Last night, Uber CEO Dara Khosrowshahi gave some of his most expansive comments to date since taking the reins seven months ago concerning his vision for the company. Among them, he said he wanted Uber to expand its imprint on public transportation, which should raise some red flags for reasons I will soon outline.
Khosrowshahi said that Uber could eventually become a marketplace for other transportation providers, just like Amazon is a marketplace for third-party merchants today, and highlighted the variety of Uber’s existing businesses, which range from food delivery to trucking.
“I want to run the bus systems for a city.”
“I want to run the bus systems for a city,” Khosrowshahi said at an event sponsored by Goldman Sachs, according to the Financial Times. “I want you to be able to take an Uber and get into the subway... get out and have an Uber waiting for you.”
In some respects, this is old news. Uber has been tweaking its UberPool carpooling service over the last year to make it look more and more like a bus system — or at least a microtransit service. UberPool users in New York City can use pre-tax dollars normally reserved for transit trips to pay for rides. And UberHop, a service that debuted in Seattle a few years ago, was designed around fixed pickup and drop-off points, just like a bus.
In other cities, Uber receives government subsidies to supplement public transportation. In Summit, New Jersey, Uber gets money directly from the town to offer extremely cheap rides to commuters traveling to and from the local train station. Other towns, like Altamonte Springs, Florida, have gone a step further, totally replacing public transportation with subsidized Uber rides.
Uber has also recently begun wading into bike-sharing, announcing a recent partnership in San Francisco with Jump, a dockless bike-share program. Khosrowshahi seems to be suggesting that public transport could be the next frontier.
But this could create a system in which Uber poaches riders from high-volume transit routes, said Yonah Freemark, a transit expert who writes for The Transport Politic.
“That would set a dangerous precedent.”
“If Uber were to begin operating bus routes, the biggest concern would be cannibalizing the most successful public transit routes, to leave the rest of the system poorly served,” Freemark said via email. “In other words, in a place like San Francisco, Uber might want to concentrate on markets where there is very high transit use, such as on Mission Street, and ignore other routes throughout the city that have lower use. Doing so would, in essence, privatize the profitable elements of transit service (those routes with high ridership), while forcing the public sector to pick up the slack elsewhere. That would set a dangerous precedent since transit is only effective as a network. It relies on multiple intersecting routes, some with high ridership, some with fewer users. A separated system with Uber competing on high-ridership routes and the public operating low-ridership ones would be devastating and against the public interest.”
Several years ago, when Uber was still gaining a foothold, public transportation groups decided it was in their best interest to embrace the disruption and categorize Uber as a friend. Their justification: the research backed them up. People who use Uber own fewer cars and were more likely to also use public transportation and spend less on transportation overall, a 2016 survey by the American Public Transportation Association found.
new studies cast doubt on those assumptions
But recently, new studies cast doubt on those assumptions. A new national report by the UC Davis Institute of Transportation Studies found that ride-hailing apps have only caused a slight decrease in vehicle ownership — the stated mission of Uber’s executives. (“We don’t want you to buy cars,” Khosrowshahi said. “We want you to use shared mobility.”) Meanwhile, as people use these apps more, they are using public transportation less, researchers found. Many trips that could be made by foot, bicycle, or via public transit are now made by ride-hailing services.
Public transportation should stay exactly that — public. “Having Uber decide what bus services it wants to provide will, as with much of the rest of the economy, simply reproduce inequality by focusing on the markets with wealth,” Freemark argues. “Cities in the UK (with the exception of London) were forced to deregulate their bus networks in the 1980s—allowing competing services little different from what Uber provided. The results were predictable: Higher fares, lower ridership, and competition on heavily used routes but little service for other areas. That’s the private market skimming profit from the top, leaving the public by the wayside.”