The future of ride sharing

One would hope that this might lead to a ride-sharing operation run by the drivers, with lower prices for customers and a better share of profits for the drivers.

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Image Credit: RideGuru

Although Uber and Lyft are the biggest names in ride-sharing, there are other and different ways in which this form of economy works.  In its IPO, Uber named the following as competitors:

  • Ride-sharing companies: “Lyft, OLA, Careem, Didi, Taxify, and our Yandex.Taxi joint venture.” It also mentioned that it competes with just about every other mode of transit out there, including personal vehicles, “taxicab companies and taxi-hailing services, livery services, and public transportation,” the latter of which it admits “typically provides the lowest-cost transportation option in many cities.”
  • Bike and scooter companies: “Motivate (an affiliate of Lyft), Lime, Bird, and Skip.”
  • Autonomous-vehicle researchers: All carmakers working on research, as well as “[Alphabet’s] Waymo, Cruise Automation, Tesla, Apple, Zoox, Aptiv, May Mobility, Pronto.ai, Aurora, and Nuro, whose offerings may prove more effective than our autonomous vehicle technologies.”
  • Delivery companies: ”GrubHub, DoorDash, Deliveroo, Swiggy, Postmates, Zomato, Delivery Hero, Just Eat, Takeaway.com, and Amazon.” It added that it sees Uber Eats as competing with “restaurants, meal kit delivery services, grocery delivery services, and traditional grocers.”
  • Freight companies: As it moves into trucking, it’s taking on competition like “C.H. Robinson, Total Quality Logistics, XPO Logistics, Convoy, Echo Global Logistics, Coyote, Transfix, DHL, and NEXT Trucking.”

Uber did not mention car rental companies, even modern ones like Zip Cars, which allows rental by the hour and allows cars to be moved from one.  Nor does it mention Getaround, Turo, Hyrecar, or other companies that help individuals rent their cars.  These latter companies are barely getting off the ground – yet they suggest a model that might well outstrip Lyft and Uber.

Both Lyft and Uber have lost $1 billion in operations since their stock went public.

Let me start with an idea that my father loved to discuss.  He hated the American system of private automobile for a number of reasons. The private automobile, he said, was the cause of traffic jams and the need to spend enormous amounts of money on roads. What he might also have said is that the private car has increased global warming because of the unnecessary amount of greenhouse gases.

Think about it. Private cars are generally driven with only one person in it.  Private cars are also used relatively infrequently. If cars were shared, more people would be riding in each vehicle, and fewer vehicles would be needed by the society. Ride-sharing and car-rental decreases the issues which private cars cause, including wear and tear on roads, traffic jams, greenhouse gases, and so on

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My father’s idea was to have the government own all the cars. Individuals would be free to rent the cars by registering, being issued a universal key, picking up a car on the street, driving it where needed, and then parking it when the individual no longer needed it. This simple plan does leave some gaps, like how to prevent people from stealing cars, and how to keep the cars well maintained. My father thought that if cars were easy to rent, there would be no market for stolen cars.  The government would keep the cars maintained.

My father’s plan would actually work better today than it might have worked in the 1940s. For example, the government could keep track of the cars with tracking devices and computers. This would prevent theft and making car maintenance simpler. Keeping track of who is renting a car can also be done with electronic devices

The big problem today is that governments would be reluctant to get into the car rental business. True, they could buy up the existing stock of vehicles and launch a car rental business. In fact, they could test the system in a few cities. But many people would call such involvement “socialism,” even if having fewer cars on the road would be a good thing

But the same result could be achieved if the tax system were modified to make operations like Getaround, Turo, and Hyrecar more popular. I would also suggest that the governments should allow individuals to hitch rides so that more cars are driven full. Get around and the other companies could offer insurance so that their car could be driven with paying customers. The government could make “diamond” lanes on highways accessible only if there were at least three people in the car rather than two, and they could increase the number of diamond lanes. Such provisions would encourage more shared riding. So, too, would making parking easier for cars that were rented out to people. In other words: make owning and operating a private car more difficult

One of the present problems with Lyft and Uber is that the drivers are paid too little and the companies draw too much money from the operation. Allowing individuals to rent cars and drive customers for pay would provide competition and drive the price of ride-sharing down. One would hope that this might lead to a ride-sharing operation run by the drivers, with lower prices for customers and a better share of profits for the drivers. All of these steps could make ride-sharing more common and thus limit the problems that private cars cause.

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