Last September Transport for London declared that Uber was not ‘fit and proper’ to hold a licence. But there is clear evidence that the public like ride-sharing apps, and that they can benefit both local communities and the environment. Is a ban the right approach? Or do we need to talk?
If there is one thing we have learned over the past five years, it is that thinking the unthinkable is a sensible course of action. Of course, we are always going to shop on the high street. Of course, there will always be bank branches in the town centres. Marks and Spencer closing branches? Don’t be ridiculous.
Suddenly, so many things that seemed absolute cornerstones of our life are – to use the modern phrase – being ‘disrupted.’
Well, at least you can always get a taxi home after a night out – or a black cab if you are in London.
And then along comes Uber. Founded just nine years ago in San Francisco, it now has 12,000 employees and is active in 633 cities around the world. Tellingly, one of those cities might not be London, with Transport for London deciding last September that Uber was ‘not fit and proper’ to hold a licence, despite it being used by 3.5m Londoners and having 40,000 drivers in the capital.
Uber has now announced that it will offer health cover and maternity pay to its drivers, as it awaits a crucial decision on whether it will be allowed to operate in London or whether September’s decision will be upheld. Whether health cover and maternity pay will be enough to sway TfL – who to this writer at least, seem to have made the decision on political and competition grounds as much as on any other – remains to be seen.
Brighton and York have also both banned Uber, but ride-hailing apps are here to stay (at least until something comes along to ‘disrupt’ them) with China’s Didi Chuxing having already expanded into Mexico and now planning what appears to be little short of world domination.
So what impact are ride-sharing apps having?
With Uber having been around since 2009 and its American rival Lyft since 2012, what impact are the ride-sharing apps having? A recent study in Austin, Texas offered some interesting insights and some very clear pointers to the future. The study found that ride-sharing apps impact both car ownership and public transport – and the results may not be what you would expect.
A positive impact…
A study by Lyft and a similar study by a group of American universities pointed to the positive impact ride-sharing apps have on consumers and on the local communities they service, with Lyft customers estimated to spend an extra $2bn (£1.5bn) in communities where ride-sharing apps are in operation.
At this point we might need to sound a note of caution: a study by a ride-sharing app finds that ride-sharing apps are a good thing. It sounds suspiciously like those studies sponsored by sugar companies that used to find that eating sweets was good for your health. But hopefully the more academic study lends some objectivity – and there is certainly plenty of food for thought for those cities in the UK currently lining up to ban Uber.
Do ride-sharing apps impact car ownership?
‘Yes’ is the short answer. Lyft’s study found that in 2017 almost 250,000 of their regular ride-sharing customers either sold their personal car or delayed the purchase of a new car. In addition, 50% of Lyft customers report using their own car less than they previously did, with 25% saying that they no longer see personal vehicle ownership as important.
But so much for Lyft – what about a more academic study?
The example of Austin
In 2016 the city of Austin, Texas, banned Uber and Lyft in a dispute over the fingerprinting of drivers. The ban lasted for a year, giving three American universities the chance to come together and study the impact of the ban. What it found was that the removal of ride-sharing had a dramatic impact on drivers’ alternative means of transport. 41% of commuters used their own car to fill the void: 9% went out and bought a car. Significantly, only 3% of commuters used public transport.
These findings have been supported by a further study done by the American Public Transport Association. Their study found that families who “never use” ride-sharing apps own, on average, 1.5 cars per family. Those families that regularly use ride-sharing apps own 1.05 cars per family. Could it be that ‘Generation Rent’ will also be ‘generation rent-a-car?’ Although again, you need to tread carefully: do people use ride-sharing apps because they don’t own a car? Or do they use a ride-sharing app and get rid of the car?
What seems undeniable is that people prefer ride-sharing apps to public transport. A similar study conducted by the University of California found that ride-sharing apps resulted in reduced use of both bus and light rail services – mirroring the findings in Austin.
What are the implications for the UK?
While London, Brighton and York may currently be at odds with Uber, they cannot remain opposed to all ride-sharing apps indefinitely. Ride-sharing apps are popular with consumers and that will eventually prevail. Could that mean a sharp reduction in public transport? It is hard to imagine that in a city like London but then it was hard to imagine the slow death of the high street.
Equally, there are serious implications for car manufacturers. A reduction from 1.5 cars per household to 1.05 is a significant one, and must ultimately translate into lost jobs in manufacturing and the supply chain.
The flip side, of course, is that any reduction in single-occupant car journeys must cut down on pollution and traffic congestion. It must be good for both the environment and public health. So it seems sensible that local authorities – both in the UK and in other cities – work with the ride-sharing apps rather than against them. Banning Uber in London will lead to a lot of frustrated Londoners and a lot of unemployed drivers – and a gap that public transport does not fill. Local leaders need to talk, not bury their heads in the sand…