Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.
Last week, SHARE NOW — which was previously known as Car2Go — announced that it will be exiting the North American market entirely come February 29, 2020, and that it will also cease operations in London, Brussels, and Florence. A couple of reasons were cited, including the “volatile state of the global mobility landscape,” but that really translates into low adoption:
Further, despite our best efforts and investments in Brussels, London and Florence over the years, we are unable to continue operations in a manner that’s sustainable for our business due to low adoption rates.
Moving forward, SHARE NOW will focus on the remaining 18 European cities. We, along with our shareholders, believe these markets show the clearest potential for profitable growth and mobility innovation.
There was a period of time when I used to use Car2Go here in Toronto. My network did as well. But that quickly stopped with the rise of Uber and Lyft. I mean, why bother finding a Car2Go and then parking it, when there’s a much lower friction option? I would imagine that’s how most people feel. (Maybe there’s a care share advantage for longer trips.)
At the same time, companies such as Uber and Lyft have, as you know, not performed well as public companies. The market is nervous about their path to profitability. In my view, they’re largely an undifferentiated offering right now, and it’s pretty easy to switch across them. So yeah, I guess the global mobility landscape is pretty volatile.
Lately it has been in the news that a growing number of people in Tokyo are using car-sharing services for reasons other than to drive places. It started when companies began noticing that “several percent of their rented vehicles” were not being driven at all. What they ended up discovering, largely through customer surveys, is that car-sharing services have become an affordable option for people looking to nap, work, eat, store things, charge their phone, practice rapping, and probably a bunch of other things.
This immediately struck me as being quintessentially Japanese, partially because one of my experiences of Tokyo is that Tokyoites are often cool to sleep all throughout the city, including at the bar and on my shoulder on the metro. But I also think this finding tells you something about Tokyo’s urban fabric and, in particular, how much of a precious commodity that space is within the capital. This guy once rented a car because he couldn’t find a place to sit down and eat his boxed lunch.
This may also be a case of mispriced private space. Cities should, of course, have well-designed public spaces that accommodate people wanting to eat their boxed lunches. But for those looking for a little quiet time, a few hundred yen for 30 minutes has proven to be a competitive, and in some cases a more affordable, offering compared to, say, internet cafes. From the sounds of it, none of the car share companies ever anticipated this use case. Pricing is interesting.
New York City is considering a congestion charge for drivers entering Manhattan below 60th street. It is part of Governor Cuomo’s Fix NYC plan. But we all know how difficult these things are to implement.
Last month, Felix Salmon wrote a piece in Wired where he argued that our cities are dying of traffic congestion and that the cause is ride-hailing services like Uber and Lyft. The solution: A tax on ride-hailing services.
The article elicited a few reactions, including this one by Charles Komanoff over at Streetblogs and this one by Joe Cortright over at City Observatory. Joe’s message: “The problem isn’t the ride-hailed vehicles, it’s the under-priced street.”
Precisely.
Felix later followed-up with a post on his blog where he clarified that the reason he loves this idea – of taxing ride-hailing companies, not riders – is that it’s far more politically palatable than a blanket tax on all cars. I don’t disagree.
Which is why I think my idea is something which is eminently politically possible, in contrast to congestion pricing, which has been implemented exactly nowhere in the USA.
Americans love their cars, and they love the freedom that cars represent, and they hate the idea that they should be taxed for driving their cars. Tolls on roads and bridges are bad enough, but a fee just to drive in to a city?
That said, I’m with Charles and Joe.
Last year, it was reported that roughly 25% of all Uber trips in New York City were UberPool trips. I’m not sure what the number is today, but these are people who are car pooling to get around. That’s generally considered to be a positive thing.
Are these really the trips we want to be discouraging (and singling out) with a charge simply because we don’t have the moxie to do what is right and makes rational sense?
Below is a short video that was created by the MIT Senseable City Lab, World Economic Forum and TomTom for a study on how people move in 100 cities around the world. They call it the Global Mobility Index.
It shows congestion levels (using real-time traffic data from TomTom), commute times, and an estimate for the percentage of trips that could be shared if people were willing to wait up to 5 minutes.
In the case of Toronto, they estimate that 99% of trips could be shared and that it would increase average speeds by ~7.9 km/h and reduce overall traffic levels by ~44.09%.
Their solution to solving traffic congestion is a cocktail that involves car-sharing, bike-sharing, and public transit. It’s about developing a “mobility portfolio.” Seems sensible.
I found myself wanting more information and data after watching the video. Still, it was interesting to see what the authors describe as the “pulse of our cities.”
UberX officially launched in Toronto today. Which means that Toronto’s taxi and limousine industry is about to get a lot more grouchy. For those of you who may not be familiar, uberX is Uber’s low-cost car service. Just like the regular version, you hail a car using your mobile phone. But this option will cost you 40% less than a regular taxi!
Here are sample rates from the Financial District to Yonge & Eglinton (midtown):
And from the Financial District to Pearson International Airport:
This is pretty exciting. Because as much as I think it’s great to use Hailo or Uber to hail and then pay for a car, the big problem in my mind has always been that cabs in Toronto are just far too expensive. The meter starts at $4.25 and shoots up faster than you can take a selfie in the backseat.
But obviously there’s an entrenched industry here that is not going to be happy about a startup eating into their fares. So I wouldn’t be surprised if we see a lot more backlash here in Toronto – as has been the case in many other cities. However I don’t think that’s a viable long term solution for the incumbents.
