Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
“This will be a game changer and will establish Toronto as a leader in running a truly smart city.”
- John Tory, Mayor of the City of Toronto
Yesterday I registered for a hackathon called TrafficJam that’s taking place this October 2 - 4, 2015 here in Toronto. It’s being organized by Evergreen CityWorks and the City of Toronto, with the goal of fixing Toronto’s traffic troubles.
Tickets are free, but going fast. If you’re interested in this sort of thing, I would encourage you to sign up today. And if you do register or are already registered, drop me on a line so we can connect. I’m excited to see what kind of solutions we’re all able to come up with over the course of a weekend.
But as I was registering and reading through the website, I couldn’t help but think about some of the traffic problems that we won’t be solving over the hackathon weekend, namely the politicization of transportation planning in this city.
As an example of that check out a post by transit blogger Steve Munro called, The Vanishing Relevance of SmartTrack.
SmartTrack is the transit platform that Mayor John Tory ran on last year. And this post explains why it is unlikely to achieve its pitch promises.
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.
“This will be a game changer and will establish Toronto as a leader in running a truly smart city.”
- John Tory, Mayor of the City of Toronto
Yesterday I registered for a hackathon called TrafficJam that’s taking place this October 2 - 4, 2015 here in Toronto. It’s being organized by Evergreen CityWorks and the City of Toronto, with the goal of fixing Toronto’s traffic troubles.
Tickets are free, but going fast. If you’re interested in this sort of thing, I would encourage you to sign up today. And if you do register or are already registered, drop me on a line so we can connect. I’m excited to see what kind of solutions we’re all able to come up with over the course of a weekend.
But as I was registering and reading through the website, I couldn’t help but think about some of the traffic problems that we won’t be solving over the hackathon weekend, namely the politicization of transportation planning in this city.
As an example of that check out a post by transit blogger Steve Munro called, The Vanishing Relevance of SmartTrack.
SmartTrack is the transit platform that Mayor John Tory ran on last year. And this post explains why it is unlikely to achieve its pitch promises.
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.
About a week ago I wrote a post questioning what driverless cars will mean for cities. I ended by saying that that it feels as if we’re going to see increasing tension between private and public transport.
What I meant by that was simply that conventional notions around private car use are going to change. And ultimately that is going to mean that we need to rethink public transport and how that fits into a broader urban mobility framework.
What do I mean by this?
The International Transport Forum at the OECD recently published a fascinating report called, Urban Mobility System Upgrade: How shared self-driving cars could change city traffic. And it deals with exactly the sorts of things I am thinking about.
The study looked of what might happen when all cars become self-driving in a mid-sized European city (specifically Lisbon, Portugal). They leveraged existing transportation data from the city, but replaced 100% of the human powered cars with two types of self-driving cars: TaxiBots and AutoVots.
TaxiBots were driverless cars that would be shared with multiple people at the same time. In other words, they were a kind of pseudo-public transit. And AutoVots we’re your more conventional private taxi. They picked up one person at a time.
In the first scenario, they combined their TaxiBots and AutoVots with public transit (light rail) and discovered that the same number of people could be moved around with only 10% of the cars currently on the road. That’s a 90% reduction!
They also found that the city needed 20% less on-street parking and 80% less off-street parking since driverless cars don’t need to sit idle waiting for a driver.
In the second scenario, they removed mass transit from the equation. And in this instance they found that the city was still able to get around, but with an 80% reduction in the number of cars on the road. Remarkably, it also led to a 10% reduction in rush hour commute times.
These are pretty profound changes. Reducing the number of cars on the road by 80-90% is a significant change.
But it’s also why I’ve been thinking about the tension between private and public transport. As we get better at optimizing “cars” (their definition will change), what becomes the role of true public transit?
Ultimately, I think what will happen is a blurring of the two. In the example above, the TaxiBots served basically as small scale public transit. But that does not necessarily mean that true mass transit will become irrelevant. We’re just going to need to rethink how the entire mobility network fits together.
I’d now like to bring this discussion back to Toronto for a minute.
As many of you probably know from this blog, Toronto is on the cusp of deciding what to do with the eastern portion of the Gardiner Expressway (an elevated highway that runs across the downtown waterfront). It will go to City Council next month.
