The Evolution of Shared Ride and Pooling Services Susan Shaheen
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Going My Way? The Evolution of Shared Ride and Pooling Services Susan Shaheen haring rides is a longstanding We know that technologically, a future with tradition that predates even horse- many shared rides is now possible. What we S don’t know is whether and under what conditions and-buggy travel. Recent innovations, people will be willing to make that transition. however, make sharing a ride easier, Thinking about this possibility requires that we more convenient, and more efficient. understand the history of shared mobility, and Innovative mobility services premised how it interacts with modes we already know. on pooling — getting multiple riders Historic Trends, About to Be Disrupted into the same vehicle — can lower travel costs, mitigate congestion, and Shared mobility is a radical departure from reduce greenhouse gas emissions. the culture of auto ownership that has long dominated the industrialized world. This culture They also offer travelers more mobility became entrenched after World War II, when choices between the traditional interstates, suburbs, and auto-oriented industries bookends of auto ownership and (such as drive-thru restaurants) grew. Almost public transit. everywhere, car ownership increased and public transit use often declined — despite efforts The motivations for pooling are simple. There to boost its ridership. The affluent world, to a are economic incentives. Cars are among the greater extent, was defined, by driving alone. most underused capital assets in our economy, sitting empty 95 percent of the time and usually Efforts to change this situation have for decades carrying only one person the rest of the time. If met little success. Since the late 1960s, public cars were used more often, and if they carried agencies, particularly in the United States two, three, or four passengers, their cost per and Canada, have tried to increase the use of rider, and per hour, would drop dramatically. carpooling and vanpooling. They have enacted But the benefits of pooling go well beyond trip-reduction ordinances to discourage solo cheaper mobility. If the car is carrying many driving, built carpool lanes and park-and-ride people who might otherwise drive themselves, lots to make sharing easier, and used telephone sharing can result in fewer vehicles on the road, and computerized ridematching to help people which means less air pollution and energy use interested in carpooling find each other. and fewer greenhouse gas (GHG) emissions and parking spaces. With more than 1 billion cars and In the United States, these efforts saw modest light trucks in the world, the potential for major success during the energy crisis of the 1970s reductions in pollution and GHGs is huge — in — with carpooling’s commute share peaking in the United States and most other countries. 1980 at 20.4 percent. From there, carpooling’s commute share dropped steadily and was only 9.4 percent by 2013 (see Figure 1). Over the Spring 2020 Transfers Magazine | 1 Figure 1. The decline in carpooling and the growth in commuters driving alone in the United States past decade, advancements in technology, such technically have few employees, because their as smartphone apps, enable people to arrange drivers are contractors — an issue that has now shared rides in a variety of ways. landed their labor practices in controversy.) Their principal innovation was thus not in The Rise and Repercussions of TNCs transportation per se, but in devising computer algorithms that more efficiently matched riders For-hire ride services, such as transportation and drivers. The apps removed the exchange of network companies (TNCs), differ from money from the rider-driver relationship — they traditional ridesharing, as they provide travelers automatically calculated and billed the fares with pre-arranged and on-demand access to — and applied some basic economic principles transportation services and do so for a fee. of supply and demand. By raising prices when The service runs via digital applications by demand exceeded supply, they resolved the connecting customers with drivers — who problem of shortages and long wait times that either use their privately owned vehicles or had long plagued conventional taxis. Both Uber one from a maintained vehicle fleet. Common and Lyft are now publicly owned companies, but service providers include Lyft, Uber, Ola Cabs in neither business is profitable. India, Grab in Southeast Asia, Chauffeur Privé in France, and Didi-Chuxing in China (which The Fate of Taxis bought Uber’s China subsidiary in 2016 and soon became the largest on-demand company in the The TNCs brought both opportunities and threats world). to other shared modes. TNCs may well be an existential threat to the traditional taxi industry. What all these companies share is an asset- As just one example: Uber launched its UberX light, peer-to-peer model of using individually product in San Francisco in 2012, the same year owned cars. Uber, Lyft, and