Uber and Lyft: The Good, Bad and Future News About Their Services

BAD NEWS

First Does Uber and Lyft reduce traffic?  The answer is a firm No.

In dense parts of cities, studies claim a 62% increase in congested cities like San Francisco vs 22% without them. The study claimed the ride sharing apps “are clogging roads and siphoning people from mass transit.” Surprisingly, in the more local neighbors they barely made and stastistical difference.  In Denver it was claimed Uber and Lyft added 83% more driver miles than models not having them available.

It appears that about 70% of the drivers come in from outlying cities and towns, even though they spend 20-30% of their day in the most congested areas, often where mass transit is available.

This has caused BART to significantly lose riders during nights, weekends and other high-risk times.  Bus ridership is down as much as 10.7 in certain areas. Riders know more traffic means slower buses, but the slower buses are driving migration to ride sharing apps, which in turn causes more congestion.  Some Bay Area bus routes have seen delay times increase up to 43% over the last few years. Ryde services reduced or replaced 43% to 63% of all mass transit, bike or walk trips.

Uber and Lyft received about 20-21% of the fairs and are highly unprofitable.  The companies are trying to achieve profitability by gaining greater economies of scale, recruiting more drivers to cover their installed infrastructure.  The problem with this model is that it creates a direct conflict with the drivers, as they see more drivers competing for their share of the most lucrative locations.

GOOD NEWS

If a person is likely to drink, or mass transit does not support their destination, they are far more likely to choose Uber or Lyft.

Where Uber and Lyft helped is by reducing parking in especially congested areas like airports, concert venues, sporting events, universities, downtown areas and restaurants, even though the study says free parking was available 72% of the time.  In denser city neighborhoods, where car owners do not have prearranged parking spaces, Uber and Lyft become a very attractive alternative. Having rideshare services probably means planners don’t need to include as many parking spaces.

FUTURE

The future of Uber and Lyft is clouded until they become profitable, as they are losing money on every trip.  Once they spend all of their capital funding, they will have to raise rates or change their models. Venture capital will not subsidize the low fair rides forever. So, enjoy the artificially low rates on Uber and Lyft while you can, before they run both run out of money.

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Jay Black

I try to write fact based articles that most people won't. Lets improve this world including both Corporate and Government malfeasance. If you have a lead about a ethical failure please comment on my article or in many of my comments.

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