Tag: taxi

• Gender earnings in the gig economy

  

  Last year, 5 economists published a research paper called “The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers.” The authors are 2 economists employed by Uber; 2 professors at Stanford University; and the chairman of the University of Chicago’s economics department.

  The findings were widely discussed, including on Steven Levitt and Stephen Duber’s Freakonomics podcast (Episode 317). What’s interesting about Uber’s ridesharing data is that their compensation algorithm is believed to be entirely gender-blind.

  The formula is pretty simple. It takes into account distance, time, and sometimes a surge multiplier when demand is spiking. Gender does not factor. And the same goes for the actual dispatching of rides. The software doesn’t know who is male and who is female.

  What they discovered is that on average male Uber drives earn about 7% more per hour compared to females. And that 50% of this wage gap can be (apparently) explained by one variable: Men tend to drive a little faster than women. So they complete more rides per hour.

  It’s also worth noting that across the US, only about 27% of Uber drivers are female (at least at the time the report was published). Women also have a higher 6-month attrition rate; 76% compared to 63% for men. In other words, more female drivers drop off the platform.

  If you’re interested in this topic, you should probably have a listen to the Freakonomics podcast. They deliberate on the above in a lot more detail. You can also download a full copy of the research paper, here.

  Photo by Luke Stackpoole on Unsplash

  2019.08.04

• Mobility at CES

  CES is underway right now in Las Vegas. About 200,000 people are in attendance. 

  Since tech and mobility are today closely intertwined, the show has become an important platform for the automative industry.

  Here is a video showcasing BMW’s new iNext concept (expected by 2021):

  [youtube https://www.youtube.com/watch?v=x9-f3cALABk&w=560&h=315]

  It is based on level 3 autonomy, which means the car will do mostly everything, but you need to be ready to take over at any time.

  The video is interesting because it begins to show you what becomes possible when you no longer need to pay attention to the road. It is a bit like flying (but hopefully more enjoyable). 

  And here is a video of Bell’s new urban air taxi, which is called Nexus (expected by the mid-2020s):

  [youtube https://www.youtube.com/watch?v=1o4d8N-A1G8&w=560&h=315]

  This is the company’s first concept. But they’ve been working with Uber since 2017 to develop a network of flying taxis for cities.

  Finally, flying cars.

  2019.01.10

• Fixing the MTA

  

  Fred Wilson wrote a great post on his blog today about New York City’s “transit mess.” 

  In it he talks about congestion pricing (which, as you all know, I support); the mess that is the Metropolitan Transportation Authority (MTA); and this 37-page report on how to improve the MTA.

  Here is an excerpt from his post that I liked, but that won’t be popular with everyone:

  That is an idea [congestion pricing] that has been proposed a number of times over the years, most notably by Mayor Bloomberg during his tenure. It is a good idea and long overdue. A dense urban environment should have excellent mass transit and incentives to use it and should have disincentives to drive cars. Taxing cars in Manhattan and using the revenues to maintain and improve our subways seems like an obvious thing to do.

  I would encourage you to give his post a read. The New York Times also reported on this topic (and the above recommendations) this week. They called it, 7 ways to fix the MTA (which needs a $60 billion overhaul).

  Photo by Joren on Unsplash 

  2018.12.20

• 1 out of 5 commuters in Manila relies on ride-hailing

  Earlier this year Uber sold its Southeast Asia business to Grab. At the time, it was estimated that Grab had 95% of the ride-hailing market in Southeast Asia. That’s why Uber decided to sell. Instead of continuing to bleed, they figured it would be better to instead merge businesses in exchange for a “sizeable stake in Grab.” This is similar to the deal that it struck in China with Didi.

  It’s clear evidence of cultural advantage. Though maybe you could argue it’s first mover advantage. Either way, many, including Wired, have argued that while Uber has dominated in the West, it has often struggled in the developing world. Different markets. When Grab launched you could pay with cash because so many users didn’t have a credit card.