other TNCs are Lyft began operating in the city. Between March large companies that don’t own the vehicles 2012 and July 2014, the number of taxi rides they use to provide rides. Most of their product in San Francisco fell 65 percent and in January maintenance is around their apps and, as such, 2016, the city’s largest taxi company, Yellow Cab, they don’t need or have large inventories of filed for bankruptcy. From New York to Paris, vehicles, equipment, or facilities. (They also 2 | Transfers Magazine Spring 2020 Figure 2. The impact of Uber on taxi ridership in San Francisco taxis have been fighting to block Uber and Lyft, in some markets, and competition with shared sometimes successfully but generally not. mobility services like TNCs. The TNC relationship with public transit, however, differs from their Can taxis adopt some TNC technology to help relationship with taxis. TNCs are, to taxis, direct them compete? Electronic hailing (e-hailing) competition. While TNCs compete with public services, such as Arro, Bandwagon, Curb, transit, they may be able to help it as well. Flywheel, Hailo, and iTaxi in the United States, are a step in that direction. Travelers can use Public transit operators are under tremendous these mobile apps — maintained by either the pressure to improve the quality and quantity of taxi company or a third-party provider — to their service, as more cities become focused on digitally dispatch a taxi. Although in the works improving social equity, urban livability, and air for many years, e-hailing finally emerged largely quality, and they want to tackle problems like in response to the success of Uber and Lyft. climate change and traffic congestion. Partnering When taxi companies have adopted it, they have with shared mobility operators may be one way brought their wait times down, closer to those to help achieve these goals. Public transit often of TNCs. E-hailing alone may not be enough, struggles to make first/last-mile connections, however. In many jurisdictions, regulations still provide service in low-density areas or at off- limit the number of taxis that can operate on peak times, and provide paratransit service. the roads and still require taxis to charge locally TNCs, and other shared operators, can help fill regulated prices, which means they cannot vary these service gaps. their prices to help balance supply and demand, as TNCs often do. Shared demand-responsive services, in general, can help round out public transportation. The Fate of Public Transit Microtransit, for example, provides shuttle- based services that can include fixed or flexible Public transit, like the taxi industry, has struggled routes, as well as fixed schedule or on-demand in the last decade. Transit’s difficulties are services. For riders, these services tend to be less probably linked to a number of factors including expensive than Lyft, Uber, and taxis, but they low fuel prices (which encourage the use of are more expensive than public transportation. personal vehicles), poor public transit service Typically, riders use mobile apps to pay for trips Spring 2020 Transfers Magazine | 3 electronically and track the vehicles as they others are small companies that contract with approach, although a few microtransit services public transit operators and often outsource to use telephone dispatch and cash payment taxis. The takeaway is that these services are mechanisms. Microtransit is very similar to ripe for integration into a larger shared mobility another privately operated service called jitneys. system and can complement public transit (filling The main difference is that jitneys do not use gaps, providing first/last-mile connections, and a smartphone for dispatch or payment, and replacing low-ridership routes). they instead operate in a manner that more closely resembles public transportation. Jitneys The Promise of Pooling can take many forms, and they are common in many cities around the world. In the United As the TNC model has grown, it has also States, however, regulators have perceived these developed specialized niches. Lift Hero provides services as a threat to public transit, and they rides for older adults and those with disabilities, have largely disappeared as a result. while HopSkipDrive and Kango provide rides for children to and from school. One exception is the “dollar vans” of New York City. These vans got their start in 1980, during Among the most transformative services an 11-day public transit strike. They are a shadow could be those that involve pooling — finding transportation service that follows popular bus unacquainted riders who have similar origins and routes (thus competing with public transit), destinations and bringing them together in the but they also serve communities neglected by same vehicle. With pooling services, computer subways and buses (thus complementing public algorithms add riders to vehicles in real-time. transit). While jitneys require a license, many In return for the possibility of a slight delay in unlicensed dollar van vehicles also give rides.