Tag Archives: sharing economy

subsidizing Uber as an alternative to transit

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A suburb of Orlando plans to subsidize 20% of all Uber rides, and 25% of ones that begin or end at a train station. It kind of makes sense that a small city with no previous investment in transit would choose to do this. There is no capital investment required, so they could just set a budget and stop the program for the year if they exceed it. They seem to think it will also help with road building and maintenance costs. I don’t quite get that – you assume people take trips because they need to get from point A to point B, and changing the economics of what vehicles they choose may not affect overall demand or reduce wear and tear. It might even increase demand if people take trips they would not have previously. It could drastically reduce the amount of space needed for parking, and that space and expense could be repurposed for something else. It could definitely cut down on drunk driving. They mention that it could hurt the poor, but I think all you need there is a hotline with operators who can book calls and arrange payment for people who don’t have an internet connection. It could provide jobs for laid-off taxi dispatchers.

Uber and car ownership

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It appears Uber may be having a small effect on the number of people who want to own cars. This article also says they are working on self-driving cars.

In a recent survey of 2,000 adults ages 18 to 64 conducted by Frank N. Magid Associates, 18% of respondents said they had used Uber in the past year, and of those people, 22% said they are likely to hold off on buying a new car because of the availability of the service.

“Uber for kids”

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What’s the busy, car-free urban soccer mom (or dad) to do when they occasionally need to pack the kid off to a remote inaccessible (except by car) suburban area? Here’s an idea for an Uber-like service where the drivers are certified in childcare.

Parents schedule a ride with a ‘CareDriver’ and are sent a short bio for that driver, a picture, and are required to enter in a code word for the ride. The parent then relays that information to the child, and then to the school or daycare organization from which the kid is getting picked up. That way, little Tommy or Patty knows how to identify their ‘CareDriver’ through both the photo and the code word.

Parents can track the ride in real time through the app and have multiple methods of contacting the driver at any time…

All of the drivers on the platform go through a rigorous, 15-point certification process. They must have at least five years of child care service experience, alongside passing a number of background checks, criminal background checks, as well as getting fingerprinted. HopSkipDrive also ensures that their drivers are TrustLine certified, which cofounder Joanna McFarland describes as the gold standard of childcare certification in the state of California.

June 2015 in Review

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Negative stories:

Positive stories:

NYT and Cutting Edge Transportation

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There was a time when I thought that if the New York Times told me something, it must be true. Like there are weapons of mass destruction in Iraq, for example. I am a bit more skeptical these days, and I thank the New York Times for opening my eyes to seeking out more diverse sources of news. Still, they have suddenly noticed that autonomous cars and ride sharing are happening, and I think they may be on to something! I just hope these things are not like beards, which are now officially uncool because the New York Times has called them a trend.

sharing apps

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Here’s an article in Washingtonian about new transportation sharing apps and delivery services, and how they are changing the demand for car-dependent neighborhood design in Washington D.C. It’s a feedback loop that just continues to pick up steam once it starts. And this is before computer-controlled vehicles really come into their own, which is going to change everything.

That process works like this: First, it gets easier not to have a car. In recent years, things such as improved public transit and 69 miles of new bike lanes in the District alone have made Washington an easier place to navigate without driving.

Next, new digital businesses—Uber, Instacart, Car2Go—capitalize on this market. (Google has even made noise with a far-fetched idea to roll out a ride service featuring driverless cars.) One of the things these services collectively do is make up for some of the things you lose—say, access to a wonderfully big, suburban-style grocery store—by not driving.

Then the rate of car ownership tumbles: For the 18-to-34 demographic across the region, the share of people who drove to work fell by 7 percentage points between 2000 and 2013, according to the US Census. The District alone gained 12,612 car-free households between 2010 and 2012.

Finally, as a result, lawmakers and regulators have no choice but to catch up—which means even more bike lanes, liberalized transit rules, and denser neighborhoods whose residents make appealing customer bases for bike sharing, and cars by the hour, and novel delivery options for economy-size packs of toilet paper. It’s a cycle that reinforces itself.

more Uber than taxis in NYC

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According to BBC, there are now more Uber cars than traditional taxis in New York City. That happened fast. For now, there are still more trips taken by taxi. The article uncritically quotes traditional taxi advocates (without quoting Uber advocates) who think it is unfair that they are no longer allowed to jack up prices by limiting the supply of transportation available to people. They’re right, it’s no longer unfair in their favor.

Google: self-driving taxis 2-5 years out

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Is widespread commercialization of self-driving cars decades out? No, 2-5 years according to Google!