  

  Here is another interesting insight from Bloomberg (see above): Nearly 1 out of every 5 commuters in Manila relies on a ride-hailing service because the public transit situation is allegedly so dire. Grab controls 90% of the market with 35,000 vehicles receiving somewhere around 600,000 requests a day.

  When Uber launched it was positioned as “Everyone’s private driver.” It was expensive. It was luxurious. And it was done because they knew they weren’t going to be able to compete on speed and/or price in the early days. But now ride-hailing services are tackling the very opposite end of the spectrum.

  2018.05.15

• Centralized taxi branding vs. decentralized ride fulfillment

  Back in 2013, when this blog was in its infancy, I argued that Toronto needs a consistent taxi brand. Since nobody was reading the blog at the time, I am sure that most of you have never read this post. I even forgot about it, until last night when I posted this photo of Hong Kong to Instagram:

  

  It reminded me of the role that taxis play in city branding. This photo is clearly of Hong Kong. But take away the taxis in the foreground and I would really have to think in order to identity it. I would then be searching for street signs and looking to see what side of the road the cars are driving on.

  Now, a few things have changed since 2013. Back then I didn’t have the same appreciation for decentralized ride hailing (Uber and Lyft), though I did have the same distaste for the taxi cartel. And I recognize that there is a tension between centralized taxi branding and a decentralized approach to ride fulfillment. 

  I’m not exactly sure how to solve this problem, but maybe it gets easier with autonomous vehicles and probable changes to the way consumers own, or don’t own cars. I believe it’s important for places and cities to have specificity. If you have any thoughts, please leave a comment below. 

  (I am trying to respond to all comments on this blog, because I’m finding it impossible to respond to all blog related emails. Sorry.)

  2018.01.27

• Should Uber be shut down?

  

  Last week Travis Kalanick – the cofounder who built Uber into the most highly valued privately held startup in the world – stepped down as chief executive at the request of his investors. This was the culmination of months of controversy related to the company’s toxic corporate culture.

  So what’s next? 

  Benjamin Edelman, associate professor at Harvard Business School, recently argued that this is it for the company: Uber Can’t be Fixed – It’s Time for Regulators to Shut It Down. I discovered the article through a good friend of mine who has felt similarly since the beginning. Uber’s business model is predicated on illegality and that should not be misconstrued as “innovation”.

  I have a few thoughts on this.

  But let me start by saying that this post is not a comment on the company’s corporate culture or its internal practices related to lobbying governments. I have not really been following what’s going on internally and I’ll leave other, more informed, people to comment on those matters.

  With that said, here are 3 thoughts.

  One, shutting down the company feels like an extreme case of throwing out the baby with the bathwater. Lots of companies go through restructuring, assuming that’s needed, without completely capitulating.

  Two, before Uber came along it was still challenging to pay for a taxi in Toronto with a credit card. More often than not the driver would tell you that the machine was broken or ask that you instead pay with cash. At that point, I would have accepted a clunky payment machine mounted to the rear of the front seats as an innovation.

  To say that Uber’s technological innovations were all banal things that its competitors were already about to introduce is downplaying so much of what the company has done outside of its beneficial cost structure. 

  We got perfect information: Where is my car right now? We got full pricing transparency before even accepting a ride: Should I take an Uber or transit or should I drive? We got the ability to get in and out of a taxi without pulling out our wallets: I’ll quickly jump out at this red light. We got dynamic ride pooling and cost sharing: Let’s split this ride 3 ways to bring the fare down. And we got clean cars that didn’t smell.

  Why weren’t any of the incumbent taxi companies do this?

  Three, I fully agree that Uber (unfairly?) benefited from a meaningful cost advantage by operating in the unregulated side of the market. This was a huge boon for the company because, as the data suggests, the demand for taxis is highly elastic.

  But I also believe that the incumbent taxi companies were perpetuating a marketplace that was anything but free enterprise. It ensured that the status quo was maintained and that those who historically benefited from the system continued to benefit from the system.

  Because of this, I’m not sure that we would have seen the innovation that we saw without a company like Uber deciding to operate within a gray area and not ask for permission. Protectionism may have stomped it out. This may be why Hailo – which operated in the regulated side of the taxi marketplace here in Toronto – ultimately wasn’t able to survive.

