Uber, Lyft and other ride-hailing services have been with us for several years now. What began as a convenient novelty to replace traditional taxi and limo services soon became a standard commute for many people. Commentators and company executives caught on to the paradigm shift and have begun issuing provocative statements such as, “Hey! You no longer need to own a car.”
That would be a significant financial reprieve for many households across the United States. The median household income is $53,046, according to the most recent U.S. Census; with AAA estimating that the average car and its related expenditures demands about $8,698 per annum, and with the average household owning two or more cars, a household stands to save 16 percent of its annual income if it ditched at least one car.
Even a 5-10 percent savings in ditching the car is significant enough to make urban households — where reliable ride-sharing and ride-hailing services are most viable — think twice about whether they need to own a personal automobile. Those who have decided to ditch the personal automobile have recorded their experiences online, and they recount not only having a net savings, despite using Uber and Lyft often, but also a more convenient and pleasant traveling experience.
Millennials, now the largest demographic group in the United States, seem to be on board with ditching the car. Why? First, cars are expensive and millennials cannot escape the perennial condition of being broke. Second, as catalogued over and over again, millennials have bucked their parents’ tendency to purchase glitzy, glamorous things and instead prefer glitzy, glamorous experiences. A new SUV for the family is a thing that will depreciate about 10-20 percent a year over three years. A ride on Uber or Lyft is a cheap, convenient way to move from experience to experience.
We now see an exciting possibility for cities. Ride-hailing/ride-sharing companies might change the urban fabric, which has been built not for people, but for the machines that move people around: cars. Indeed, 30-60 percent of a typical U.S. city’s landprint is devoted to rights-of-way and parking, with some cities famous for suburban sprawl surpassing that figure.
Have you ever heard someone wax poetic about the “spectacularly beautiful freeways of Atlanta,” or the “meditative traffic jams of Austin”? Of course not. It’s no accident that when people travel, they tend to visit either cities that are pedestrian-friendly and human-scaled or natural environments that are green and pensive. Ride-sharing will help cities achieve both, despite their being heavily urbanized spaces.
If the 20th century was devoted to building the infrastructure to service the personal automobile, then perhaps the 21st century will be devoted to undoing most of it.
How so? Services that combine ride-sharing with ride-hailing technology will reduce huge inefficiencies in the market, which will reduce inefficiencies in the land use of cities. McKinsey & Company researchers have explored the economic potential of the circular economy, by which capital can be redirected toward creating new markets because of savings gleaned through efficiencies. They estimated that the average European car sits still 92 percent of the time. In their book Resource Revolution, Stefan Heck and Matt Rogers claim that the typical American car is in use only 4 percent of the time. That is, a household pays about $8,698/annum to drive a car for 15 days’ worth of time.
Ride-sharing companies can significantly augment the productive use of the automobile. Whereas an individual household might only use their car 4 percent of the time, an automobile shared via ride-hailing software will be used practically throughout the entire day. And with autonomous vehicles and the ICT power of smartphones, which Uber et al. are actively developing, an automobile’s efficient use will be maximized even more.
The evidence that this can happen is already there. A 2010 report from UC Berkeley’s Transportation Sustainability Research Center found that one car-share vehicle removed 9 to 13 vehicles from the road, either because households decided to ditch their personal automobile or significantly delay the purchase of one. Recent research into shared automated vehicles (SAVs) that incorporate dynamic ride-sharing (DRS) software, such as uberPOOL’s ride-hailing/ride-sharing combo, extends the findings of the UC Berkeley report.
Daniel Fagnant, at the University of Texas, recently completed his dissertation, which reports that “each SAV could replace around 10 conventionally-owned household vehicles, with a fleet of 1715 SAVs serving over 56,000 person-trips [in Austin, Texas].” Furthermore, he argues that SAVs would reduce automobile fuel consumption by 16 percent and lower volatile organic compound emissions by 48 percent.
Considering the inefficient use of the personal automobile, its exorbitant cost, the sheer volume of urban land devoted to serving that inefficient use and the material efficiencies achieved through ride-sharing and ride-hailing services, we just might have a chance to radically redesign our cities. If the 20th century was devoted to building the infrastructure to service the personal automobile, then perhaps the 21st century will be devoted to undoing most of it.
Ride-sharing leveraged by ride-hailing apps just might be our saving grace.
With the efficiency achieved through ride-sharing, which will become a seamless part of our lives thanks to user-friendly apps and ICT systems that efficiently distribute cars to meet commuter demand, we can move the same number of people through cities by using fewer resources. As both the University of Berkeley and Dr. Fagnant’s research suggests, one ride-share car could potentially replace about 10 personal automobiles. And that is a lot of saved space.
Imagine what we could do with that saved space. Imagine that every single road wider than 4 lanes was given a road diet by city planners and transportation engineers. Rights-of-way could be returned or resold to businesses that face the roadways; promenades for pedestrians could be widened and lined with trees; housing could be added to the right real estate market of major cities. Indeed, a six-lane highway could be trimmed to a 2-lane roadway with a turn lane, bicycle lanes and sidewalks — and still leave enough room for the development of row houses along the edge.
Because SAVs can act as a form of “personalized public transit” that reduces the need for individually owned automobiles by a factor of 10, cities would certainly have reason to reclaim inefficient roadways. They simply will not be needed. With the rising unaffordability of the nation’s fastest-growing cities and the scarcity of real estate in urban cores to meet consumer demand, ride-sharing leveraged by ride-hailing apps just might be our saving grace.
If there was ever an opportunity to seize to redesign cities to be greener with more public parks, promenades and tree-lined walkways, and to reclaim wasteful space for housing construction, this is it.