The Uberization of Transit

A few weeks ago, Uber’s Travis Kalanick predicted that it would soon replace its drivers with self-driving cars. Now, he’s putting his investors’ money where his mouth is by poaching 40 self-driving auto engineers from Carnegie-Mellon University.

“Uber offered some scientists bonuses of hundreds of thousands of dollars and a doubling of salaries to staff the company’s new tech center in Pittsburgh, according to one researcher at NREC.” Although Google has gotten most of the headlines lately, it was Carnegie-Mellon’s entry that won the $2 million DARPA urban challenge in 2007. Unfortunately, its biggest sponsor, General Motors, went bankrupt soon after that, and it probably hoped that a partnership with Uber would help. Instead, the partnership just allowed Uber to decide which of its engineers it would steal.

Meanwhile, Denver graduate student August Ruhnka has suggested that public bus systems be “uberized.” It was a unfortunate choice of terms as he didn’t mean allowing people to call buses to their homes using a smart-phone app. Instead, he proposed to let private companies operate Denver buses (he didn’t seem to be aware that they already operate half of them) and, more significantly, to let those private companies change routes in order to better serve riders. “Private-route contracts establish a sustainable procedure to constantly test the market to achieve the lowest cost,” he wrote.

Even that mild proposal is enough to send transit advocates into a tizzy.
“rivatize planning?” shudders transit consultant Jarrett Walker. “Let private companies re-arrange transit services without regard to the impact on the city and its values? That’s the opposite of democracy.”

Impact on the city and its values? What’s he talking about? Transit is about moving people where they want to go. His idea of planning is telling people where they should want to go and then sending transit there. His idea of democracy is the rich and powerful get to decide where everyone else should want to go.
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Somebody should teach Walker that the market is far more democratic than any transit agency. Almost everyone gets a vote, regardless of age, sex, race, or religion; people can vote every day if they like, not just when their leaders let them; and the strength of their vote is proportional to their interest in the issue. No one has to pay for anything they don’t vote for, and people don’t have to get majority approval before they can have something they want or need. The rules are different, but it is still democratic.

Transit based on market democracy would probably use jitneys with semi-flexible routes. Such jitneys, sometimes called dollar vans are found in New York City, much to the distress of the public transit agency that would like to suppress them. How democratic to suppress a transportation service that people find valuable!

In contrast, transit based on government democracy comes up with ideas that are totally wacky. For example, the head of the Georgetown Business Improvement District–a quasi-government organization that gets its money through taxes but is supposedly run by and for private interests–recently saw Portland’s aerial tram and thought, “What a great idea for connecting Georgetown with the Metro system.” So he is asking the DC city government to study building a tram from Georgetown across the Potomac River to Rosslyn, Virginia.

Let’s see the aerial tram has the kind of qualities transit advocates look for in a successful project. Was there a 267 percent cost overrun? Yep. Are fare collections just 12.5 percent of published fares? Yep, mainly because 85 percent of the riders rode for free. Did the state medical school that promised to build a biotech center at one end of the tram after the tram was built actually did build that biotech center? Yep, 3,000 miles away in Florida. It’s clear that the tram has all of the qualities that transit advocates look for in a successful project.

The Georgetown Business Improvement District doesn’t really care about any of these issues. Someone else will have to pay for cost overruns. High fares will keep the riffraff out of Georgetown (which, according to legend, isn’t on a Metro line for that very reason), while Georgetown residents will get cheap annual passes. And anyone who thinks a 9.6-mph tram is going to attract new development doesn’t have much sense of reality anyway.

Whether they are run by Uber or enterprising taxi companies, self-driving cars are going to replace transit just about everywhere outside of New York City. It’s probably too late to fret about how Denver determines its bus routes, but a more market-oriented transit system would have more hope of surviving self-driving car sharing than one that is managed by Jarrett Walker’s idea of a democratic process.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

18 Responses to The Uberization of Transit

  1. msetty says:

    Antiplanner, you misunderstand Jarrett Walker even more than you do Jane Jacobs. And you don’t address Walker’s key point about where “frequent transit” should be provided: in the densest areas with concentrations of employment and destinations, e.g., the areas where concentrations of trips will support frequent transit.

    “Market democracy?” Huh? So you believe in “one dollar, one vote?” I know you’re not ethically challenged, but such an absurd belief will facilitate those who are and have no scruples. Try again.

