and so on. We hate it so much that we also want to be compensated for the mental anguish. Here is that same idea said differently:
The estimated welfare loss from longer commutes appears to be large, relative to the immediate time and monetary costs of commuting. This is consistent with the interpretation that commuting is perceived as a particularly burdensome activity. The behavioral literature has come to similar conclusions, albeit in the context of developed countries. Stutzer and Frey (2008) find a large and robust negative relation between commuting time and subjective wellbeing, using German data. They estimate that individuals commuting 23 minutes one way would have to earn 19 percent more per month, on average, in order to be fully compensated.
So I guess I’m not the only one who thinks commuting and driving sucks.
The title of this post is a line from one of the works of Jenny Holzer. It feels appropriate right now.
On Wednesday, Toronto saw a large scale anti-Uber protest involving as many as 2,000 taxis. It involved a bunch of taxis driving real slow around downtown, some altercations, and lots of people who want to see Uber completely shut down.
This, of course, isn’t a new thing for cities.
Many cities around the world have seen similar kinds of protests. But many of you will probably also agree that this is not the most effective response from the taxi industry. It casts a negative light on them at a time when people are already switching to Uber for better service. It also ignores the fact that – in my view – Uber ain’t going anywhere.
I’ve been a vocal supporter of Uber on this blog and I continue to believe that it will continue to prove to be a good thing for both consumers and for cities. In fact, famed startup investor Paul Graham once tweeted that because Uber is so clearly a good thing, you can tell how corrupt a city is by how hard it fights against it. This has become the truism among today’s urbanites.
At the same time though, I am trying to take a balanced view on this issue, which is what got me thinking about the work of Jenny Holzer. Protect me from what I want. Today, I want Uber. But I am trying to think of where that want might lead me.
Like a lot of private companies, the goal of Uber is monopoly profits. They would love to control the market. And that’s not a knock against them. It is just business. But I am imagining a market where only Uber exists.
When I was in Miami last week I switched back and forth between UberX and regular taxis. Because Art Basel was going on, Uber was frequently in surge pricing. Sometimes as high as 4x. So in those cases, I just hailed a regular cab. Thankfully the cabs there are pretty reasonably priced and easily to hail. The driver didn’t ask me if I liked the electronic music playing on the satellite radio, but that’s not a big deal.
But what if I didn’t have the option of hailing a regular cab? What if Uber was my only option and I had to put up or shut up when prices were 4x? That would be suboptimal in my books.
So what does this all mean?
I am an Uber customer. I do not want and I do not believe it will go away. But I also believe that our public policy should encourage competition in the taxi marketplace. Competition holds people and companies accountable. It means that if you stop creating value, you will go out of business.
It’s for that reason that I think the taxi lobby is wrong in trying to force Uber to shut down. And it’s for that reason that cities are going to have to work very hard at crafting the right kind of public policy. I am optimistic that Toronto will make that happen. But as we’ve seen today, there will be bumps along the way.
Jarrett Walker of Human Transit recently published an interesting post talking about downtowns. His argument is that we shouldn’t be planning our transit networks around the traditional notion of a single-centered city.
Here’s a snippet:
So growing a single downtown isn’t the key to becoming a great transit city. Quite the opposite, it’s best to have a pattern of many centers, all generating high demand, and supporting balanced two-way flows between them that let us move more people on less infrastructure. This is the great advantage of Paris or Los Angeles or the Dutch Randstad over Chicago or Manhattan.
Now, there are many cases where a singular economic center still dominates an urban region. See downtown Toronto. And many will argue that the current economic environment is creating more, rather than less, concentrated urban spikiness.
But at the same time it is quite clear that many of our cities have shifted away from a monocentric model to a polycentric one.
I mean, just look at all employment nodes that have developed across the Toronto region. The idea that everyone comes downtown in the morning and then leaves in the evening has become an anachronism for many. Early in my career I spent 4 years commuting from downtown to the suburbs.
So what is happening is that our cities need to start performing more like point-to-point networks. This isn’t a new thought. But it’s a lot harder to execute on compared to what many cities have been used to.
You need a critical density of both residents and employers and the right kind of connectivity to create a true “mobility hub.” In Toronto, you could argue that we really only have one of those and it’s centered around Union Station.
But I think that will change for many cities. And when we do get it right, we will be doing a lot to improve the crippling traffic congestion that so many of our cities are suffering from.
Wharton real estate professor, Mariaflavia Harari, recently published a paper that looks at the relationship between urban geometry (specifically compactness) and inner city commuting efficiency across 450 cities in India.
Consistent with previous research done in this space, she finds that people generally prefer compact cities and that they are willing to pay a premium for it. It increases overall welfare. Here’s an excerpt from her paper:
“My findings are broadly consistent with compact city shape being a consumption amenity. All else being equal, more compact cities grow faster. There is also evidence that consumers are paying a premium for living in more compact cities, in terms of lower wages and, possibly, higher housing rents.”
So her recommendations for the Indian cities she analyzed was that they should relax land use restrictions to allow for more vertical / compact development and that they should focus on improving urban transport in order to offset some of the negatives externalities associated with sprawl. This is no different than the approach that many cities in the developing world are adopting or looking to adopt.
One of things that really stood out for me in her paper though is the way people perceive commuting:
“The loss associated with non-compact shape appears to be substantial: a one-standard deviation deterioration in city shape, corresponding to a 720 meter increase in the average within-city round-trip, entails a welfare loss equivalent to a 5% decrease in income. This is considerably larger than the direct monetary and opportunity cost associated to lengthier commutes. Less compact cities also appear to attract fewer low-income immigrants, as captured by the share of slum dwellers.”
What this is saying is that we tend to overvalue the negatives of commuting, beyond the direct costs of gas, insurance, car payments, our time, and so on. We hate it so much that we also want to be compensated for the mental anguish. Here is that same idea said differently:
The estimated welfare loss from longer commutes appears to be large, relative to the immediate time and monetary costs of commuting. This is consistent with the interpretation that commuting is perceived as a particularly burdensome activity. The behavioral literature has come to similar conclusions, albeit in the context of developed countries. Stutzer and Frey (2008) find a large and robust negative relation between commuting time and subjective wellbeing, using German data. They estimate that individuals commuting 23 minutes one way would have to earn 19 percent more per month, on average, in order to be fully compensated.
So I guess I’m not the only one who thinks commuting and driving sucks.
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