Innovation Can’t Fix Urban Transportation’s Woes

(Bloomberg Opinion) -- Urban transportation is undergoing a revolution. Offerings such as Uber and Lyft as well as car- and bike-sharing services are widely believed to reduce congestion and generally make urban dwellers more mobile; driverless cars are expected to provide further benefits. Yet the notion that these innovations always make things better is far from a given: The new services are a net good only if they complement traditional public transportation systems rather than compete with them.

In May, Nashville residents voted against funding a transit system built around light rail. The proposal's opponents argued that the ride-hailing services provided a preferable solution for many, and that it was worth waiting for self-driving taxis rather than funding obsolete modes of transport that are losing customers in many U.S. cities.

The declining number of people using public transportation isn't just a U.S. trend. For the first time in 20 years, the London Underground experienced a drop in ridership last year. “Demand for mass public transport has weakened in so many rich-world cities at the same time that one-off explanations seen inadequate,” the Economist asserted recently.

The prevalence of ride-hailing services is often held up as a reason for the decline. In a poll of passengers of a “transportation network company” (read, Uber and Lyft) in Boston in late 2017, 40 percent of respondents said they would have taken mass transit if such services hadn't been available. About a third of riders surveyed in San Francisco in 2016 gave a similar answer. 

Academic work on whether Uber and Lyft complement or compete with mass transit is scarce. In June, the University of Toronto's Jonathan Hall and his collaborators concluded that the net effect of increases in Uber penetration in the U.S. results in a gain in public transportation ridership. The averages hid a lot of variation: “Uber has the biggest complementary effects on the public transit systems that had the lowest ridership before Uber's entry,” the researchers wrote. “However, Uber seems to be decreasing ridership on larger systems, and the effect on these systems could counteract the increase on smaller systems.”

That makes sense: Uber has the ability to deliver more people to mass transit stations from suburbs and inconvenient locations, so less-developed mass transit systems get a boost. To more developed ones, Uber is a competitor.

Regardless of these differences, Hall and his collaborators found, Uber tends to increase traffic congestion. That could change if most people agreed to give up private cars and use ride-sharing options, but there's no evidence of that happening in the U.S., where 76 percent of commuters drive to work alone, a level that hasn't budged in the last decade. 

Self-driving cars could make congestion even worse. On June 27, the World Economic Forum published a report it produced with the Boston Consulting Group predicting that once these vehicles become widely available for shared rides, travel time in the Greater Boston area would improve by about 4 percent. But congestion in downtown Boston would worsen because the vehicles “will be chosen as substitutes for short public transportation trips,” increasing travel times in the area by 5.5 percent.

When London's public transport authority recently decided to reinstate Uber's operating license, it acted in response to apparent improvements in the service's compliance with city rules. The regulator's focus on Uber's driver background checks, audits and violence prevention is not misplaced. But it would have made more sense to look at the bigger picture, and particularly the drop in Underground ridership, which is costing the city transportation agency hundreds of millions of pounds a year in lost revenue.

Ride-hailing and ride-sharing, both in their current form and in their probable self-driving one, can improve mobility in some cities, or parts of big cities. But these services are equally capable of making existing problems worse. Regulators ought to think about promoting solutions that complement existing, mass-transit systems such as subways, not those that poach their passengers.

Expanding bicycle rental networks could be a solution. The number of rental bikes in Berlin increased from about 2,000 two years ago to about 10,000 at the beginning of 2018, even as public-transportation ridership kept growing. In 2017, it increased 1.8 percent, while the city's population grew 1.1 percent. Bikes don't really compete with the subway and buses, but they do help people reach the station faster, and, when used for short trips, don't increase congestion in a city with plenty of bike paths.

But even such a harmless-looking innovation can become a problem. Since the beginning of the year, the number of rental bikes has increased by 8,000, to more than 18,000. The bikes are beginning to clutter up sidewalks, and the city authorities are starting to worry.

Perhaps Uber and similar services shouldn't be allowed to operate in crowded city centers or provide short rides; perhaps self-driving vehicles don't make sense everywhere and perhaps the number of bicycles and cars available for sharing should be capped. Sometimes it might make more sense to invest more money in the subway system or cut fees than to let a ride-hailing service take away business.

Letting the market decide is not really an option for modern cities, where it's easy to worsen the quality of life and much harder to make it better again. Innovation for its own sake isn't worth pursuing.

To contact the editor responsible for this story: Max Berley at mberley@bloomberg.net

©2018 Bloomberg L.P.