Ride-hailing services like Uber, Lyft, and Via have grown meteorically since launching just a few years ago. Meanwhile, transit ridership nationwide is declining, and some studies posit a direct connection. As a result, many transit supporters have sharply criticized these services.
Some fears are warranted, but ride-hailing is also offering people a valuable transportation service. Regardless, this mode is not going to disappear. Urbanists need to think about policies that can shape ride-hailing into a positive for cities. The companies involved (some of them, anyway) are in fact willing to be partners in such an effort.
DC can take two small steps in this direction when it approves its final budget on Tuesday, June 26. It should require ride-hailing companies to share information about their trips, and create an incentive in the tax code to share trips.
Ride-hailing is providing a service people value
Chances are you've taken a ride-hailing trip, and if you have, that means it was more convenient or more cost-effective or just more available than other options, even transit. That means ride-hailing added value for you. I've taken it to destinations where transit was not a viable option, or late at night or on the weekend when transit unfortunately just isn't very dependable right now.
Those of us who are urbanists appreciate the liveliness of cities and downtowns: stores and parks within a short walk; diverse and interesting people and buildings; convenient transportation to get around without having to own a car, drive, or park. Transit has long been an indispensable part of that vision.
It likely always will be, in some form. But as technology evolves, it's less clear if that form will be the same as it is today. Maybe some of it will be public and some will be privately run. In developing nations, private “jitneys” have always been a part of the “transit” landscape. The same has long been true for lower-income neighborhoods in US cities poorly served by transit. Jitneys cannot replace everything that trains and buses do, but they may well have a stronger place in our transportation system than they do now.
Whether people get around by public or private transit-like vehicles, both enable people to live in more urban places, more conveniently, without having to own a car. Both facilitate spending less of a city's space on parking lots or massive amounts of dollars on parking garages. If ride-hailing makes more walkable urban places possible, including ones in suburbs where transit infrastructure has historically been spottier, that's a win.
Ride-hailing is probably also adding to traffic and cutting into transit
Nationwide, one study estimated ride-hailing services now make up nearly as many trips as all public buses, including 250,000 trips per day in San Francisco, or 20% of all vehicle miles traveled. In DC, exact figures on the number of ride-hailing trips are not available, but a back-of-the-envelope estimate from the Council of Governments puts the number at about 123,000 trips a day or 6% of motor vehicle trips inside the District.
Studies in Boston and New York found evidence that the growth of ride-hailing is adding to congestion. Some of that might be “good” congestion — the Boston survey found that 5% of ride-hailing users wouldn't have taken the trip at all. While maybe some people are taking unnecessary trips, some may be going to a restaurant (and generating economic activity and tax money) who wouldn't have otherwise. 41% of ride-hailing users would have taken a personal car or taxi, so in those cases the ride-hail wasn't putting another car on the road.
But, the Boston survey also found that 12% would have walked or biked and 42% would have taken transit. An MBTA survey found that 30% of riders said they'd reduced their T usage because of ride-hailing. (It's worth noting that another study, by Bruce Schaller, estimated that 15-33% of ride-hailing riders would have taken transit, so the Boston number could be high. Regardless, it's significant.)
Let's also not forget that in DC (and Boston), the quality of transit service has not been exemplary and many riders have good reason for trying alternatives.
Urbanists worry that falling transit ridership can put transit into a “death spiral” where lower fare collections mean service cuts, which mean transit is even less appealing. This happened when the private car became popular, and while ride-hailing is more compatible with urbanist land use, it's still a concern that too much of a good thing can become a bad thing.
There is also the question of how many cars city streets can fit, particularly at peak times. Metro and the major bus lines through downtown Washington bring far more people into the city than cars could alone, even accounting for carpools.
Congestion and transit aren't the only concerns about ride-hailing. Right now, the services usually don't serve people who use mobility devices such as wheelchairs or who have service animals. They rely on workers who aren't full-time employees and thus don't qualify for benefits and workplace protections, and they aren't as accountable on equity.
These are important issues that can't be ignored, and public policy should tackle them. But the services aren't going away.
Who's most of the traffic? Private cars
In the DC budget, Mayor Muriel Bowser proposed raising an existing 1% tax on ride-hailing to 3.75%, and Chairman Phil Mendelson raised it further to 6% in the version of the budget bill which passed the first of two required votes May 15.
I don't have a problem with ride-hailing being taxed to address some of its externalities, but let's also not forget that driving a private vehicle is not taxed one cent. Gas taxes recoup some but not all of the cost of roads (and ride-hailing pays gas taxes too), and there's a tax on off-street parking garages, but only when the driver pays for the garage (as compared to free employer-provded parking, say).