  2. msetty says:

    Also, the difference between The Antiplanner and Jarrett Walker appears to be that The Antiplanner argues ideology and goofy concepts about “democracy” while Walker argues from facts. I don’t see any attempt to debunk Walker’s rather detailed factual arguments at http://www.humantransit.org/2015/05/no-lets-not-uber-our-bus-system.html about why “uberization” is a red herring. All we hear is that the Uber et al concept is “supposed to work” so it meets the requirements of libertarian ideology, despite its multiple impracticalities in the real world.

    BTW, I suppose if jitney workers made $5.00 per hour in this country, the concept “might” work, though such workers would live in 3rd World type poverty. But count on lack of training (why stick around ifyou can make $8.00/hour at MickeyD’s?), rickety, old and unsafe vehicles, wild rides and lack of insurance in too many situations.

  3. ahwr says:

    Impact on the city and its values? What’s he talking about? Transit is about moving people where they want to go.

    http://www.humantransit.org/2012/11/eric-morris-on-the-freakonomics-blog-has-fallen-into-the-familiar-trap-to-put-my-remarks-in-context-ive-been-a-trans.html

    One analysis that I’ve done for several transit agencies is to sort the services according to whether they serve a “ridership” related purpose or a “coverage” related purpose. Ridership services are justified by how many people ride them. Coverage services are justified by how badly people need them, or because certain suburbs feel they deserve them, but not based on how many people ride.

    For an idea of what would happen if you let private companies decide where buses run, why not look at where taxis operate.

    http://www.vox.com/xpress/2014/8/29/6082543/taxi-animation-nyc

    Yellow cabs are permitted to pick people on the street anywhere in the city. They only work in a small part of it, so the city created green ‘boro’ taxis that can pick up anywhere except lower Manhattan and the airports.

    http://www.dnainfo.com/new-york/20150202/washington-heights/map-see-how-often-green-cabs-stop-your-neighborhood

    They skip a lot of the city too.

    Cabbies don’t like to waste time deadheading. They’re legally obligated to take you anywhere in the city, but many won’t.

    http://www.nydailynews.com/new-york/san-juan-mayor-trouble-cab-drive-bronx-article-1.2238842?cid=bitly

    The mayor of San Juan got treated like a native by some Big Apple cab drivers when she said the words they hate to hear: Take me to the Bronx.

    What about the areas not served by taxis? What about the areas with buses today that wouldn’t have them if you let private companies move routes to where they would perform better financially?

    Another issue is the handicapped. Wheelchair boarding slows buses considerably and requires more expensive buses to accommodate them. Of all the dollar vans I’ve seen running ahead of buses picking up riders I’ve yet to see one pick up someone in a wheelchair.

    Do the values of a city permit handicapped to be left behind if it improves a private company’s bottom line? Or for pricing to be rejiggered to match costs, even if it means the rich in the center of the city end up with cheaper per mile transit costs (and fewer miles to travel) than the poor further out, who may have their routes cut completely because the riders won’t be able to afford to support it?

    Maybe. Maybe not. But trying to make those decisions without public debate through the ‘magic’ of privatization could reasonably be called undemocratic.

  4. Fred_Z says:

    I read the Walker post and it was meaningless bafflegab meant to press the issue of planning control as good, and the organized chaos of the market as bad. Tinkling in the background were the bells of fear that the wireless internet will disintermediate him, and all transit planners.

    He wrote: “My job is to help elected officials (or their appointees) make clear decisions about the real tradeoffs that transit planning requires. ” Exactly. A job that will become (even more) useless when the state is entirely cut out of the arrangements between riders and carriers.

    I laughed my head off when he wrote about how the privatization allowed so far did not work. It was not privatization. Setting routes and granting monopolies on them the to private carriers is the exact antithesis of privatization, so of course that lunatic scheme would not work.

    The only regulation of transit or taxis that has ever made sense to me is regulation of where they may stop to pick up passengers without disrupting traffic or risking injury to passengers or others. What more is needed? Why?

    If the goal is to ensure that poor people can travel the method of micro-regulation based on “planning” is expensive and stupid. Just give them the money and let them walk, catch a bus, take a taxi, buy a bicycle or an old beater car or moped.

    I always think of “Planners” as being exactly like Dilbert’s pointy haired boss ever since the strip where he was planning to plan the planny-plan.

  5. Frank says:

    Jarrett Walker, another density advocate and planning consultant who lives in a 2360-square-foot, single-family home on a quarter of an acre with a 512-square-foot detached garage.

    Give me a break.

