Three months ago when Toronto City Council voted not to remove the Gardiner Expressway East (which in my view was a mistake), it did so with a commitment to look at tolling options for both the Gardiner Expressway and the Don Valley Parkway (which in my view is a positive thing).
Last week a preliminary report was released discussing some of those tolling options. If reading dry city reports is your thing, you can do that here.
The Coles Notes version (CliffNotes for you Americans) is that a $3 flat toll on both the Gardiner and the DVP – the same cost as riding transit in this city – would be expected to reduce vehicles on the highways by 9% and 12%, as well reduce end-to-end travel times by 3 minutes and 5 minutes, respectively. There’s obviously a lot more in the report, but these figures stood out for me.
Given how monumental the 3 minute delay was in the Gardiner East debates, it will be interesting to see whether people treat a 3 minute time savings in a similar way. I suspect they won’t. The cost will be the larger issue.
I’ve been a vocal supporter of tolls and road pricing on this blog. One of the main reasons for that is because I view the demand for highways as being largely inelastic and therefore a potentially great source of transit funding.
The discouraging part of the above report is that its primary goal is to explore tolls for the purpose of “offsetting capital, operating, and maintenance costs.” The primary goal is not to come up with sustainable sources of transit funding.
Having these costs paid for by user-fees as opposed to general taxes is still a good thing in my view. But an even better thing would be to help fund mobility solutions that we know will be far more effective at getting people around this region as millions more people move here in the coming decades.
The other discouraging part of the report is that near the end it explains that while the City of Toronto Act of 2006 allows for toll highways, they cannot be implemented without the Province passing regulation.
It’s a reminder that our governance structures do not reflect the current urban reality of this country.
Earlier this week I wrote a “Tech Tuesday” post talking about Uber’s new Smart Routes functionality, which it is currently testing out in San Francisco. At the end of the post I ended by saying that it’s not just the taxi industry that should be thinking about Uber, it’s also public transit authorities.
And that’s because many people in cities rely on multi-modal forms of transportation (I know I do) and in my mind it is clear that Uber is trending away from just “Everyone’s Private Driver” to a service that is starting to look and feel a lot like urban mass transit.
Then today my good friend Evgeny sent me a post called, “Public Transit Should Be Uber’s New Best Friend.” And it’s one of the best pieces I’ve read on Uber and its impact on urban mobility. I highly recommend you give it a read, particularly if you’re in the city building arena.
The article does a deep dive into how New Yorkers commute. Here’s how they broke it down.
It then talks about what it will take for a company like Uber to make a meaningful dent in car ownership (which is one of the company’s goals) and how the truly big opportunity for Uber is to go more mass market and tap into the public transit market – either by interfacing with or by building its own version of it.
Here’s their concluding paragraph:
But there’s a much wider potential audience if Uber can also reach middle-class customers who want to save money. Perhaps in the distant (or even the not-so-distant) future, Uber can build its own version of “public” transit, making rides so cheap that they cost less than the $4 or $5 that Americans now pay, on average, to make a trip in their personal cars. In the meantime, it might have more success among “car-cutting” customers who can use Uber along with public transit. That might mean Uber’s growth is concentrated more in cities like New York, San Francisco and Chicago — and in Europe and Asia — that already have reasonably strong public transit networks.
It’s definitely worth a full read. Thanks again for sending this over Evgeny.
Early this morning Peter Cheney of the Globe and Mail published an article called: How Uber is ending the dirty dealings behind Toronto’s cab business.
And I highly recommend you read it. He’s been investigating this industry for decades.
Though the article is specific to Toronto, I know that there are middle people and archaic policies governing the taxi industries in many other cities around the world.
Here it revolves around taxi licenses issued by the city (known as “plates”), which are expensive and almost impossible to get. Last year the average price of a plate was $118,235 (2014).
The way it works is that people – typically non-drivers – buy/inherit/get these plates and then charge rent on them to drivers who want to use them. The result is a taxi cartel:
In fact, Toronto’s taxi plate system is anything but free enterprise. Instead, it is based on the artificial restriction of a natural market, and the granting of licences to a fixed number of participants. Even those who paid top dollar for a plate used to enjoy an annual return of more than 12 per cent. And for those who inherited plates, the return was manna from heaven.
So it shouldn’t come as a surprise that the taxi industry is grouchy about companies like Uber. But the cost structure of the incumbents is going to need to change if they want to stay in business.
Jeff Bezos of Amazon is famous for saying, “Your margin is my opportunity.” And that’s exactly what is happening here. A bloated legacy cost structure is being quickly supplanted by better/cheaper.