A new study from Boston has been heralded as “proof” that ride-hailing systems such as Uber and Lyft are making congestion worse. Indeed, the survey of 944 people using these services found that “over 15 percent of ride-hailing trips are adding cars to the region’s roadways during the morning or afternoon rush hours.” However, the study doesn’t estimate exactly how many cars are added, and it might be fairly small compared to the total that are already there.
In fact, the study’s other conclusions are far more interesting, some of them unintentionally. About 42 percent of the 944 people surveyed said that, if ride-hailing were not available, they would have taken transit. Since a previous survey in California found that only a third of ride-hailers would have taken transit, this latest survey suggests that ride hailing is having an even bigger impact on transit that previously thought.
The study also found that only 12 percent out of that 42 percent of people who otherwise would have taken transit were traveling during rush hours. Thus, more than two-thirds of ride-hailing takes place during non-rush hours and isn’t contributing to congestion.
The study also questioned the notion that ride-hailing companies would be a transit “partner” providing service for the “last mile.” Only “about 9% of home-based ride-hailing trips were used to reach a transit connection,” the survey found.
Particularly devastating for transit is the finding that about 35 percent of ride-hailing users who answered the survey have a transit pass, so the cost of riding transit instead of Uber or Lyft for them is effectively zero. But transit is clearly not providing the service they need.
The study further estimated that “the average ride-hailing trip represents 35 cents of lost fare revenue for the MBTA,” Boston’s transit agency. The state charges the ride-hailing companies 20 cents a ride, and the authors of the study seemed to take it for granted that, since “a reliable and effective transit system” is “essential,” ride hailing should be penalized even more for taking money from transit.
This is a peculiar attitude. Someone recently announced that Apple is now selling more watches than all of the watchmakers in Switzerland. Should Apple pay a fee to compensate the Swiss watchmakers for their lost revenue? Of course not. So why do people take it for granted that the transit industry deserves compensation when someone develops a superior service?
Unlike most public transit systems, ride-hailing drivers pay the same gas taxes, tolls, and vehicle registration fees as private drivers, and there is no need to increase those fees any more than they should be increased for other users. Rather than Uber and Lyft compensating transit, it is more reasonable to think that ride-hailing drivers deserve compensation for the revenues they lose due to heavy subsidies to the transit industry.
The conventional wisdom is that ride-hailing companies are taking the cream of transit’s customers, leaving transit with just low-income riders. Even if true, it shouldn’t matter, but this survey found that the incomes of ride-hailing users “are similar to the region overall, and a substantial number of trips are made by people from households earning less than $38,000 per year,” mostly people in the workforce, not students. This suggests that transit is so inferior that many low-income people are willing to pay considerably more than the cost of transit to get better service.
Of course, it isn’t hard to find MBTA to be inferior. As the Boston Herald revealed yesterday, Boston’s transit system is “plagued by near-constant service issues.” These include an average of almost one train derailment a month, five train delays per day, and below-average bus frequencies in low-income neighborhoods relative to higher-income neighborhoods. The paper noted that the state Public Utilities Department recently warned that the city’s light-rail system is “stretched to the limit” and in danger of more serious problems unless MBTA spends more money on maintenance. Of course, it doesn’t have that money because it is spending $2.3 billion building a 3.7-mile light-rail extension.
This kind of insfrastructure neglect wouldn’t happen among ride-hailing services. If an Uber or Lyft driver used a worn-out car that was prone to breakdowns and delays, they would get negative reviews from users and be dumped by the ride-hailing companies. People can’t do the same for transit systems as they are mostly monopolies, so they quit riding transit and start hailing rides.
At the same time, it is almost guaranteed that the cities whose transit systems are hurt the most by ride-hailing are also the cities whose transit systems are declining due to lack of maintenance. That’s because the cities with older rail systems are also the cities with the population densities that make ride hailing work best. Ride hailing also works in low-density cities, but these don’t have big, expensive transit systems that are falling apart (yet).
In the end, ride hailing shouldn’t be seen as parasite imposing congestion on cities and stealing from transit systems. Instead, it is a great advance in mobility that benefits its users as well as the providers at little or no cost to taxpayers. If transit is hurt by it, then — like Radio Shack, Blockbuster, and other obsolete commercial companies — the transit industry should quietly roll up its rails and go away.