Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Ridesharing has finally penetrated the consciousness of mainstream America. Pink mustaches and silver U’s have crept into cities of varying sizes, and the resulting political battles have raised enough of a ruckus to make Uber and Lyft household names. (That’s a relief to us poor tech writers, tired of endlessly explaining ridesharing to baffled relatives in far-flung suburbs.)
Some might say ridesharing has successfully disrupted the status quo — insert obligatory eye roll here. Certain aspects of that disruption have been covered far more extensively than others. The impact on taxis, of course. The state laws, shifting creakily to encompass this new industry that seemingly emerged from Silicon Valley overnight. Background checks, and safety precautions, and insurance.
But ridesharing also “disrupts” a few things that we’ve heard far less about. These companies haven’t said much about their effects — positive or detrimental — on public transit or the environment. They’ve largely stayed mum on the issue.
When these issues are brought up, by advocates or opinion writers or even by Lyft, Sidecar, or Uber’s local branches, the general consensus tends to be that of course ridesharing will help the environment — it will take cars off the road by encouraging people to share. These sentiments are only compounded by the introduction of the new carpooling services.
Is that really the case? Since they have made it so convenient to get from one place to another, it’s possible that Uber and Lyft have actually increased the number of cars on the road, upped greenhouse gas emissions, and, for some segments of the population, replaced public transportation. I, for one, stopped using unreliable San Francisco buses altogether once these startups cut their costs. Furthermore, since Uber, Lyft, and Sidecar are regulated differently in California, the vehicles used by their drivers aren’t required to meet low emission standards the way taxis are in San Francisco.
Last Thursday, the issue came to a head as the San Francisco Municipal Transportation Agency (SFMTA) released numbers that show taxi rides have declined by more than 50 percent in the last few years. Kate Toran, who is running the Taxis and Accessible Services branch of the SFMTA, told the board that ridesharing’s effects can’t be fully assessed without numbers from the companies. She’s asking the California Public Utilities Commission, which regulates Uber, Lyft, and Sidecar, to do a study on their effects. The city needs the data to adapt its transportation planning accordingly.
A rainbow nation of ridesharing
It’s worth noting here that public transit options, car ownership statistics, and regulations vary dramatically from urban to suburban to rural areas and between countries. Since it’s too complicated to explore the issue nationally, I focused on the San Francisco Bay Area, in the hopes that it could provide a glimpse, albeit not national gospel, of what cities will face as ridesharing expands.
I spoke with Bay Area city planners and researchers to try to figure it out. Turns out, they’re just as baffled and stuck in the dark as the rest of us. Because ridesharing companies won’t release their data — about fleet size, membership size, average trip length, main pick up and drop off spots, vehicle types with average miles and emissions, and other stats — these experts are stuck cobbling together their best guesses as to what’s happening. In San Francisco, the public transit agency runs the taxi system, so it’s able to conduct any research it might need to do on taxis. Ridesharing companies, however, are out of its jurisdiction.
Note: When I say ridesharing, I’m not referring Zipcar, RelayRides, traditional carpooling, or the like. I’m specifically talking about the urban point-to-point rides where you order a car via an app, using technology companies like Uber, Lyft, and Sidecar.
These companies have raised hundreds of millions in investment money to expand in over a hundred markets in the United States alone, and their impact can’t be ignored.
Bracing for the worst, but expecting the best
The SFMTA has asked for customer demographic numbers, but Lyft and Uber have declined. “Ideally, in the sharing economy, they share things,” Tim Papandreou, director of strategic planning at the SFMTA, told me, laughing. “So hopefully they’ll start sharing their data with us.”
For the SFMTA, the need for numbers is particularly dire. Think about all the new startup services the local city government has to account for in its transportation and transit planning: Delivery cars from Caviar, SpoonRocket, Munchery and Sprig. Drivers from Uber, Lyft, and Sidecar. Google Express delivery. Not to mention the big tech commuter buses and – in the future – Google’s driverless cars. “The Amazon Prime air drones — where are they going to land?” Papandreou said. “We think about everything.”
But without data, they can’t prepare for the shift.
If Uber, Lyft, and Sidecar draw people away from the Muni, buses, BART, and taxis, San Francisco will have to change public transit supply to match the decreased demand. That in turn could make the system even less reliable, and people with higher incomes might reject it altogether. “Public transit [could become] a last choice option, and then we have social class segregation, which would be horrible,” Papandreau postulated. “This is why I can’t sleep at night. So many things to think about.”
In some ways, ridesharing companies’ reluctance to work with the SFMTA is confusing. My colleague Katie Fehrenbacher pointed out that if these startups are reducing emissions, that’s good publicity for them and something they should embrace. But since they’re scaling at such a rapid rate — and cutthroat level of competition — this is probably the least of their concerns at the moment.
