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On the future of Uber and other ridesharing/ridehailing companies

A few years ago, Uber was the darling of transportation. It and others like it were considered disruptors. They were but then eventually unraveled as their business model and practices were challenged and exposed. Here’s an article that does not mince words in describing what and how Uber is:

Doctorow, C. (August 11, 2021) “End of the line for Uber,” Medium, https://marker.medium.com/end-of-the-line-for-uber-901e3077bbbc [Last accessed: 8/21/2021]

There’s a wealth of references (links provided) in the article provided to support the arguments of the author. It is not anecdotal but an accumulation of facts from various experiences as well as a documentation of the company’s efforts to hide its flaws.

I co-authored several papers analyzing what was seen as a phenomenon. It was clear that people preferred Uber or Grab over regular taxis because of the higher quality of service they got. Similar results were obtained elsewhere and spelled the doom of many taxi drivers. Those that survived were the better serving ones like taxis in Japan and Singapore. However, the more recent of those papers have shown that what are called TNVS or transport network vehicle service have basically been deceiving and took advantage of their drivers (whom they do not want to refer to as employees). Did they help reduce congestion? They did not, and even added more cars to traffic.

Article on the new mobilities

Here’s a quick share of an article on what is described as the new mobilities:

Litman, T. [June 30, 2021] “Planning for New Mobilities: Preparing for Innovative Transportation Technologies and Services,” Planetizen.com, https://bit.ly/2U99Hlw [Last accessed: 7/3/2021]

What exactly are these new mobilities? To quote from the article:

“New Mobilities

  1. Active Travel and Micromobilities. Walking, bicycling, and variations, including small, lower-speed motorized vehicles such as electric scooters, bikes, and cargo bikes.
  2. Vehicle Sharing. Convenient and affordable bicycle, scooter, and automobile rental services.
  3. Ridehailing and Microtransit. Mobility services that transport individuals and small groups.
  4. Electric Vehicles. Battery-powered scooters, bikes, cars, trucks, and buses.
  5. Autonomous Vehicles. Vehicles that can operate without a human driver.
  6. Public Transport Innovations. Innovations that improve transit travel convenience, comfort, safety, and speed.
  7. Mobility as a Service (MaaS). Navigation and transport payment apps that integrate multiple modes.
  8. Telework. Telecommunications that substitutes for physical travel.
  9. Tunnel Roads and Pneumatic Tube Transport. New high-speed transport networks.
  10. Aviation Innovation. Air taxis, drones, and supersonic jets.
  11. Mobility Prioritization. Pricing systems and incentives that favor higher-value trips and more efficient modes.
  12. Logistics Management. Integrated freight delivery services.”
Cyclist along Circumferential Road 6 carrying a washing machine

Afterthoughts on ridesharing

Ridesharing/ride-hailing companies like to claim that they are helping solve transport problems. However, their disruptions seem too good to be true in a growing number of cases including those in London and California where studies have shown anomalous practices of companies particularly Uber. Grab is now the dominant company in the Philippines after Uber sold its business to Grab. Other upstarts have had little impact on Grab’s market share. The only ones perhaps that have had some success taking business from Grab are the motorcycle taxi app companies like Angkas and Joyride. Motorcycle taxis are actually quite popular though they have been informal (and illegal). Habal-habal operations though have been tolerated in many cities and towns with authorities usually turning a blind eye to their operations.

They have thrived in large cities and have practically displaced taxi companies in these cities. I would not go deep into the social impacts but there are already a lot of negatives including the growing evidence that they are taking people away from public transport in general. Their operations seem promising at the start as the original concept was to use underutilized vehicles that otherwise would have been parked for most of the day, and offering work and income opportunities to people who had the free time (e.g., home-based people who may have a few hours to spare to drive/transport other people to their destinations). The latter were assumed to be part-timers with their vehicles available for providing transport services on demand. The vehicle used might be a spare one. And I use the word ‘spare’ here as it is assumed there might be another ‘main’ vehicle that is used by another person in the family who is a full-time job who drives to work. I don’t buy that romanticized claim that one main objective of these rideshare companies is to break the monopoly of taxi companies. They ended up being the taxis with all those cars now roaming city streets for passengers (and fares).

I mention here a very recent article citing an MIT study:

Green Car Congress (February 2021) “MIT study finds Uber & Lyft increase congestion, decrease transit ridership and don’t affect vehicle ownership,” Green Car Congress, https://www.greencarcongress.com/2021/02/20210204-tncs.html [Last accessed: 2/5/2021]

There is also a published paper in 2019 that is from the perspective of TNVS drivers in Metro Manila:

Mirandilla, C.S. and Regidor, J.R.F. (2019) “Assessment of Transportation Network Vehicle Services from the Drivers’ Perspective,” Journal of the Eastern Asia Society for Transportation Studies, Volume 13, Pages 2369-2389, https://doi.org/10.11175/easts.13.2369

In the paper, their findings include the following:

“It was found that TNVS have greater impact in traffic flow compared to other modes of transportation while delivering inferior productivity. The study also found that full-time driver-operators have very high risks of financial losses, and they have lower than minimum wage income when depreciation costs and maintenance costs are considered.”

