Greg Lindsay's Blog

March 10, 2017  |  permalink

The Death and Life of American Cities in the Age of Uber

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In 2015, the New Cities Foundation approached me about a research fellowship studying urban mobility. I told them I was interested, but only if I could unequivocally take a stand against Uber and its implicit campaign to monopolize first taxis and then public transport. Without batting an eye, they said yes.

My final report, published last fall, made the case that Uber and its fellow transportation network companies would fatally undermine public transport by siphoning the most affluent (and therefore politically influential) riders away from subways and buses into the backseats of late-model sedans. Declining ridership would force transit agencies to first cut budgets and then quality, creating a downward spiral of customers fleeing to private services — which in certain cases already cost less than transit in cities such as New York, Boston, and Washington due to massive subsidies. (Uber posted a $3 billion loss last year.) The result would be a collapse in public transport and epic traffic congestion, as a multitude of individually rational decisions produced a collective meltdown.

Needless to say, this wasn’t a popular opinion at the time, when I expanded upon my theory at length in a podcast with London Reconnection’s Nicole Badstuber and Transit Center’s Zak Accuardi.

I doubled down in January with an op-ed in The Guardian arguing Uber’s multi-billion-dollar burn rate indicated it needed to achieve a near-total monopoly before the subsidies ran out. Shortly thereafter, Uber’s annus horriblis began, starting with the #deleteuber campaign and then widening into public allegations of internal sexual harassment, aggressively deceiving regulators, stealing Google’s autonomous vehicle research, and engendering enough ill will to lose more than 200,000 customers (and counting).

Then the other shoe (or the other other shoe) dropped this week with a report published by former New York City Department of Transportation deputy chief Bruce Schaller arguing Uber and Lyft, et al. have tripled in size in New York in the last eighteen months, producing demonstrable gridlock. Meanwhile, bus ridership has plunged by 25% since 2009, and subway ridership fell last year for the first time this century. “It’s hit a point where people are choosing to travel by ride-hailing because the subways have become intolerable,” the Regional plan Association’s president Tom Wright told The New York Times.

Perhaps the most remarkable quote from that story comes from a member of the Manhattan Institute, a self-described “free market think tank” :

Nicole Gelinas, a senior fellow at the Manhattan Institute, said ride-hailing apps were able to lure riders with artificially low prices because they were subsidized by an influx of cash by investors. The apps have made it easier for people to travel by the “most inefficient mode of transportation possible,” she said.

When you’ve lost the libertarians, Uber, it’s game over.

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Greg Lindsay is a journalist, urbanist, futurist, and speaker. He is a senior fellow of the New Cities Foundation — where he leads the Connected Mobility Initiative  — and the director of strategy for LACoMotion, a new mobility festival coming to the Arts District of Los Angeles in November 2017.

He is also a non-resident senior fellow of The Atlantic Council’s Strategic Foresight Initiative, a visiting scholar at New York University’s Rudin Center for Transportation Policy & Management, a contributing writer for Fast Company and co-author of Aerotropolis: The Way We’ll Live Next.

» More about Greg Lindsay

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