Wednesday, September 03, 2014

Study Compares Ridesharing and Taxi Users

I haven’t tried Uber since its launch in Durham this summer.  But soon Durham will show up under the “D’s” rather than under the airport name.

Even if Durham place guardians hadn’t pointed out that there is no such place as Raleigh-Durham, Uber would have eventually figured out that it is simply the name of a co-owned airport located midway between two distinct metros in a poly-centric region.

If they didn’t also hear it from visitors and residents, more than 90% of whom also view the two cities as distinct, Uber is savvy enough to figure out that Durham and Raleigh should be listed separately just as it does Tacoma and Seattle, Boston and Providence, Portland and Vancouver (WA,) and Dayton and Cincinnati.

The clincher though was when the airport, the only place where the name Raleigh-Durham is legitimate, began to issue warnings to Uber drivers.

Years ago, the airport collapsed the lines of cabs specializing in service to each of the two owner-cities and established a system of its own.

Soon visitors and residents learned that a ride from the airport to any of the  cities they served might be the first for both the passengers and drivers because the airport serves hundreds of cities and towns with duplicate hotel names, street names and references.

Uber is essentially a dispatch service using technology that enables customers to select drivers who would best serve them, streamlining payment and tipping as well as shortening wait times.

Taxi regulations have always served an important public purpose but they can also stifle innovation in several ways.

The most controversial is that some local officials seem to view cab owner and driver constituents now as an entitlement rather than a public service.

This can give the appearance that they are more concerned with sheltering drivers from full accountability than spurring greater levels of service to the public such as accepting credit cards or turning cars over more frequently.

The regulatory process is also inherently resistant to innovation because it is monopolized by a few drivers who complain and work the system rather than rewarding those who excel.

The purpose of regulations is to address externalities the free market fails to address, but too often, as with cabs, their administration insulates businesses from market forces such as innovation.

Instead of objecting, officials should be interviewing the many taxi drivers who, during off-hours, also drive their own vehicles for Uber.  They should also meet with Uber and its counterparts at Lyft to discuss ways to license the technology for use by community cabs.

They should also definitely read the independent research published last month by UC-Berkeley researchers at the multi-campus University of California Transportation Center headquartered there.

The study compares the user characteristics of “ridesourcing” services such as Uber with taxis in San Francisco including those who owned cars, frequently use cabs or would have taken mass transit.

Keep in mind as you read it that in North America 94% own a car, 33% a bicycle, 9% a motorcycle, 5% a scooter and 3% an electric bicycle.

Ridesourcing consistently provided much shorter wait times than taxis regardless of the day or time.  Nearly 60% in the study own a car but were avoiding the hassle of parking or making sure they didn’t drink and drive.

All but 8% would have taken the trip by other means if ridesourcing didn’t exist, 39% by cab and 24% by bus, but among those who were car-less this is 35% and 33% respectively.

Regardless of the type of transportation, ease of payment, short wait time, and fastest way to get there were the top reasons cited by respondents when asked for the top two reasons for using ridesourcing.

Of importance to bus service administrators, 76% of taxi trips and 85% of ridesourcing trips began and ended 200 meters or less (655 feet)from a bus stop,  The percentages of car owners and those who would have otherwise taken the bus if they hadn’t used ridesourcing were both near 90%.

Companies such as Uber are obviously tapping into the unfulfilled desires of consumers, something taxies could have done long ago if the owners and regulators had been less concerned about entitlement and more innovative.

Cabs blame regulators and regulators fear Uber, but both should join together to embrace innovation and technology.

Of course ridesourcing represents only a sliver of the 80 million consumers in the U.S who engage in the collaborative economy. According to the report “Sharing Is The New Buying” published this year, about 17% of the 23% overall population identified as “neo-sharers,” were evenly split between ridesourcing and loaner vehicles.

In the near future, ridesourcing services may be driverless using fleets of Google-inspired autonomous vehicles for errands and giving a boost to tourism.

Studies show that a switch of 10% to autonomous vehicles would also save 1,100 lives, reduce crashes by 211,000 and save nearly $17 billion annually in fuel and time.

But one thing is for certain, the ridesourcing technology isn’t going away.

I’m certainly not on the front end of this movement but close friends are.  I can’t help but think of people still asking for loaners or things for free on my neighborhood list serve as what my dad called “moochers.”

But I have used eBay, Etsy and VBRO and will soon try Uber.  I can also see why so many who use Airbnb do so to get the feel of neighborhoods before they buy a house.

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