Recently I asked a colleague why he used Uber. He said that the bus would cost $2.25, and Uber would cost about $5. So I asked him, “What if the price for Uber was $10?” He said he would take the bus. So because he was only paying half the cost of the ride, he used Uber.
He’s not alone. Ridership on public transportation is down in nearly every major American city, including New York City (which recorded its first ridership dip since 2009). This is hurting the revenue that public transportation needs to sustain itself. Uber passengers and public transportation users alike now find themselves stuck in heavy traffic for far longer because of what’s been called “Uber congestion.” In Manhattan, there are five times as many ridesharing vehicles as yellow taxis, which has caused average speeds to decline by 15 percent compared with 2010, before Uber.
The company’s new leadership continues to deny that it is contributing to these ill effects. Mr. Khosrowshahi even insists that Uber can help solve congestion by adding a small number of electric cars, and that it could start using flying taxis in five to 10 years (which is preposterous — Uber doesn’t even have a prototype).
But a study of the effects of ride-sharing by researchers at the Institute of Transportation Studies at the University of California, Davis, found that ridesharing has resulted in a significant rise in the number of trips made and miles driven in an auto. The study also found that the vast majority of ride-sharing users (75 percent) still owned a car, and the small number who have eliminated their own vehicle (9 percent) have merely swapped it for someone else’s car — their ride-sharing driver’s. From an environmental standpoint, Uber is taking us backward.
Ride-sharing services could potentially add something positive to our transportation options, but only if they are regulated properly.
First, regulators should limit the number of ride-sharing cars. Traditional taxis already have a sensible limit to minimize congestion. A balance must be found between having enough taxi-type vehicles but not so many that the streets are choked with traffic. Fix NYC, a panel appointed by Gov. Andrew Cuomo of New York, has called for all Ubers, Lyfts and taxis to be outfitted with GPS technology to track congestion and to charge a fee on for-hire vehicles that could help reduce traffic and generate hundreds of millions of dollars for public transportation.
Second, Uber should be prohibited from subsidizing its fares. It should be required to charge at least the true cost of each ride. If Uber refuses, a “fairness fee” should be added to each fare.
Third, ride-sharing companies and their vehicles should be required to follow the same laws as traditional taxis, especially in terms of background checks for drivers and insurance requirements.
Fourth, Uber should be required to share its data with regulators, including information about its drivers and their contact information, so that members of this “distributed work force” can more easily contact one another and organize collectively if they choose.
Finally, regulations should ensure that Uber treats its drivers fairly. Mr. Khosrowshahi asserts that drivers’ wages are adequate, but according to one study, more than half of Uber drivers earn less than the minimum wage in their state, and some even lose money once the costs of driving are taken into account. That helps explain why, according to Uber’s own internal study, half of its drivers leave after a year.
When he took on his role, Mr. Khosrowshahi said he would learn from the company’s mistakes. But it remains to be seen whether he is willing to fix Uber’s biggest misstep: a business model that harms drivers and the environment, and drains away passengers and revenue from public transportation.