Logan Green and John Zimmer, the co-founders of Lyft, have an idea for ending traffic, but you may not like it. They published an op-ed today on Medium called “The End of Traffic,” in which they propose encouraging more people to carpool by charging a fee to those who don’t.
According to Green and Zimmer, the federal government should provide grants to cities to reclassify specific streets and highways as “smart lanes,” in which people with three or more occupants in their vehicle could drive for free, while everyone else would have to pay a toll. Those tolls could in turn be used to pay for the major infrastructure improvements that the nation sorely needs.
HOV lanes + congestion pricing
In other words, the Lyft co-founders propose combining two well-worn traffic reduction theories — HOV lanes and congestion pricing — into one in order to combat the growing scourge of gridlock. Most HOV lanes in the US allow drivers with just one passenger. And congestion pricing has proven to be a tricky to pull off for most municipalities.
In New York City back in 2007, for example, then-Mayor Michael Bloomberg proposed a plan that would charge drivers ($8 for cars, $21 for trucks) to enter the busiest part of Manhattan, only to have state lawmakers kill the plan at the last second.
In an interview, Green said that by making smart lanes free to those drivers with two or more passengers, he hopes to make the plan more politically feasible. Lyft has had discussions with policymakers about its ideas, but Green wouldn’t disclose with whom. “We have to draw line in the sand and declare our goal to end traffic,” he said.
“We have to draw line in the sand and declare our goal to end traffic”
Of course, Lyft has a vested interest in seeing policies put in place to promote carpooling. Both Uber and Lyft have their own carpooling products — UberPool and Lyft Line — that they’ve been aggressively marketing to riders over the last year. Lyft also has a more casual carpooling product that its testing in the Bay Area, in which non-professional drivers can get paid to pick up strangers on their way to work. (Green said that pilot was shut down after Lyft failed to find enough casual drivers to join.)
Lyft Line is operational in 15 big cities and accounts for about a third of Lyft’s business, Green said. Most riders use the carpooling feature as a first- and last-mile solution for commuting along with transit. “We view it as a lightweight dynamic transit route,” Green said of Lyft Line.
Today’s op-ed is the second manifesto from Lyft’s co-founders ruminating on the future of transportation. Last September, Zimmer released a 14-page document in which he predicts that by 2021, "a majority" of rides on its network will be in autonomous vehicles. Also by 2025, Zimmer says personal car ownership in US cities will be a thing of the past.
Surely, these are lofty goals, but they need to be viewed in context of the still-emerging ride-hailing industry’s inability to squeeze out a profit. Both Uber and Lyft are losing hundreds of millions of dollars a year in their effort to undercut each other and the traditional taxi industry. Lyft generated $700 million in revenue last year and lost about $600 million to subsidies and driver bonuses, according to leaked financial documents. Uber appears on track to lose around $3 billion in 2016, mostly thanks to its costly price war in China which it eventually conceded.
Lyft is “on track” to profitability, Green said. In the meantime, ride-sharing services remain only a tiny fraction of the market, close to 0.2 percent of the global total miles traveled. But Green says he can see that eventually becoming “closer to 100 percent,” but only if we have the adequate infrastructure.
“A lot of the world recognizes this now,” Green said. “We’re moving to a society that owns less vehicles. It’s better, more convenient, more affordable. There’s no holding that back.”