Skip to main content

Uber, Lyft, and competition

The below article wonders if Uber/Lyft will ever be profitable. Seems likely to me they will. It's the belief that their promises aren't as grand as they make that will lead to that. When investors stop believing that, they'll stop funding discounts, and profitability will emerge seemingly spontaneously. It's probably less than what Uber is promising, as there will be competition.

It's worth noting that in addition to competition being somewhat local, Uber and Lyft don't just compete with taxis, but also with public transit and personal vehicles. When competing with public transit, cities should regulate, as there are many public goods arising from quality public transit. The story for personal vehicles however is different, which have most of the same negative aspects of ride-hails, plus some additional negative externalities (parking is a big one). Thus the first step in regulation should be one that targets both personal vehicles and ride-hails.

I support a congestion charge. Even if your preference is strongly toward using a personal vehicle, you should too. The nudge toward users who have a very weak preference toward a personal vehicle will free up road space, creating less traffic for you. Even more true if the revenue gained is used to fund public transit which creates a little extra draw for those on-the-fence drivers.

Those changes will also enable new possibilities in city design, which you may not consider possible today. The attractiveness of that system might surpass both your present day reality, and the less traffic clogged future, and you'd change your mind about personal vehicles.. but if not, you still have less traffic.

Comments

Popular posts from this blog

Should roads be free? Can we change that?

It's ironic that in a country where providing free access to basic healthcare, food and water are so contentious, we've been providing one resource for free in astounding quantities: Roads. It's even more ironic, that while proving the roads (and often parking spaces) for free, we've neglected to provide the real need, transportation.

Should roads be free? The evidence, from a 50+ year experiment is no. Free roads leads to overuse and traffic jams, a net negative for every potential road user. There is no amount of roads you can build that prevents this tragedy of the commons. Every major city in the US has traffic jams. A city with "good" traffic is one where those only happen for an hour in the morning and an hour in the evening, and only at certain points.

The trouble with trying to build your way out of traffic jams is that housing and driving patterns always shift to consume everything to capacity and beyond. There is also the cost in terms of money, env…

Exceptional harms

California was pursuing a new transit oriented development bill, SB50. It morphed into a general housing bill, before being killed by a powerful Senator. His arguments, shared by other LA residents, was that they didn't want local control taken away.

On the surface, that sounds reasonable, who doesn't like more direct democratic processes? But local zoning has failed to address the problems the bill targets, and it is predictable that it will continue to fail, so long as political engagement maintains its current form. In many places, city-by-city control could work, but California is such a jigsaw of localities that each city has incentives to keep following business as usual, which means, zoning restrictions to prop up property values, which inevitably lead to housing shortages and unsustainable costs for anyone who isn't getting the land value windfall.

Even those getting the windfall are trapped into non-optimal decisions by housing immobility. That immobility has be…

Finding your way: Public Transit and Uber

Uber has been disruptive in many ways.  One way, which has been a great disappointment, is the effect on public transit systems.  It was once hoped that ride hailing would provide an assist to public transit, as a gateway to abandoning car ownership.  There have also been hopes that suburban commuters would use ride-hailing as their connection to public-transit which is not accessible by walking in these areas.  Multiple studies have confirmed these hopes have largely not materialized, and public-transit has been weakened.

Cities have reacted, mostly by putting barriers to ride-hailing growth.  Sometimes they are collecting extra fees, sometimes placing new requirements.  But mostly these efforts don't do much to change the relationship between ride-hailing and public-transit.

I work with a local group that spends time thinking about automated car policy, how to get the most good and the least bad.  We've discussed a proposal that fits ride-hailing, in the here and now, just …