  Though I suppose you could argue that Hailo’s failure (at least here in Toronto) strengthens the argument that Uber was only able to thrive because of its illegal cost structure. 

  However, it’s important to remember that Uber got its start by actually charging more than traditional taxis. At the outset it didn’t have enough liquidity in its marketplace to compete based on speed and/or price, and so it decided to offer a premium experience. 

  UberX didn’t introduce steep discounts until later on and even today many people will gladly accept surge pricing at multiples of a regular taxi fare. Clearly customers are deriving some other benefits from the app.

  Edelman ends his piece by referencing Napster as an example of another startup that defied legality and was ultimately forced to shut down. Again, shutting Uber down seems extreme to me, but I do agree with his conclusion. Regardless of what happens, the lawful innovations that Uber introduced are here to stay.

  Photo by Carl Joseph on Unsplash

  2017.06.25

• So how’s Uber doing?

  A travel expense management company called Certify recently analyzed over 10 million ground transportation receipts across North America for the 3-month period ending last September (2016). 

  And what they found was that, for the first time ever, Uber and Lyft exceeded traditional taxis and rental cars when it came to business expenses. Uber was at 48% and Lyft was at 4%. So together, these two platforms have more than half of this particular market.

  If you compare this to Certify’s data from the same quarter last year, “ride-hailing services” previously accounted for 34% of receipts, whereas taxis and rental cars were at 22% and 44%, respectively. So Uber is up in a big way.

  This may not be surprising for a lot of you, but I thought it would be valuable to check-in on what the numbers say. 

  I’m hit with two thoughts. Firstly, it’s not a question of mobile apps superseding traditional taxis; it’s a question of one company taking over. And secondly, people seem to be favoring Uber over driving themselves around. I know I’ve been heading in that direction.

  Those are two powerful trends.

  2016.12.14

• Should you buy a car or just take Uber?

  

  https://500px.com/embed.js

  My friend Evgeny published a great blog post today called, On Car Ownership And The Future Of Transportation. 

  And in it he made the argument that instead of buying a car and an expensive downtown Toronto parking spot (average price: $40,000 – 60,000), most of us urbanites would be better of just taking a taxi or Uber.

  This got me thinking: At what point does it really make sense to completely forgo owning a car? (Full disclosure: I own both a car and a downtown parking spot.) So I decided to dig into the numbers a bit more and compare 4 mobility options:

  • Owning a car ($25,000 upfront) + downtown parking spot ($40,000 upfront) and driving yourself everywhere
  • Taking a regular taxi exclusively ($3.25 base + $1.75 per km)
  • Taking an UberX exclusively ($2.50 base + $1 per km)
  • Or, taking a futuristic driverless car everywhere (here I assumed $1.50 base + $0.25 per km)

  With the above numbers, I then assumed 15,000 km traveled per year and an average trip length of 15 km (so 1,000 trips per year). The trip length and number of trips per year matter because of the “base fare” that is charged when you take a taxi or Uber.

  I also assumed that the cost of owning a car is $0.60 per km (estimated from this Globe and Mail article) and that there is an opportunity cost to NOT renting out your downtown parking spot ($200/month). That is, every month that you spend driving yourself around and parking your car, you are forfeiting parking revenue.

  Finally, I looked at a 10 year time horizon and then “discounted” all the costs back to today’s dollars so that I could compare each mobility option.

  So what did I find?

  

  What this says is that if you’re driving 15,000 km per year (average trip length 15km), then you’re better off taking UberX everywhere, as opposed to going out, buying a car and parking spot, and driving yourself around.

  But does this hold true at different travel distances?

  Based on my model, once you hit around 18,000 km per year, then you’re better of with option 1 (owning a car). That’s because the per km savings associated with driving yourself around are enough to offset the upfront costs of the car and parking spot.

  On the flip side, when you drop below 7,500 km traveled per year, even a regular taxi starts to make sense. That’s because you’re simply not traveling enough to reap the benefits of owning a car/parking spot. Again, high upfront costs; lower per km operating costs.

