Conor Sen considers a question in his post at Bloomberg View that I hadn’t considered. What happens if ridesharing companies like Uber or Lyft outcompete public transportation?
If these companies can profitably poach the ridership of high-demand transit routes, they will. Which then raises important questions: If ridesharing firms can operate more effectively and efficiently than public transit agencies, should the government get out of the transit business and let private companies provide better service at a lower price? Or should government subsidize or outsource, rather than operating its own transit services? Or should government adopt the companies’ best ideas — perhaps new or different routes with different types of vehicles — and then ban the private sector from offering competing services?
If governments do none of the above, then lost ridership and revenue would further strain the budgets of public transit agencies. This would aggravate the social equity concerns inherent in an emerging two-tiered transit system.
I think you need to add to this that neither Uber nor Lyft is operating at a profit. If they can’t figure out how to do that without losing market share, it is highly possible that one or both of them will just close its doors. What happens if a city, pressed by other demands for scarce tax dollars and unable to compete with ridesharing companies, just gets out of the public transportation business and then the ridesharing company folds? Restarting shuttered public transportation is likely to be more expensive and politically harder than just keeping it going.
I dunno. I see ridesharing as a niche service. In big cities they might kill the cab companies, but I doubt they’ll affect the core services for daily commuters, like buses and subways. What else is there? There is precious little public transit in the suburbs and practically none in rural areas. Which public transit agencies, exactly, are lyft and uber poised to compete with?
Just don’t see that big of an intersection between the set of people who use Uber and the set who use buses and trains. I was actually wondering last time I was in Philly if Uber might increase train utilization in particular. Depending upon where you work, you can still have a significant walk after getting off the train. Expensive to take a cab every day. Cheaper with Uber, so it might make the train more viable rather than driving.
Uber in rural areas has surprised me. One of our young docs broke her foot. She used Uber to travel to our hospital up in coal country, about an hour drive. But if Uber fails, there really is no public transport up there.
Steve