So instead of protesting and trying to ban it, we should be figuring out how to adjust to this changing reality. For the incumbents, this might mean lowering fares or figuring out a better way to differentiate themselves. A 40% discount is a pretty compelling value proposition. For me personally, I don’t know why I would ever pay more for a regular taxi, unless there was no other option.
On a side note, it’s worth pointing out that an uberX trip from downtown to Pearson is estimated to cost around $33 – roughly the same as what some people think the Union Pearson Express train will cost. That’s further evidence that charging a lot and targeting business travelers may not be the best strategy.
If you’re a regular reader of Architect This City, you’ll know that I’m a big supporter of public transit. And that’s because, as far as I can tell, it’s the most efficient way of moving lots of people around a big city.
But more and more I’ve been thinking about how technology might change, or even disrupt, this school of thought. Which is why when I wrote this post a few days ago, I was careful to say that private cars aren’t the mobility answer. Because in reality, cars likely aren’t going to go away. We’re just going to use them differently.
Here are the two things I’m thinking about most:
1. Driverless cars
I’ve written about driverless cars before in terms of how they might be used as a form of public transit. But I think it’s worth revisiting them for a moment. There are lots of driverless car critics out there and they usually fixate on the fact that a car is still a car, whether or not you happen to be driving it. It still takes up the same amount of space in our cities. Or does it?
The key thing to keep in mind is that when we’re not longer driving the vehicle, it opens up lots of different possibilities in terms of how they might be used and also how they might be designed. I was watching this fireside chat with the founders of Google the other night and, for them, driverless cars offer the possibility of solving two big problems: traffic and parking.
We know that parking takes up a lot space in our cities. But that’s really symptomatic of the fact that the utilization rate for most people’s cars is incredibly low. Most of the time a car is sitting parked and idle. But with driverless cars, they’ll be able to drop you off at your destination and then continue on to pick up their next ride–thereby minimizing the need for all that parking.
This would bring the utilization rate way up for each car, which would also minimize the number of absolute cars that we’d need to have in our cities to move everybody around. Of course, this would mean that we’d be sharing cars. People wouldn’t own cars; they would be an on-demand service.
2. Networked vehicles
This brings us to my second point: driverless cars will be networked cars. Again, I’ve written about this before, but I specifically wanted to raise it again because of a new service that Lyft just launched in San Francisco called Lyft Line.
The way it works is simple. You input where you’re going and Lyft will match you up with others who are going to more or less the same destination. The routes get shared and this brings down the costs to everyday use. It runs on the same principles as the on-demand minibuses I wrote about in Helsinki.
But if you combine this with driverless cars, you’re starting to get at something incredibly interesting. Now all of sudden you’re getting the door-to-door convenience of private cars with many of the efficiencies of public transit.
So in my mind, it’s very possible that platforms like Uber, Hailo, and Lyft could became major infrastructure backbones in a world of driverless cars. And if you think about it in this context, then I don’t think the valuations for these companies should seem all that surprising. These are potentially huge innovations.
In the end, I don’t know how this will all shake out. I don’t think anybody does. I believe that strong public infrastructure (such as subways, light rail, and so on) will still be needed in big cities, but I’m starting to think that mobile apps and driverless cars will also form a big part of how we get around. Probably more so than most people think today.
Earlier this week, Toronto City Council approved the equivalent of 755 storeys of new development, a lot of which will end up in the downtown core. The translates into 6,887 new housing units and roughly 4 million square feet of new commercial space. The Globe and Mail called it the Manhattanization of downtown.
If you’d like to go through the complete City Council meeting agenda, you can do that here. (I warn you though, it won’t be an exciting read.)
One notable project that was approved is 50 Bloor Street West, which is a 71-storey mixed-use building in Yorkville adjacent to and on top of Holt Renfrew (It includes a $6 million Section 37 contribution). I mention this one because it’s impressively tall and because it’s a project that I was involved with when I was at Morguard. Watch for Yorkville in the coming years, there’s a lot in the pipeline.
While I think this is all incredibly exciting, our chief planner, Jennifer Keesmaat, is entirely correct in pointing out that all of this highlights the desperate need for better infrastructure, the most critical of which is a relief subway line that cuts across downtown.
But to be clear, this isn’t a question of just planning for growth. This is a question of planning for growth and making up for decades of infrastructure disinvestment. That’s the position we’re in today, which means we have a lot of hard work to do. Though I’m confident we’ll get it done.
The other thing that this level of intensification should highlight for you is that public transit, and other forms of mobility such as biking and car sharing, have to be central to our goals. It’s simply infeasible for everybody to be driving around in a car. We’re currently demonstrating how efficient that ends up being.
One of the things that many city planners, transportation experts, and municipalities are trying to figure out is how to successfully shift people away from driving towards alternative modes of transportation, such as biking and transit. Now, this is no easy task. There are a myriad of factors that influence a person’s decision to drive or not drive–or if they should even own a car in the first place. Though, land use and density are, in my opinion, probably the biggest.
But of all the solutions thrown around, mobile apps are typically not within the playbook. However a recent New York Times article is making the argument that it should be, because car-sharing services and apps like Uber seem to be indeed having an affect on people’s decision to own a car. And that’s because in some cities it’s actually cheaper to use Uber every day (than to own a car) and because taxi use has been shown to correlate with other (non-driving) forms of mobility.
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.
And to be honest, I don’t think this is all that far stretched. More and more I find myself wondering why I even own a car. It’s not appreciating sitting downstairs in my garage and, given the frequency in which I use it, I would definitely be better off financially if I simply used an app like Uber or Hailo more often. About the only thing those apps aren’t great for are trips to Home Depot and snowboard trips to the mountain.
