Are ride-sharing and -hailing services like Uber and Lyft causing road congestion? This has been the perception in cities across the country, and the companies have come under fire for it. In New York City, it has led to a proposal to curb, for a year, for-hire-vehicle companies from adding new driver’s licenses (except for wheelchair-accessible vehicles).
Will proposals to limit ride hailing succeed at reducing road congestion? In New York, the answer can be found in a report by the mayor’s office. This $2 million study was conducted by McKinsey and other consultants to investigate whether ride-hailing companies have worsened traffic in the city.
From 2009 (before ride hailing) through 2015, the study finds that reductions in vehicular speeds began long before ride hailing hit the stage, and the pattern did not change after ride hailing. The primary factors of reductions in vehicular speed, according to the study, are increased freight movement, construction activity and tourism, population and job growth.
In short, ride hailing is not responsible for greater road congestion.
From 2009 to 2015, pedestrian growth in Manhattan’s central business district grew by about 18 to 24 percent. This slows cars down; at turns, they have to wait for crossing pedestrians. Furthermore, last year, New York City set a record of hosting almost 63 million tourists — a nearly 30 percent increase from 2010.
Critics may dismiss this report by pointing to a 60 percent jump, since 2015, in for-hire vehicles. But according to a recent New York City Department of Transportation study on traffic speeds in Manhattan’s central business district, between 2015 and 2017, traffic speeds fell by about 4 percent. From 2010 to 2014, before ride hailing took off, speeds fell by 12.1 percent. In fact, every year before 2015 the reduction in speed was greater than the yearly reductions in speed after 2015. The sharpest reductions in speed were between 2012-13 and 2014-15 — i.e., before ride hailing “conquered” Manhattan.
News reports from across the country suggest that evidence of ride hailing causing traffic congestion in other cities has been provided by a series of reports produced by Bruce Schaller, a former policy director at the New York City Taxi and Limousine Commission.
In one such report, Mr. Schaller studied data from two years, 2013 and 2017, and found that there has been an increase in factors like passenger trips, total mileage, the number of vehicles, total vehicle hours and vehicle hours during peak hours in Manhattan’s central business district. He also points to the reduction in speed, especially during peak hours, between 2013 and 2017. Unfortunately, none of Mr. Schaller’s reports examine any other factors that contribute to speed reductions and do not produce any statistical analyses to test whether ride hailing is a primary cause in speed reduction.
This makes it difficult to conclude from Mr. Schaller’s reports if ride hailing is a significant contributor to the speed slowdown. Mr. Schaller seems to be capturing an established pattern of speed reductions that occurred before ride hailing. In other words, even if all ride-hailing services disappeared today, New York City will continue on the path of declining vehicle speeds because of growth in population, tourism, pedestrians, freight movements and construction activity.
This is not to say that ride hailing has zero impact on speed reduction — it certainly does — it’s just not a primary impact, and may not even be a significant one.
There is some survey evidence that New Yorkers who are hailing rides are using it as a substitute for public transit. Subway ridership has been declining since 2015, and so far this year, it is down by about 2 percent. However, in that same survey, respondents indicated that they were just as likely to substitute a car option (taxi, car service or personal vehicle) for ride hailing.
Furthermore, it’s unclear that the public-transit substitution is occurring during peak Manhattan hours. Tim Mulligan, the New York City Transit executive vice president, explained that peak-hour subway ridership is not the problem. The decline in subway ridership is coming from off-peak hours and ridership within and between the boroughs outside Manhattan. This is precisely where there is the least amount of traffic, and notoriously where the subway is the least reliable. In fact, according to Mr. Mulligan, the neighborhoods farthest from Manhattan were the same neighborhoods that have seen the largest growth in ride-hailing usage. Sixty-six percent of people in Northern Manhattan and Northern Bronx indicated they use ride-hailing services to replace transit trips.
A ban on new ride-hailing drivers will not solve the problem of road congestion since it is being primarily caused by other factors. The City Council should look to more effective proposals to address road congestion. One is congestion pricing: charging higher prices during high-traffic times, such as imposing higher fees on bridges and tunnels during peak hours. The idea is to discourage people from driving during those times, and the revenue generated should be used to invest in improving public transit as a viable alternative. According to some studies and trials by cities around the world, congestion-pricing schemes have been effective at reducing traffic and raising revenues. In past discussions with Gov. Andrew Cuomo, Mayor Bill de Blasio has not been open to this solution.
Yet the proposal Mr. de Blasio does support will harm an already existing congestion-pricing scheme. Ride-hailing companies have a built-in congestion-pricing mechanism — “surge pricing” or “peak pricing.” These higher prices deter riders from frivolously using ride hailing during busy times because prime-time fares are higher. Higher prices encourage many potential customers to opt for the subways. For comparison, taxis have a fixed $1 surcharge only between 4 p.m. and 8 p.m. on weekdays, which is too small an amount to effectively deter many riders.
Before the City Council chooses to limit ride-hailing services to New Yorkers, especially those in the boroughs outside Manhattan, it should test whether claims about those services are well-founded. As it stands today, there is no compelling evidence that ride hailing has been a primary or significant cause of New York’s traffic problems.
Liya Palagashvili (@MissLiyaP) is an economics professor at State University of New York-Purchase.
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