I firmly believe that we should remove it, but there many people who believe we shouldn’t. The main objection seems to be that the traffic projections indicate that removing it could make commuting into downtown – by car – 3 to 5 minutes longer by 2031.
By today’s standards, I believe this concern represents an outdated way of thinking about cities and urban mobility. Adding more lanes is like loosening your belt to deal with obesity. However, it gets even worse when you think about urban mobility in the context of this post.
Given the profound transportation changes that are currently underway, I think there’s a strong likelihood that the Gardiner projections we have today will be completely wrong by 2031. I don’t know know for sure, but I’m guessing the models don’t account for the efficiencies being created by driverless cars and peer-to-peer networks.
In other words, I am suggesting that those 3 to 5 minutes could prove to be a red herring. The relevant question should be: Which decision will allow Toronto to build the absolute best waterfront in the world? And in my opinion that leads to removing the Gardiner East.
If you feel similarly, I would encourage you to write your local City Councillor.
About a week ago I wrote a post questioning what driverless cars will mean for cities. I ended by saying that that it feels as if we’re going to see increasing tension between private and public transport.
What I meant by that was simply that conventional notions around private car use are going to change. And ultimately that is going to mean that we need to rethink public transport and how that fits into a broader urban mobility framework.
What do I mean by this?
The International Transport Forum at the OECD recently published a fascinating report called, Urban Mobility System Upgrade: How shared self-driving cars could change city traffic. And it deals with exactly the sorts of things I am thinking about.
The study looked of what might happen when all cars become self-driving in a mid-sized European city (specifically Lisbon, Portugal). They leveraged existing transportation data from the city, but replaced 100% of the human powered cars with two types of self-driving cars: TaxiBots and AutoVots.
TaxiBots were driverless cars that would be shared with multiple people at the same time. In other words, they were a kind of pseudo-public transit. And AutoVots we’re your more conventional private taxi. They picked up one person at a time.
In the first scenario, they combined their TaxiBots and AutoVots with public transit (light rail) and discovered that the same number of people could be moved around with only 10% of the cars currently on the road. That’s a 90% reduction!
They also found that the city needed 20% less on-street parking and 80% less off-street parking since driverless cars don’t need to sit idle waiting for a driver.
In the second scenario, they removed mass transit from the equation. And in this instance they found that the city was still able to get around, but with an 80% reduction in the number of cars on the road. Remarkably, it also led to a 10% reduction in rush hour commute times.
These are pretty profound changes. Reducing the number of cars on the road by 80-90% is a significant change.
But it’s also why I’ve been thinking about the tension between private and public transport. As we get better at optimizing “cars” (their definition will change), what becomes the role of true public transit?
Ultimately, I think what will happen is a blurring of the two. In the example above, the TaxiBots served basically as small scale public transit. But that does not necessarily mean that true mass transit will become irrelevant. We’re just going to need to rethink how the entire mobility network fits together.
I’d now like to bring this discussion back to Toronto for a minute.
As many of you probably know from this blog, Toronto is on the cusp of deciding what to do with the eastern portion of the Gardiner Expressway (an elevated highway that runs across the downtown waterfront). It will go to City Council next month.
I firmly believe that we should remove it, but there many people who believe we shouldn’t. The main objection seems to be that the traffic projections indicate that removing it could make commuting into downtown – by car – 3 to 5 minutes longer by 2031.
By today’s standards, I believe this concern represents an outdated way of thinking about cities and urban mobility. Adding more lanes is like loosening your belt to deal with obesity. However, it gets even worse when you think about urban mobility in the context of this post.
Given the profound transportation changes that are currently underway, I think there’s a strong likelihood that the Gardiner projections we have today will be completely wrong by 2031. I don’t know know for sure, but I’m guessing the models don’t account for the efficiencies being created by driverless cars and peer-to-peer networks.
In other words, I am suggesting that those 3 to 5 minutes could prove to be a red herring. The relevant question should be: Which decision will allow Toronto to build the absolute best waterfront in the world? And in my opinion that leads to removing the Gardiner East.
If you feel similarly, I would encourage you to write your local City Councillor.
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