Uber is a Slow-Motion Tragedy

Photo:  Uber
Photo: Uber

Why is there even an Uber?

We know the app-based cabs like Uber and Lyft make cities worse. Even the companies admit they have increased traffic by 13 percent in San Francisco and 8 percent in D.C.

We know they’re undermining transit. Uber was open about its status as a competitor to public transit in its disastrous IPO. And one study estimates that Uber and Lyft alone have caused a 13-percent reduction in transit ridership in San Francisco over the last decade. Transit ridership is cratering in other cities, too.

Uber and Lyft’s business model is predicated on massive labor exploitation. Their millions of drivers enjoy next to zero rights or protections because they are classified as “independent contractors,” a galling misrepresentation that could reverberate with future generations of workers for decades.

To top it all off, Uber can’t even make money — and loses shareholders’ money obscenely. The company lost $5.2 billion last quarter alone. In all, Uber has lost about $16.86 billion, Aaron Gordon at Jalponik reports. And Lyft has lost plenty too — and still expects to lose another billion next year (though less than in previous years).

That’s a lot of money that customers are pumping into app-based cabs. It’s not completely apples to apples, but imagine if all that money had instead been spent on transit — those tens of billions could fund about a half-dozen transformative rail transit projects across the country, such as L.A.’s Purple Line Extension, Minneapolis’s Green Line Extension, Seattle’s Link Rail Extension, D.C.’s Purple Line and others.

Instead, we have worse traffic, worse transit, more pollution. To top it off, a bunch of retirees invested in mutual funds are now losing their hard-earned money to make it all happen.

Of course, there’s a chicken-and-egg problem here: Uber and Lyft’s urban customers are taking literally millions of rides in the companies’ cars — an option that simply did not exist a decade ago. They’re choosing Uber and Lyft over public transit and biking (and, to a lesser degree, their own cars) for a reason — it’s faster and more convenient than public transit, and is an affordable luxury for many.

It’s not up to Uber and Lyft to fix that problem — it’s up to our leaders to give their constituents more options for cheap, safe commuting. Unlike Uber and Lyft, mass transit does not need to make a profit, so mayors and governors should invest public money on the greatest public good: public transit.

Until then, we’re stuck with Uber and Lyft filling a gap that never should have existed. Analyst Bruce Schaller estimates, 60 percent of all trips in Uber and Lyft would have been made by walking, transit or avoided — had the service not existed. Only 17 percent of trips would have been made in a private car. And for every mile it replaces in driving, it adds 2.6 miles of driving, since Uber and Lyft business model relies on having drivers cruise without passengers.

Cities are starting to figure this out. New York just capped the number of Uber and Lyft drivers and is now requiring the app-based cab companies to reduce cruising by 10 percent. Boston is considering fees on every ride to reduce congestion and raise money for local governments. And Vancouver doesn’t allow the app-based ride share companies at all.

It’s a start.

11 thoughts on Uber is a Slow-Motion Tragedy

  1. App based ride share will be starting British Columbia – including Vancouver – in September. The province requires that drivers have a Class 4 (professional driver) license and appropriate insurance. These requirements together my deter drivers.

  2. I have to deal with these Uber and Lyft drivers daily. I drive public transportation. I can not tell you how crazy it is to try and pull into my bus zone with a (40 ft bus) and there is a Gober or Laff car blocking me from my zone. You honk the horn because you still have 20 feet hanging in the intersection and they flip you the bird. Or they just outright turn on their flashers and stop to let out passengers in the street without pulling to the curb with the back-end of their vehicle still in the lane blocking you from proceeding. The ones that drive the Prius cars are the worst, they must think they are a Super Hero or something… Imagine this… Prius Gober or Laff car rolling down the street Northbound, you in a 40 foot bus traveling Southbound at 35 mph and out of nowhere that Prius makes a U-turn in front of you to pickup a passenger standing on the Southbound side of the street at your bus zone and but of course they pull into your bus zone and leave the butt end of their car in the lane and throw on their flashers. They are a dangerous bunch and they see nothing wrong, or the fact that you as a professional need to slow that bus down without causing anyone on your bus to fall to the floor. I think they should all be required to get a Class B (Commercial License) maybe they would drive a bit more careful.