  Of course, there are a number of things I didn’t consider in my model. For one, most people finance their car and parking spot (it is bundled into their home mortgage). So I’m sure there are ways that you could change the above outcomes using leverage.

  At the same time, I didn’t account for the fact that when you’re being driven around (as opposed to driving around) you have the flexibility of doing work, responding to emails, and so on. If you want to attach a value to your time, then the scale would tip back in favor of taxis and Uber.

  But all of this was really just to make one point: look how cheap it could be to ride around in a driverless car. When that becomes the reality in our cities, which it will, it’s going to completely transform our current beliefs around cars, parking, and many other things.

  I guess that’s why General Motors just invested $500 million in the peer-to-peer ridesharing company, Lyft. They know the shit is coming.

  2016.01.05

• The taxi cartel

  

  Taxi by Roland R. on 500px

  https://500px.com/embed.js

  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.

  2015.07.16

• 10 reasons to visit Toronto right now

  

  Toronto Slide by Kyle Anstey on 500px

  https://500px.com/embed.js

  Next weekend a good friend of mine from architecture school will be visiting Toronto from Philadelphia. And I’m really excited to show him the city. (Next month it’s my turn to go to Philadelphia.)

  He’s a fellow city geek. He hasn’t been to Toronto in a number of years. And I haven’t seen him since our trip to Detroit 2 years ago.

  For those of us living and working in Toronto, there’s a lot to celebrate. Sure the Gardiner Expressway East decision didn’t go as I – as well as many other urbanists, including our Chief City Planner – had hoped. But there’s no shortage of other things to brag about.

  So here are 10 reasons to visit Toronto right now:

  1. We’ve created an entirely new business district south of Union Station called South Core. Now the region’s primary mobility hub is in the middle of the country’s most important business district, as opposed to on the edge of it. It’s a better use of infrastructure.

  2. We now have a dedicated train (the Union Pearson Express) that takes you from the country’s busiest airport directly to downtown in 25 minutes. You’ll find local retailers at the stations and a brand created by the brain behind Monocle Magazine. You can even use a smart card to ride it and our local transit system.

  3. We didn’t shut down Uber. Instead our mayor wants to create new policy that will allow these services to coexist with conventional taxi services. We don’t yet know how this will turn out, but I believe it’s a step in the right direction. It’s Toronto taking a leadership approach to innovation as opposed to trying to stomp it out.

  4. We are about to host the largest sporting event in Canadian history. The 17th Pan American Games will have double the number of athletes competing as the 2010 Winter Olympics in Vancouver.

  5. We created an entire neighborhood from scratch in order to house all of these athletes (Canary District). And I think it’s destined to become one of Toronto’s great neighborhoods. I’m saving my first visit for next weekend, so expect a follow-up post on this.

  6. We are dramatically rethinking this city’s public realm. From the plaza out front of Union Station to the new Queens Quay Boulevard along the waterfront, we are prioritizing people and creating more complete streets. It has given Toronto an entirely new urban feel.

  7. We are slowly starting to embrace our forgotten laneways and alleys through the help of organizations like The Laneway Project. And this is going to eventually lead to a further rethink of our pubic spaces and urban fabric.

  8. We continue to be one of the fastest growing cities in the world (certainly in the developed world). As a result, we are building some really exciting buildings by some of the top architects in the world. This includes everyone from Norman Foster to Frank Gehry.

  9. According to a recent report coming out of the Martin Prosperity Institute, Canada is one of the most creative and globally competitive countries in the world, as well as the most open to “ethnic and religious minorities and gay and lesbian people.”

  10. The ATC community is in the process of identifying a new, quintessentially Toronto food dish. But since we have every type of imaginable cuisine here, we’re struggling to pick just one. When you visit, you can help us identify the best and most Toronto dish.

  So there’s a lot to be excited about. I for one can’t wait for us to host the Pan Am Games, starting tomorrow. It’s a chance to show off this great city. 

  So if you’re also in town next weekend and want to geek out about cities, drop me a line.

  2015.07.09