Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

More about Uber and the “sharing economy”

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Back in the middle of the month I reported on a City Conversation which looked at the issue of the taxi shortage in this region, and the reaction to Uber. If you didn’t read it then, can you look at it now – and especially the comment by MB, which talks his experience as a taxi driver.

I get all sorts of “pitches” in my inbox every day. Usually invitations to meetings in places far away (now if they included airfare and hotel I might even be tempted) or books to review. The invite to read the paywalled Nation has become a regular. On the whole my campaign to find links to free rather than paywalled sites has been lagging. I am pretty sure that most people find ways to get to content that I am not going to discuss. In this case I wanted to read today’s article about Uber and the Taxi Industry, just to see if it adds anything to what appears on this blog already. So I got the proffered free access behind the paywall for reviewers. The article in question is “adapted from a paper produced as part of the Future of Work Project, an inquiry supported by the Open Society Foundations.” So I rather thought that there might be an open source version of it somewhere. If there is, my Google technique needs to be improved.

Writing from a place where Uber is already established and basing the article on interviews with the people impacted – mostly taxi drivers – gives a good insight into possible outcomes here. John Liss used to drive a cab himself and his experience mirrors that of MB. In fact most of the article addresses the issue from one that was hardly touched on at the City Conversation.

The rapid growth of Uber has profound implications for both taxi drivers and the industry. Are Uber drivers earning full-time living wages? Are they protected from arbitrary or discriminatory dismissal? Can they support their families? What does this mean for the future of work?

Well, that’s all very well, but should there not also be some coverage of the needs of the users?  Well there is this

But Uber has no requirement to serve the public. Indeed, there is a strong race, class and age bias as to who can utilize the service. You have to own a smartphone, which has an average cost of more than $500. Uber requires customers to pay with a credit card, cutting off those with no or poor credit. Until recently, the company had no wheelchair-accessible vehicles in Virginia, and continues to lack adequate services for the disabled in many places.

which I think does reflect some of the remarks I heard. There is also the issue of “surge pricing” which means drivers on Uber get to profit from times when there are peaks of demand – which was also discussed if not in the context of Hurricane Sandy.

The general conclusion seems to be that drivers for Uber have ended up earning pretty much the same as cabbies – and with all the attendant risks (pay up front, hope you get enough rides, no benefits) and once again the company that developed an app makes the big money.

As National Taxi Worker Alliance organizer Biju Mathew said, “It’s drivers and millionaires against the billionaires.”

So not different enough, I think to allow Uber in here even if they can be persuaded to play by the rules – that is to say the rules of society rather than their own. Which, according to Liss are stacked against the drivers.

But there is also the broader issue of the public interest. We need better alternatives to driving ourselves everywhere, and the current suite of options is not adequate. But simply relying on private sector initiatives and the market economy is unlikely to address these issues in a way that will satisfy anyone. In the same Nation there is a further examination of the “sharing economy” based on an examination of Uber and AirBnB.

“Now, despite over five years of official recovery, the sharing economy offers some people, like cab drivers, the prospect of real wage cuts, and others, like people with a spare bedroom, a way to supplement stagnant incomes. The sharing economy is a nice way for rapacious capitalists to monetize the desperation of people in the post-crisis economy while sounding generous, and to evoke a fantasy of community in an atomized population.”

So not much to cheer about there then. Actually I did notice something that seemed to offer a glimmer of hope.

“Uber’s a different story in New York, where all drivers have to be certified by the Taxi and Limousine Commission, and the cars are all regular cabs or car-service vehicles. Every Uber-hailed driver I’ve spoken with in New York likes the service, because it delivers more paying riders than they’d otherwise have.”

So it seems that Uber can work in a regulatory environment. It is also possible I think that the fleet of vehicles and the number of drivers could also be supplemented at need under such a system. In New York you see “car-service” vehicles all the time. They tend to be black, and are often upmarket sedans and SUVs as well as limousines. If you are staying in Brooklyn and you have an early morning flight out of Newark, they are probably the only practical way of completing the trip – short of sleeping overnight at the terminal. I do not know about Uber cars, but from these articles it seems that there are some attempts at both quality control and market segmentation.