On pollution due to ride shares

We close February with another article I share about ride sharing and its environmental impacts:

Hawking, A.J. (2020) Uber and Lyft generate 70 percent more pollution than trips they displace: study, The Verge, https://www.theverge.com/2020/2/25/21152512/uber-lyft-climate-change-emissions-pollution-ucs-study [Last accessed 2/29/2020]

I guess, this sort of validates our suspicion of ridesharing becoming unsustainable. Again, we note its origins when it had the potential to reduce car ownership and car use. The original ride shares were closer to carpooling as well as took advantage of under-utilized vehicles while giving extra income to people who could share their vehicles on-demand. Eventually, the ride shares morphed into taxis with people purchasing cars to get into the business. Soon, a lot of them were roaming the streets as they awaited bookings and this type of operations generated a lot of emissions. They might not have required more parking spaces like the conventional car users but this benefit was eventually overcome by the pollution they produced.

Unraveling ridesharing/ridesourcing

I have been writing about ridesharing/ridesourcing/ridehailing for some time now. I have also researched on its characteristics particularly in my country where it was initially hailed (no pun intended) as a solution to transport woes in highly urbanized areas. We’ve done our research with or without the cooperation of these companies. It does not surprise me that their operations have unraveled and many are exposed to be abusive. So much for being the ‘disruptive’ initiative that was praised by many before…

Emerson, S. (2019) “Uber Drivers Protest ‘Corporate Greed’ as Billionaires Cash In”, https://onezero.medium.com/uber-drivers-protest-corporate-greed-as-billionaires-cash-in-df65a7e470a7 [Last accessed: 11/18/2019]

 

Grab tours?

One of my former students who did research on ridesharing showed me a new feature on the Grab app. There is a vehicle for rent option now in the app as shown in the screen capture below:

 

Booking by the hour means you get to set the duration of service. The conventional service is point-to-point (i.e., taxi).

Choosing “booking by the hour” will lead to a selection of vehicles and the number of hours corresponding to a type of rental.

We showed these to our suking van rental in Cebu and our driver commented that these were expensive. Still, we thought this was a good way to go around the province (not just Cebu City). Of course, such rentals may be more applicable for those who like set pieces when they travel or go on tour. If you’re the more adventurous type, then perhaps you will consider public transportation and walking. It will certainly be less expensive and give a more memorable experience however it goes.

More concerns about ride-hailing/ride-sharing

Here are two interesting (to me at least) articles about the negative aspects of ride hailing or ride sharing. The first is quite a curious one for me as I teach at UP Diliman, which has a sprawling campus in Quezon City. Students can have one class at a building on one end of the campus and have the next class at another end of the campus. I now wonder if there’s a significant number of Grab or Angkas trips within campus.

Kidambi, M. (2019) “Popularity of brief Uber, Lyft rides on campus raises environmental concerns,” Daily Bruin, http://dailybruin.com/2019/01/29/popularity-of-brief-uber-lyft-rides-on-campus-raises-environmental-concerns/ [Last accessed: 2/8/2019]

The second article relates on the a more general context of what’s bad about ride hailing/ride sharing. The author presents not just a list but evidence of each item mentioned.

Schmitt, A. (2019) “All the Bad Things About Uber and Lyft In One Simple List,” Streetsblog USA, https://usa.streetsblog.org/2019/02/04/all-the-bad-things-about-uber-and-lyft-in-one-simple-list/ [Last accessed: 2/8/2019]

As I’ve mentioned in previous articles here, there are still a lot we need to learn about ridehailing in this country and especially in our cities. I guess Angkas’ case can be different because motorcycle taxis were already operating in many areas even before the app-based service. But of course, we also need to understand about his enhanced ‘habal-habal’.

Increasing the number of TNVS units? Not so fast!

The Land Transportation Franchising and Regulatory Board (LTFRB) is planning to increase the number of TNVS units (i.e., rideshare vehicles) in Metro Manila to meet what is perceived as the demand for them based on the numbers provided by TNCs like Grab. The problem with this number they want to eventually achieve, 65,000 units supposedly, is that this is based on current transport conditions in the metropolis. Also, this is based on data that is biased for the interests of TNCs, which obviously want to increase their driver and vehicle base in order to maximise profits. Here is a nice article that should provide some context from abroad where rideshare vehicles are actually generating more car traffic and taking people away from public transport.

