Tag: uberpool

• Road pricing for whom?

  

  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?

  Photo by Austin Scherbarth on Unsplash

  2018.03.06

• 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

• Shareable cities

  

  The MIT Senseable City Lab recently looked at which cities are the most “shareable” when it comes to ride sharing services such as UberPOOL. Their goal was determine what fraction of individual trips (inefficient) could be shared or pooled (more efficient). To do this, they developed a single “shareability curve.” Full research paper, here.

  Not surprisingly, New York City does very well in this analysis. Its shareability is well above 95% for a delta of 5 minutes. That’s because the city has a large population, a small geographic area, enormous density, and lots of taxi traffic. (They used taxi data in their research.)

  But New York City also does very well when it comes to transit ridership. Highest in North America. So it strikes me that the characteristics that make a city “shareable” also apply to transit – which is effectively another form of ride sharing. Might we see the distinction between these 2 forms of mobility blur in the future? I think so.

  2017.03.06

• Uberpooling your way to cheap rides

  This morning on my way into the office I ran into a friend who lives in my building (downtown). She works in midtown and so I asked her how she gets into the office. She told me that she either takes the subway or an Uber, but that increasingly she has been taking Uber, particularly on the way home.

  We then started talking costs and she told me that what she does is carpool with a friend from work using UberPOOL. They live nearby and so what they do is leave from the same place at night (the office) and then select a midpoint location between their homes for the drop-off. After splitting their portion of the fare, the ride costs her about $3.25.

  As she was telling me this, I couldn’t help but think to myself: Wow, this is massively disruptive to transit. That is the same cost as taking the subway. So why take transit? With the subway, there may be a speed argument in certain instances, but that certainly wouldn’t be the case with some of Toronto’s streetcar lines (such as the King line). It’s faster to walk.

  However, there are obviously geographic limits to how far you can go in an UberPOOL before your costs greatly exceed taking transit. But as Uber and other similar services continue to bring down the price of a ride (eventually the labor cost component will disappear), how big does that area get?

  All of this – including my own mobility patterns – has got me thinking yet again about the role of transit in the city of tomorrow. 

  One segment that continues to be underserved is the regional scale. Here in the Greater Toronto Area, we are working on that by transforming our commuter rail service into a two-way all-day Regional Express Rail service. Today that strikes me as being hugely valuable. And unless driverless vehicles somehow solve our traffic problem, it will likely remain that way.

  I would love to get your thoughts in the comments below.

  2016.11.02

• UberPOOL is the new networking tool

  

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

  UberPOOL launched in Toronto last week. It was tested in Toronto last summer and it’s been available in other cities for awhile, but now it’s officially here.

  If you’re not yet familiar with UberPOOL, it basically allows you to share your ride with other people who are headed in the same direction. I’ve heard some people on Twitter complain about route inefficiencies, but I’ve had only positive experiences with it so far.

  The disadvantage of this system is that it’s a bit slower. You’re stopping to pick up other people on the way. But the advantages of this system are twofold. First, it’s cheaper, which means it’s already starting to eat into my transit usage. And second, you get to meet new people everywhere you go.

  This second piece is really interesting to me, because I place a lot of emphasis on getting to know as many people as I can. That’s one of the reasons I blog every day and one of the reasons I spend a lot of time on Twitter. I get exposed to people that I might otherwise not meet. And I believe there’s huge value in that. I want to sit down and have a coffee with everyone. (Time doesn’t always allow that to happen.)

  Because since the beginning of cities, personal connections is one of the things that has made urban life so valuable. Here’s an excerpt from a CityLab article published back in 2013:

  “If you look at the interaction patterns of cities,” Pan says, “You will see that they grow super-linearly with population with the same growth rate as productivity, as innovation, as crime, as HIV, as STDs.”

  All of those facets of urban life have appeared until now to share a somewhat mysterious mathematical relationship. But this research suggests that this particular super-linear growth rate is directly tied to how dense cities enable us to connect to each other. As cities grow, our connections to each other grow by an exponential factor. And those connections are the root of productivity.

  “What really happens when you move to a big city is you get to know a lot of different people, although they are not necessarily your ‘friends,’” Pan says. “These are the people who bring different ideas, bring different opportunities, and meetings with other great people that may help you.”

  Clearly there can also be some negative externalities associated with urban life – such as crime and disease. But it’s also clear that for a many people, the benefits far outweigh the potential negatives. Big cities tend to make us more productive. And as we’ve discussed here before, they can also bring us happiness in ways not associated with economic success.

  If you’ve used UberPOOL before, I would be curious to hear about your experiences in the comment section below.

  2016.01.24

• Tech Tuesday: Uber testing out “Smart Routes” in San Francisco

  Uber is currently testing out something called “Smart Routes” in San Francisco.

  Basically it works similar to UberPOOL (where you carpool with strangers to bring the cost down), except that your pickup location (and trip?) is confined to a specific route. 

  This means less detours and more rides for drivers, as well as even cheaper fares for passengers. But just like public transit, you’ll likely have to walk a few minutes to get to the closest route. 

  Here’s a screenshot of what that looks like (via TechCrunch):

  

  The green line is the “Smart Route.” So all you have to do is select a pickup location somewhere along that green line, and you’ll save a bit a money. Currently it’s “$1 or more” off your fare, but who knows what it might be when this feature actually rolls out.

  This is fascinating to me because it’s starting to look and feel a lot like a conventional bus route. But in this case, the routes can change and new routes can be easily created as demand changes. 

  So it’s not just taxis that need to be thinking about Uber. It’s public transit authorities as well.

  2015.08.25

• How Uber is driving down the cost of transportation

  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.

  2015.02.04

• Where Uber operates and where it’s banned

  Earlier this month, Bloomberg published this map showing where Uber operates and where it’s been banned (or is being challenged). You can click on the map for a larger version.

  

  Uber operates in about 250 cities across the world. But it’s being challenged in a lot of them, including Portland, San Francisco, Los Angeles, Toronto, Rio de Janeiro, Paris, Berlin, as well as others.

  I don’t want to dismiss any of the safety concerns that have arisen lately, because those are very serious and they need to be addressed. Life safety is paramount. But I continue to believe that banning a service that many people clearly want to use isn’t the right solution.

  On top of that, I think it could lull many of the local taxi communities into a false sense of security about the future. Uber is moving incredibly quickly. UberX launched in Toronto in September of this year. And UberPOOL – their new carpool service – is likely next.

  With these releases, Uber is working towards a specific vision for the future: Their goal is to eliminate the need for private vehicle ownership. Should they be successful, this will not only impact taxis, but also car manufacturers and urban mobility in its entirety.

  So as difficult as it might seem right now, I think urban leaders would be better served trying to figure out how to harness these innovations. Cities have been trying for decades to get people out of their cars. Uber wants to do the same.

  2014.12.27