Liss does give some insight too into how different cities and states have developed regulated taxi systems. What they seem to have in common is that having evolved as cars proliferated they then became stuck at the point in history when the regulation was imposed and have changed remarkably little since. It does seem that change is both necessary and desirable, but not that all attempts at control should be abolished overnight.

One of the more curious meetings I had when at Translink was with a lawyer. He had noticed numbers of people left behind at bus stops as he drove through Vancouver towards downtown, and he wondered if there was some way that people could be picked up to utilize the empty seats that were going the same way anyway. I had to disabuse him of the notion that the public transit provider – or the taxi industry – would welcome such an innovation. But this kind of ride sharing does happen. On the Golden Gate Bridge in San Francisco it has become established and officially recognized that people will wait at a point where single occupant cars can pull up and load enough people to get into the HOV lanes and share the cost of the toll. I somehow doubt that anyone has thought of this at the Port Mann.  Hitch Planet hooks up people making trips within BC but does not seem, so far, to have tackled shorter trips with Metro. Jack Bell has expanded from simply organising commuter car pools  with an app of its own which can also handle one time trips.

Liss seems to be mainly concerned about the people who work in the taxi industry, and I must admit that cab drivers in BC are – as in so many other places – at the bottom of the food chain. I had hoped he would also look at why Uber has become so popular with users. Yes it has sharply reduced the number of cab rides, but I think it must also have greatly increased the size of the market, and probably diverted some people from transit in the process. It also seems to me that in the longer term a company with Uber’s track record is bound to target the transit market and cream off traffic on the most productive routes. This is exactly what happened in Britain (outside London) when buses were deregulated. There is now a distinct gap between denser urban areas where buses are frequent and reliable, and rural areas where buses are almost entirely absent. Greater Vancouver could be very much at risk if the disrupters start to take an interest in transit. And that is not so unlikely in a future where the public authority has to compete with one arm tied behind its back.

So, no real conclusions other than I recommend reading the Nation articles if this topic held you long enough to still be reading.  The current regulatory framework for taxis in Vancouver is far too biased towards the established license holders, and has resulted in a shortage of taxis – compared to other Canadian cities. It has also lead to people developing all sorts of ways of accommodating these rides. The trip diary survey shows that around 10% of car trips are to take someone to where they need to be – often with an empty return trip. The airport has even set up a “cell phone parking lot” to cope with one of the more obvious needs. Yes, the Canada Line helped, but lots of people need to get somewhere other than downtown. New technology does offer us ways to use the vehicles that currently stand idle for most of the time. And there is a real need for opportunities to make extra money for a lot of people. Yes it would be better if there was a higher minimum wage and a really good social safety net for those in need of supplementation to their incomes. Neither of those seem remotely likely in present day Vancouver, BC, Canada, so let us have a sensible conversation about how we can increase mobility in the region.

Here’s a place to start: Helsinki

“Passengers request a shuttle service on their phones and Kutsuplus computes the best way to get everybody where they need to go, based on real-time data. It also indicates how long it would take to complete the trip both with Kutsuplus and with other modes of transport.”

“[Uber] is an approach that works fine in America, where walking is rarely an option and public transport mostly nonexistent.”

Read more here

Bits keep adding themselves to this story. I saw this link in the February 3 edition of The Direct Transfer (something you might want to consider subscribing to). It comes from Bloomberg and the story is extraordinary. Google is developing its own ride hailing service, in direct competition with Uber a company it has been funding itself.

Written by Stephen Rees

January 29, 2015 at 5:42 pm

One Response

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  1. Interesting that with all the taxi companies saying users of Uber are putting themselves in an unsafe situation, there is no talk that with no cash changing hands in the Uber car Uber drivers are much safer than taxi drivers – there will be no robberies since Uber drivers have no cash. Also, it is impossible for Uber riders to run off without paying, so there will be no fare skipping.

    Also, because Uber, unlike the taxi industry, allows drivers to work only a couple of hours each day it is possible to have additional Uber drivers out for specific peak times of the “taxi” day, such as 2 AM on Saturday night. Uber is not a perfect solution but it seems clear that it would not have become as popular as it is without the shortcomings of a taxi industry that has not changed with the times.

    Chris, Public Transport

    February 10, 2015 at 2:05 pm


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