Fried, B. (2018) “Uber and Lyft Are Overwhelming Urban Streets, and Cities Need to Act Fast,” Streetsblog, https://nyc.streetsblog.org/2018/07/25/uber-and-lyft-are-overwhelming-urban-streets-and-cities-need-to-act-fast/ [Last accessed: 7/26/2018]

Currently under construction are the Line 7 and Line 2 Extension projects and soon there will also be the Line 1 Extension. Also, in the pipeline are the proposed subway and rehabilitation of PNR that is supposed to revitalise its commuter line. These are examples of projects that will likely be game changers in terms of commuting with the objective of drawing people away from car use. In the bigger scheme of things, perhaps there is a need to rethink numbers for TNVS and instead focus on improving taxi services in Metro Manila. The same can be said for other cities as well where there is already a need for better public transport services to avert a transport future similar to what Metro Manila is already experiencing now.

On the continuing evolution of Uber and Lyft, and some thoughts on TNCs in the Philippines

Here’s a nice read about ridesharing/ridehailing/ridesourcing in the US:

Madrigal, A.C. (2018) “Will Uber and Lyft Become Different Things?”, medium.com, https://medium.com/the-atlantic/will-uber-and-lyft-become-different-things-2d0442472a15 [Last accessed: 6/13/2018].

It seems that companies like Uber and Lyft are evolving and that should benefit commuters. Meanwhile, the latest news on TNCs in the Philippines is on the issuance of a Department Order by the Department of Transportation (DOTr). The new Department Order (DO) effectively amends and supersedes an earlier DO issued in 2015 (DO No. 2015-011), wherein TNCs were allowed to set their own fares, subject only to oversight by the Land Transportation Franchising and Regulatory Board (LTFRB). This means more regulations for TNCs that might actually harm the new players more than the remaining big player – Grab.

Uber recently sold its Philippine operations to Grab in exchange for shares of Grab. One colleague quipped “If you can’t beat ’em, join ’em!” And that seems to be the case here where Uber’s vulnerability was exposed when faced with a strong competitor together with a government bent on having a firm regulatory control of TNC operations. While I am for regulations in order to protect both the interests of commuters as well as the drivers-operators of TNCs, I believe too much regulations will weaken this mode while taxi services remain wanting (to use a kinder term). The DOTr and the LTFRB is again not addressing the root cause of a problem on taxi-type services and allowing generally poor services among taxi companies in Metro Manila to continue.

On the Grab – Uber merger

A couple of weeks ago, I received a message from Uber confirming what was in the news for some time then, and what was rumoured a longer while back. Uber Philippines was closing shop after merging with main competitor Grab, while the mother company also acquiring a stake in Grab. Later, I also received a message from Grab (I use either depending on availability and cost.) welcoming Uber users to Grab.

The result so far has been frustrating if not disappointing to many who have relied on Uber for commuting and the typical trips that you usually associate with taking a taxi.

Recent news revealed that Grab is using an even more punitive pricing scheme compared to Uber’s surge pricing. While the LTFRB moved to scrap this, Grab has been apprehensive, stating that this was an incentive for their drivers. There is actually another side to the concept of surge pricing that LTFRB does not or seems to refuse to understand. That is, that dynamic and more expensive fares related to congestion (or road conditions) is something that’s actually related to the concept of congestion pricing. This actually penalises the use of vehicles like private cars or taxis in favour of higher capacity transport like buses or, if available, trains.

Even more recent is the news that Grab is suspending about 500 of its drivers for excessive cancellation and/or rejection of trips. Unlike Uber before, Grab drivers have the “luxury” of knowing where a potential passenger is heading. That gives the driver the option to accept or reject a proposed fare. Uber drivers didn’t know where the potential passenger was heading and to my knowledge, was stricter with penalising their drivers. The only caveat I know is that passengers can also be penalised if the driver requests for a cancellation and the passenger obliges out of good faith (e.g., An Uber driver in Cebu requested me to cancel the request as he claimed he was caught in traffic and would be penalised if he canceled. I ended up protesting Uber penalising me 100 pesos for my cancellation. Uber did not act on it in my favour.).

The issues surrounding the Grab/Uber merger though should not be there in the first place if we had good taxi services. When I say good I am referring to the quality of service provided by taxis in Singapore and Japan. Of course, they also have good public transportation there so there’s also a case for what most people will likely be taking instead of cars and taxis (which operate similarly as cars). One wonders how and why LTFRB seems to be so strict vs TNCs while being lax with taxis. Meanwhile, DOTr is scrambling on the desperate catch-up work it has to do about mass transit lines and public transport rationalisation. Good luck to us commuters!