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 I wrote (yet another) post about Uber where I argued that leading cities will be the ones that engage with the sharing/rental economy (as opposed to try and outright ban it) and that Uber is going to continue to impact current beliefs around vehicle ownership.
As to be expected, some people agreed with me and some people didn’t:
But I also discovered following that post that there are groups, and hopefully cities, who are working to adapt to the changing realities brought about by disruptive innovation.
One of those groups is The National League of Cities – which I truthfully don’t know that much about. But they have created something called “The Sharing Economy Advisory Network.”
“Cities across the country have been struggling to respond to the rapid emergence of the Sharing Economy,” said Clarence Anthony, National League of Cities executive director. He continued, “Cities are looking for ways to update and improve their current regulatory framework to ensure that regulations like safety and health protect residents, while at the same time supporting the growth of new businesses. It is imperative for cities to learn how this industry operates and discover ways to engage in order to support these new modes of doing business and to create jobs.”
It sounds like the right kind of initiative and I wish them lots of success. I hope it’s effective and I hope that Toronto will look at how it too can properly manage these economic changes. This is going to take both the private and public sectors working together.
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.