  6. transitboy says:

    Why don’t we look at a place that actually has done that? In the United Kingdom, local bus service was deregulated in the 1980s everywhere EXCEPT London and private bus companies were free to decide their own routes and schedules. Is it any surprising as a result that popular corridors and times were over served while local government ended up having to pay bus companies to operate important but less lucrative evening and Sunday service as well as routes outside of major corridors? London used the US privatization method where local agencies planned routes and schedules and then offered them to private operators. Bus ridership declined dramatically in all British cities EXCEPT London. I don’t have time to provide a cite, but this information is widely available.

    The Antiplanner is a big fan of Megabus, and it is indeed successful. However, it only has to provide service between popular destinations. Lifeline service also needs to be provided to other areas so that the transit dependent can have basic access to society. Cream skimming is not unique to transit – see also arguments that private charter schools steal away the best and brightest from public schools, which are required to serve everybody.

  7. JOHN1000 says:

    “BTW, I suppose if jitney workers made $5.00 per hour in this country, the concept “might” work, though such workers would live in 3rd World type poverty.”

    Maybe they should be unionized. Good? Not so fast.
    In California (newly mandated $15 hour minimum wage), the unions are now pushing for an exception to the law. If the employer has a union workforce he is exempt from the $15 minimum wage. The union provides protection from government labor troubles -just like mob . If the union gets its cut–they don’t care how low you pay the workers.

    This one was so bad you couldn’t make it up.

  8. MJ says:

    I laughed my head off when he wrote about how the privatization allowed so far did not work. It was not privatization. Setting routes and granting monopolies on them the to private carriers is the exact antithesis of privatization, so of course that lunatic scheme would not work.

    This is known as competitive tendering. I suppose you could call it ‘partial privatization’, but I don’t like using that term because for me the most important aspect of privatization is the freeing of private operators to set schedules and fare regimes more appropriate to the markets they serve. The British experience, outside of London, exemplifies this as it combines privatization with deregulation.

    Is it any surprising as a result that popular corridors and times were over served while local government ended up having to pay bus companies to operate important but less lucrative evening and Sunday service as well as routes outside of major corridors?

    No, it isn’t surprising. That is exactly how it was expected to work, and it is not evidence of failure. The ‘thicker’ markets get better served, as they should, while less is invested in lower-demand locations and times. I think most of the cities that undertook these experiments knew that some residual subsidy would be required (these are often referred to as ‘concessionary fares’), but saw drastically reduced subsidies as an acceptable compromise for the improvements that would result.

    This is sometimes derogatorily referred to as ‘cream-skimming’, but I wonder what the actual problem is. At worst, subsidy levels decline (perhaps sharply) with few service disruptions as the limited subsidies ensure a minimum standard of service. At best, many lines are operated profitably, freeing resources that would otherwise be used to cross-subsidize less popular routes.

  9. MJ says:

    “Market democracy?” Huh? So you believe in “one dollar, one vote?” I know you’re not ethically challenged, but such an absurd belief will facilitate those who are and have no scruples. Try again.

    Yes, one dollar, one vote. That is how markets work. Nothing unethical about it. The belief that consumers know better than central planners which options best meet their needs should not be controversial.

    To me, Walker’s allusions to “democracy” are far more problematic. Even in central cities, public transit is an afterthought for the majority of the population. Their ‘values’ mostly lie elsewhere, in things like public safety and schools that are usable for most children. Even if they use the service, they have little time or energy to waste on planning exercises to redesign the network. The handful who have Walker’s level of interest in the subject tend not to be broadly representative of the population, either of transit users or in general. That strikes me as anti-democratic.

  10. MJ says:

    Do the values of a city permit handicapped to be left behind if it improves a private company’s bottom line? Or for pricing to be rejiggered to match costs, even if it means the rich in the center of the city end up with cheaper per mile transit costs (and fewer miles to travel) than the poor further out, who may have their routes cut completely because the riders won’t be able to afford to support it?

    Maybe. Maybe not. But trying to make those decisions without public debate through the ‘magic’ of privatization could reasonably be called undemocratic.

    What about the handicapped? Depends on what you mean by handicapped. There are many reasons that people are restricted in how they can travel. Many who currently use fixed-route buses and trains could conceivably use other modes (e.g. taxis or ‘uberized’ buses, which in this case sound something like flex-route transit services), such as the blind or visually impaired and many non-wheelchair-bound elderly. Ideally, all of these options would be available and compete with each other for customers. Those who don’t live along heavily used fixed-route services could use taxis, the uberized bus service, or even (gasp) their own car.