I reached out to all three ridesharing companies to find out why they won’t release their numbers, but only Lyft responded. Paige Thelen, a Lyft spokesperson, told me that ridesharing’s impact on the environment is “absolutely” something the startup cares about. She would not, however, confirm or deny whether Lyft has refused requests from researchers and the SFMTA to release company data.
“Lyft has only been around for two years,” Thelen said. “It’s only in the last few months that we’ve reached the scale that would make transportation research studies meaningful.” The company has partnerships with the National League of Cities and the federal Transportation Research Board to document the impact of ridesharing on cities, although no studies are in the works yet.
At least anecdotally, it appears Uber, Sidecar, and Lyft’s proliferation has been a good thing for the city. Since the population of San Francisco is growing so rapidly, the public transit system has been overwhelmed. Ridesharing seems to have helped lighten the new load — “seem,” “appear” and “anecdotally” being the operative words, since we don’t have actual numbers.
The SFMTA has been bracing itself for traffic jams since new residents flooded the city in the tech gold rush. But only twelve percent of the new households coming in — as measured via unit construction — are purchasing their own vehicles, which is far less than expected. It’s possible that Lyft and Uber, combined with with public transit, bike sharing, and other options, have made it easier for people to get around without their own cars.
“Something good is happening,” Papandreau said. “It hasn’t collapsed like it was supposed to with all these new people coming in.”
Doing what we can with the data we have
Transportation researchers have been as eager as city government to understand ridesharing’s impact on the city. But they’ve hit the same wall – Uber, Lyft, and Sidecar won’t share their customer information. Certain details about their businesses could be used by their rivals against them, either in marketing efforts or recruitment tactics.
Dr. Susan Shaheen from UC Berkeley’s Transportation Center applied for a grant to survey ridesharing passengers, and initially, two companies (whose identities she wouldn’t disclose) agreed to take part and share their details. But by the time Shaheen secured funding for the project months later, the ridesharing climate had become much more competitive and the operators backed out.
“It’s not too surprising,” Dr. Shaheen told me. “There’s uncertainty as to what these results would’ve unveiled.”
Instead, the Berkeley team was stuck cobbling together a less rigorous study. They surveyed 380 people on the street at ridesharing “hot spots” in San Francisco like North Beach, the Marina, and the Mission. As you might imagine, such an approach comes with its share of drawbacks. These hot spots are likely to include a higher percentage of people out partying and bar-hopping, as opposed to commuters or errand runners. The demographics will skew young.
Nevertheless, if the companies won’t release their own data, this type of study is the only way to understand what’s going on. The primary conclusion was that ridesharing both complements and competes with public transit. For example, of the people surveyed, four percent of them were taking a rideshare to or from other public transit options like the CalTrain. “It was interesting, because we weren’t even intercepting people at those locations,” Shaheen said. “It was just showing up in the data of the last trip people took.” But at the same time, 33 percent of respondents said they used ridesharing on their last trip as a replacement for public transportation.
This isn’t particularly profound stuff, but Tim Papandreau at the SFMTA was excited to receive it. It gave him at least some numbers-backed insight into ridesharing’s clientele.
Pink mustaches and the planet
The study, by proxy, offered insight into ridesharing and the environment. Of the people surveyed who own cars, 40 percent said they drive less because of ridesharing. In California, forty percent of carbon emissions in the state come from transportation, which includes personal driving along with freight transportation, public transit, aviation, and agricultural transportation. The number one determinant of how much someone drives is (shocker!) whether he or she owns a car. Without their own cars, people are more likely to walk to where they need to go.
Some environmentalists are, as a result, enthused about Uber, Lyft, and Sidecar, since on the surface it seems as if their existence makes it easier to live in the city without a car. Amanda Eaken, a deputy director with the Natural Resources Defense Council, is optimistic about ridesharing for exactly that reason. “One of the ways we think about it is anything that gets people out of individual cars is part of the solution,” Eaken told me.
Of course, ridesharing might make it easier for people to live in the city without owning a car, but ridesharing itself involves vehicle travel. So, its impact on greenhouse gas emissions is complicated to assess. “It’s too early to tell,” Eaken concluded. She did admit that she has met with Lyft – at the company’s request – to discuss environmental issues.
We may not know the numbers, but what we do know is that these Silicon Valley darlings are growing bigger by the day, and they’re not sticking with their original proposition or staying only in America. Uber has shown signs of moving into delivery and logistics — not to mention aviation. Look out UPS and Fedex. Lyft has pioneered the new carpooling model that — at half the price — could bring even more passengers into the system. These organizations are in the early stages of transforming transportation and they have massive warchests of capital to take that effort all around the world.
Since they’re not controlled by a medallion system, there’s hypothetically an unlimited number of drivers who could take to the roads. The growth potential is huge and the ramifications unknown.
Are the roads going to fill up and public transit empty out? Will our air get cleaner as we all give up our own cars and take Ubers instead? It’s like an 800 page thriller. Since ridesharing companies aren’t releasing their data, you’ll just have to wait to find out, and hope global warming doesn’t destroy everything before we get there.