Google has made no secret of its ambitions to revolutionize transportation with autonomous vehicles. Chief Executive Officer Larry Page is said to be personally fascinated by the challenge of making cities operate more efficiently. The company recently said the driverless car technology in development within its Google X research lab is from two to five years from being ready for widespread use. At the Detroit auto show last month, Chris Urmson, the Google executive in charge of the project, articulated one possible scenario in which autonomous vehicles are patrolling neighborhoods to pick up and drop off passengers. “We’re thinking a lot about how in the long-term, this might become useful in people’s lives, and there are a lot of ways we can imagine this going,” Urmson said in a conference call with reporters on Jan. 14. “One is in the direction of the shared vehicle. The technology would be such that you can call up the vehicle and tell it where to go and then have it take you there…”

Travis Kalanick, Uber’s CEO, has publicly discussed what he sees as the inevitability of autonomous taxis, saying they could offer cheaper rides and a true alternative to vehicle ownership. “The Uber experience is expensive because it’s not just the car but the other dude in the car,” he said at a technology conference in 2014, referring to the expense of paying human drivers. “When there’s no other dude in the car, the cost [of taking an Uber] gets cheaper than owning a vehicle.”

One group of players you never hear mentioned in these articles…the Detroit car companies. Remember, they would have gone extinct in the 2007-8 financial crisis if the government hadn’t bailed them out. Are they completely missing out on the autonomous vehicle and ride-sharing trends now, instead picturing the millennials and their children living in the exurbs with two cars in every garage? If so, they may be headed for short-term extinction. I’m also waiting to hear more about autonomous trucks and buses – they have to be coming.

Robert Reich on the sharing economy

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Robert Reich is not a big fan of the sharing economy.

The euphemism is the “share” economy. A more accurate term would be the “share-the-scraps” economy.

New software technologies are allowing almost any job to be divided up into discrete tasks that can be parceled out to workers when they’re needed, with pay determined by demand for that particular job at that particular moment.

Customers and workers are matched online. Workers are rated on quality and reliability.

The big money goes to the corporations that own the software. The scraps go to the on-demand workers.

His solution is unionization and collective bargaining. I am not against those things – in the short term, how you divide up earnings between owners and workers is a zero-sum question. In the longer term though, you want to grow those earnings at the same time you are dividing them up in some fair way. Unionization might resist the underlying economic and technological forces for a time, but it can’t change them. Remember the “ownership society”? If we aren’t going to give workers real equal bargaining power compared to their corporate employers, a possible alternative is broader ownership of those corporations. We could use inheritance and gift taxes to give every baby an IRA with $10,000 in stock the day they are born, just to throw out a random idea. That would grow, and then later in life, people could choose to either invest that money in education and skills for the jobs that do exist, or they could just choose to work fewer hours than earlier generations did.

taxi medallions and creative destruction

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The Washington Post has a pair of interesting articles on taxi medallions. The first article claims that taxi medallions have been the “best investment in America for years”:

In New York, taxi medallions have topped $1 million. In Boston, $700,000. In Philadelphia, $400,000. In Miami, $300,000. Where medallions exist, they have outperformed even the Standard & Poor’s 500-stock index. In Chicago, their value has doubled since 2009.

A medallion is an asset that an entrepreneur or corporation can buy. They then rent out the right to use the medallion, receiving an income while hoping the asset will appreciate, which in the past it always has. Not surprisingly, since they have been such a good investment, there is a whole financial industry that has grown up around them, which is the focus of the second article. There are companies who specialize in lending to taxi medallion investors.

The 23-page market report warns of “financial ruin” for Medallion Financial Corp., a 70-year-old company that has long lent money to drivers and investors in New York, Chicago and Boston looking to buy expensive taxi medallions. The coveted assets give owners the right to operate taxicabs, and for decades they have been the best investment in America, providing a steady business for a company that goes by the ticker symbol TAXI.

But the market report, released to the media on Thursday at a time when transportation companies Uber and Lyft are threatening established taxi markets across the globe, predicts a much darker future. “Medallion Financial,” it reads, “has left itself and its shareholders exposed to an economic reckoning rarely observed in free-market economies – the collapse of an asset class propped up by decades of government-sponsored, monopolistic entry barriers with the sudden, unconstrained introduction of new supply.”

So it’s very clear why the owners of these assets are fighting for government regulation to outlaw use of the new technologies that might provide better service and better value. They might hold back the tide for awhile, but technology and consumer expectations will continue to evolve, and ultimately history is not likely to be on their side.