    There is nothing ‘magic’ about privatization. Its opponents just call it that to avoid seriously debating the issues about service provision that might emerge where non-fixed-route transit options are allowed to compete directly with incumbent fixed-route providers for customers. Privatization is a process of discovery, of trail and error, to find and better serve existing markets. There may some failures along the way, but there will be also be opportunities to learn from those failures and, more importantly, incentives not to repeat them. To me, it is far more undemocratic, and really quite cynical to keep those customers tethered to the offerings of existing fixed-route providers for no other reason than to protect their monopoly which arises due to the existence of a “dependent” population.

  11. Ohai says:

    Did the state medical school that promised to build a biotech center at one end of the tram after the tram was built actually did build that biotech center? Yep, 3,000 miles away in Florida.

    After Florida extended $118 million in subsidies and incentives. Now that biotech center is in financial trouble and Florida taxpayers are on the hook for $4 million a year. But hey, as long as they ended up far away from anything resembling transit it’s OK, right?

  12. Jardinero1 says:

    Buses are truly on the cusp of being Uberized. Bridj is now operating in two cities and likely will be nationwide in five years. It fills the infinite number of gaps that city transit monopolies don’t cover. It does not run on fixed routes and is not a taxi so it does not face the legal hurdles that Uber and Jitney operators face. http://www.bridj.com/

  13. J_Austin says:

    Uber mostly improves upon taxi service, which is, fundamentally, demand response service, which is going to have a tough time exceeding about 3 passengers per vehicle hour. Even a so-so city bus route will achieve 15 passengers per vehicle hour, and good routes will get 40 or more. So I would not get too worried about Uber replacing city buses. It’s a lot more plausible that it will continue to replace what we have already seen it replace–taxis.

    Theoretically, I could see Uber replacing city buses in the low density suburbs and rural areas, where there is insufficient demand for fixed-route/fixed-schedule service with full-size buses, i.e., in the areas where many transit agencies already run demand response service. Most transit managers would probably welcome this change. Those are the most expensive areas to serve! In reality, it appears that suburban and rural markets are Uber’s lowest priority.

    Assuming Uber doesn’t get into the low density markets, transit agencies themselves might find that they could improve their own demand response service by taking a page or two out of Uber’s playbook; however, most DR service is already run close to capacity, so I don’t know if there’s much incentive. Reservation booking and vehicle scheduling has been computer assisted by Trapeze and other products for some time now. Uber’s app would provide a slick way for customers to book their rides, but again, is there much incentive for transit agencies to stoke demand? Unlike fixed-route, every new DR rider costs the agency more money. If it wasn’t an unfunded mandate under ADA, most agencies would be operating far less of it.

    Perhaps the more likely adopters of Uber technology are the mostly private and non-profit contractors who typically operate ADA paratransit on behalf of the transit agency. Maximizing use of the unfunded mandate that is the ADA is their entire business.

  14. Roundabout says:

    Communists, Socialists, Central Planners, Academics, and those that are dependent on the ever growing government will never learn, because they are insulated from the consequences of their ideological allegiance. They are just like the inflexible bus routes that are dictated from on high by an overpaid pencil pushing bureaucrat who has no idea that he is gobbling up resources and blocking any common sense innovations that are trying to match needs with supply. Invariably they also arrogantly condemn the facts and reality as they retreat into the ivory tower and self righteously pour hot oil on all those ignorant masses below who are not as concerned and compassionate as they are. Robespierre’s “Committees for public safety” guillotined 300,000! Eventually they are left alone in their own little private hell where no one listens or cares as innovation and progress finds real ways to join supply and demand.

  15. MJ says:

    Most transit managers would probably welcome this change. Those are the most expensive areas to serve! In reality, it appears that suburban and rural markets are Uber’s lowest priority.

    Under existing technology, it is. Uber is currently seeking out niche markets among users who are likely to be willing to pay a higher price for their service, and in return getting a better quality service than they can from some taxi operators.

    I wouldn’t assume that this is how they expect to operate in the long run, though. Fully autonomous vehicles have the potential to dramatically lower costs and improve availability, since unused vehicles could be dynamically routed to waiting customers. The fact that they are throwing big money at a number of key researchers in this field suggests that they perceive the potential savings and new market opportunities as substantial. The potential for expanding into more suburban markets is probably a big part of that.

  16. CapitalistRoader says:

    “Let private companies re-arrange transit services without regard to the impact on the city and its values? That’s the opposite of democracy.”

    Jarret Walker is James William Bottomtooth in drag.

  17. transitboy says:

    If I remember correctly some private operators in the UK attempted to coordinate schedules and fares but were prohibited from doing so because it was “anti-competitive”. Since effective transit needs to be seamless and coordinated, it is possible that successful full privatization would require a relaxation of antitrust laws in the United States.

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