  3. My prediction (and my batting average is no better than 1 in 10!): Uber/Lyft and taxis will converge. U/L will be more regulated, pay more fees, put signs on their doors and ads on their roofs, and taxis will add apps, clean up the vehicles, etc. Net, back to where we were pre-Uber, just with more traffic. As noted re Vancouver, a world where ridehail exists, but run essentially as a taxi fleet. Same in Japan. In the UK it now takes half a year to qualify as an Uber driver… sound familiar?

  4. Uber and Lyft illustrate what is wrong with capitalism. City taxi cab companies were slow to adopt mobile apps. So wealthy investors pumped billions of dollars into creating private, unregulated, exploitative taxi companies that had slick mobile apps. Now we have a mess to sort out.

  5. Good summary of all the negatives. Here are the positives:

    – They reduce car ownership, especially for those that drive often.
    – When public transportation is crowded or broken down, there is another option to get to work.
    – The elderly and the youth and the poor who cannot drive or afford a can get around.
    – Public transportation is too costly and broken in sprawling suburbs (anywhere outside the city).
    – Ride hailing apps incentivize drivers to use electric cars indirectly to offset the cost of gasoline and make driving more profitable.
    – People getting around the city is healthy. They are spending their money at businesses, getting out and away from their TV/computer screens, and socializing with others.
    – Millions of opportunities are created that allow people to work with 100% flexible hours with no degree and experience.

  6. I agree with Jenny on most of her points – I especially like that TNCs increase an individuals ability to imagine life without car ownership – some people need help/support on this transition. That said, I do imagine that once the VC infused teenager phase of TNCs passes these rides will be priced to adequately reduce demand. Here’s hoping that new pricing goes to better wages and/or public funds used to balance externalities. This is where policymakers and governments should be focusing their efforts.

  7. Uber is nothing but a response to what people desired, transportation they could summon without the degredated S***storm of taxis. The fact is govt is ruining the transit industry, the infrastructure is falling apart faster than they can replace it. As Jenny mentioned above. Uber/lyft and others have upset the transit industry. A century ago, anyone could buy a car, paint the word taxi on it and they were in business for themselves.

  8. Money is being invested in Uber and Lyft because the investors hope to make a profit.

    Investors would never put money into transit since there is no profit to be made and the money they put in would be lost.

  9. Seems the bottom line of this discussion is that unregulated capitalism and unregulated businesses destroy our social and cultural patterns, make our life experience more stressful, take monies that could be better used to improve public transit, screw the working class and put them in a position where they endanger themselves, their customers and the general public because they make poor decisions just to make enough to survive. Millennials and others who are in time-sensitive situations (just slow down, what’s the hurry?) think that it’s a great deal, but they fail to see the big picture. It could all be good, or better, but it’s up to our elected/hired/well paid representatives to regulate the whole deal. Failure to regulate will just put us all in future debt and misery. IMHO

  10. Glenn points out the only way that Uber and Lyft can be profitable, because they need to stymie new entry. Come on, regulators!

    I just posted on my blog a quick read of their numbers, data 2017Q1 through 2019Q2. They have to raise fares dramatically. Back to Glenn’s point!

    I won’t add a link, but my name is not common so it’s easy to google Autos and Economics.

  11. If public transportation was efficient, then there would be no need for Uber and Lyft. In Denver, buses take you NEAR things, but not TO things in most cases. Many buses run so far apart, especially on the weekends, so I’ll take Uber, instead of waiting an hour for the next bus.

    When I lived in Cleveland, getting a taxi was damn near impossible. You’d call and they’d never show up. You’d schedule a timed cab and even then, they wouldn’t show up. Large cities with lousy public transportation can only blame themselves for this mess.

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