If ride-hailing is 20% of VMT in San Francisco and 6% in DC, that means that private cars make up nearly 80-92% of VMT in these cities. That's why we have traffic. If half the people riding in private cars now switched to ride-hailing services and shared them, we could slash traffic and pollution. How can we make that happen?
The key is sharing
The important word, though, is “shared.” Un-shared ride-hail vehicles may not take up parking spaces, but they do drive around with no passengers some of the time. One ride-hail trip often really is two trips, an empty trip to pick you up and then your actual trip.
If ride-hailing trips start being carpooling trips at substantial rates, though, it mitigates this. The more sharing, the more it's mitigated. Shared ride-hailing can be considerably more efficient and greener than private driving (though less so than transit).
That's why I worked with ride-hailing companies to propose an alternative tax structure before the May 15 vote, a setup which was approved by the council's finance committee. The proposal would tax shared rides at a lower rate than un-shared.
The real best policy solution is to charge all vehicles in some fair way for the road space they take up, such as tolls or congestion pricing. On this, ride-hailing companies have been and continue to be some of the strongest allies, advocating directly for the proposed New York congestion pricing system (which ultimately did not pass). Transit riders aren't the biggest market these companies are trying to woo to ride-hailing; private drivers are.
A number of urbanists have penned articles castigating ride-hailing generally as harmful, like Andy Furillo in Mobility Lab or Paris Marx in Medium. Furillo argues that DC should tax all ride-hailing trips higher because they are all worse than a transit trip. While it's fair to tax all trips to some extent, shared trips in particular are also better than a private car trip. If tax policy merely tries to punish people for taking shared cars in hopes they'll take transit, that leaves little solace when transit isn't offering a practical alternative right now.
Just you wait for autonomous vehicles
If the effect of ride-hailing on traffic is worrying some people, just wait for autonomous vehicles. In essence, ride-hailing trips will become nearly free. It's reasonable to expect that far, far more people will take a ride-hailing trip when it's essentially free.
I honestly don't see a lot of people willing to wait for the traditional bus any more, except where we take steps to give buses a faster ride than private cars. If people own private autonomous vehicles, then taking your private car will be as fast as a bus with no waiting (like today), but on top of that, you won't have to have the stress of driving and won't have to park it (just send it home or drive around!)
In other words, autonomous vehicles will have all the benefits of driving without the costs. If people don't own private autonomous vehicles, then just call a ride-hailing vehicle and don't worry about waiting 10-30 minutes at the bus stop.
Experts think so too. One study by Fehr & Peers estimated that widespread private autonomous vehicle use will mean a 47% rise in vehicle miles traveled and at 26% drop in transit rides (wow). If the vehicles are shared, VMT would increase by 27% and transit drop by 20%.
So, what's the role of transit? People will still take a higher-capacity vehicle, like a bus or train, if there's a significant incentive in time or cost to do so. We could create dedicated lanes for high-capacity vehicles, which could be just buses but maybe could be a combination of public buses and private bus-like services. We could also charge by the road space used for travel into congested areas, so it's in someone's interest to either use a publicly-run or privately-run shared van.
Transit agencies, too, need to adapt, like running some more dynamic services, especially in low-density areas, which pick up a number of people and drive them to a business district or rapid transit station instead of a current lengthy, winding bus route that has to get to every block.
In the automated future, what's really bad for cities is people driving private autonomous cars around, even sending them to circle empty while they run errands. Ride-hailing could be a major component of a better automated future where congestion decreases instead of increases.
Automakers are likely to want to convince every American to buy an autonomous vehicle. Ride-hailing companies can be allies of urbanists in this scenario, because they'll also want a world where car ownership isn't the rule and instead, you walk out your door and take someone else's vehicle where you need to go.
What DC should do now
The final vote on the DC budget is scheduled for Tuesday, June 26.
The council should restore some or all of the split tax rate which encourages sharing over private rides. The companies have been lobbying hard for this, and while that surely means they'd pay less tax, it also means they seriously expect to push a lot of riders toward shared rides. That's something we should reward.
Also, the council should finalize a requirement that the ride-hailing companies share data on the trips they are taking. For all the above reasons, cities need to understand how many people are riding on these services, where they are going, and when. I've been asking councilmembers to require this since 2014, and this year, they agreed.
Since the May 15 vote, I've been working with ride-hailing companies (who didn't want data sharing at all at first) to tweak the language to meet DC's needs (and WMATA's and COG's) for studies and analyses, while also protecting rider privacy and companies' confidential business logic. The council should adopt this version which we've agreed upon.
In the long run, we should all talk about how to fairly price the roadway for all users, so that all pay for transportation instead of exempting one majority group of users. And we should start planning for an autonomous vehicle future, so that vehicles are shared and electric, and so transit can move faster when it needs to. We should ensure that drivers at ride-hailing companies are treated fairly, and think about the future when those jobs disappear.