As commuting patterns slowly return to normal, ridehailing appears to have continued its pattern of swiping riders from transit in many parts of the country. However, in the Seattle region, ridehailing has been slow to recover and is rebounding even slower than transit, based on a recent glimpse into the data in the Seattle Times.

“In the first quarter of 2022, drivers for Uber and Lyft provided around 3.3 million rides in King County, according to data provided by the Seattle Department of Finance and Administrative Services through a public records request. That’s just 36% of the companies’ combined 2019 peak of 9.3 million rides,” David Kroman wrote. The companies claim to be at about 70% of normal ridership in most other metropolitan regions.

That quarterly figure converts to about 36,000 ridehailing fares per day. By comparison, King County Metro reports its bus ridership has continued to rebound from its pandemic doldrums and hit a new pandemic-era high of 217,000 boardings on June 1st. In 2019, Metro hovered around 400,000 average weekday boardings. In April, Metro ridership clocked in at 49% of its 2019 level.

Uber and Lyft struggle to retain drivers or turn a profit

For their lagging numbers in the region, Uber and Lyft have sought to blame Seattle’s 2020 law applying a minimum wage equivalent of about $16 to ridehailing drivers, whom the industry has fought hard to keep classified as independent contractors rather than employees. But blaming the minimum wage law doesn’t pass the sniff test. After all, the companies are reporting a shortage of drivers, which suggests their wages, if anything, are still too low. In fact, the ridehailing workforce has been trending down since 2018, and the higher compensation mandated by the City of Seattle likely helped them retain more drivers than they would have otherwise.

“Many drivers in King County and elsewhere in Washington appear to have stopped working for Uber and Lyft altogether, a nationwide issue for the companies that threatens to fray their coverage,” Kroman wrote. “In 2021, King County issued 12,285 ride-hailing permits to drivers, according to the King County Records and Licensing Services Division. In 2019, that number was roughly 80,000; in 2018, it was nearly 90,000.”

The difficulty in retaining drivers is also linked to fewer fares to go around, making work more sporadic for drivers. Lucrative fares being fewer and farther between means drivers have to work longer periods to make the same amount of money as previously when fares stacked up one after the other, with less extra driving or waiting searching for fares. With unemployment extremely low in King County, many drivers have left the sector for other occupations given the host of job opportunities.

Uber and Lyft have jacked up prices significantly, but most of that is not being passed along to drivers. Instead, the companies are keeping more for themselves in an increasingly desperate attempt to finally turn a profit after a decade of loss-leading growth with little abandon. Those higher prices should also be among the first culprits we look to explain lower demand, rather than blaming drivers for not working for peanuts. It’s also possible people have simply fallen out of the habit of using these services during the pandemic.

Slate‘s Henry Grabar noted Uber’s average prices have nearly doubled over the last four years according to some estimates and still profits have been elusive. The lack of profits and increasing pressure from investors led Uber CEO Dara Khosrowshahi to issue an ultimatum to employees warning their “bull run” was over and a new approach was needed, alluding to belt-tightening austerity on the horizon.

“Average Uber prices rose 92 percent between 2018 and 2021, according to data from Rakuten; a separate analysis reports an increase of 45 percent between 2019 and 2022,” Grabar wrote. “Both Uber and Lyft have added a surcharge for riders that helps drivers account for high gas prices. And all that was before last week’s ultimatum.”

As we’ve pointed out before at The Urbanist, the ridehailing business model appears flawed on a fundamental level for a number of reasons. Operating a car is really costly — even offloading a great deal of the costs on the privately contracted driver and society writ large. A spike in gas prices eats into a driver’s profit margin, as does rising vehicle costs. Uber has always assumed increasing scale would lead to profits, but it just hasn’t happened even as the company has grown enormous, driven most traditional taxi companies out of business, joined the Fortune 500, and achieved a $42.8 billion market capitalization.

Uber and Lyft have struggled even with U.S. authorities taking a largely hands off approach to regulating them, let alone taxing them on par with the traditional taxi services that proceeded them. Some jurisdictions have even promoted ridehailing companies in place of their own transit services. Venture capital and other investors continued flushing billions of dollars into ridehailing companies over the past decade despite the lack of profits and diminishing light at the end of tunnel.

Earlier hopes that autonomous robot cars would suddenly turn the business into a profitable one have been dashed as the much-ballyhooed technology has been slow to materialize. In 2020, Uber sold off its self-driving research venture, which they had sunk $1 billion into, and Uber’s head of self-driving was sentenced to 18 months in prison after pleading guilty in 2019 to stealing trade secrets from competitor Waymo. Even with those secrets and considerable investment, Uber didn’t appear particularly close to rolling out self-driving cars at scale. Operating in dense urban environments could be one of the technology’s biggest hurdles to overcome since self-driving cars continue to struggle to detect pedestrians. Dense urban environments is where Uber and Lyft do much of their business.

Telecommuting upending travel patterns

Much of Seattle’s tech and white collar workforce continues to enjoy the option to telecommute, which had been implemented as an emergency measure to combat spread of the coronavirus but has proven popular with many workers. While some employers have tried to get workers back into the office, many have implemented hybrid work arrangements, which means a good chunk of workers are only in the office a day or two per week. The upshot of this is travel demand to Downtown Seattle is much lower than it was pre-pandemic even though 323,000 jobs are based there — at least on paper, according to figures from the Downtown Seattle Association.

Some policymakers and pundits have been worried the pandemic has taken a permanent bite out of transit demand and suggested ridership will never return to 2019 highs. That seems a premature conclusion to make, but certainly the transit industry must grapple with a lower ridership reality for the time being.

One positive that could come out of ridehailing’s slow rebound in Seattle is transit getting a bigger chance to win those riders back. The data shows the ridehailing clearly competes with transit, with the busiest ridehailing markets overlapping with major transit routes. Traditionally, ridehailing used aggressive below-cost pricing to lure customers, but this time around the ridehailing giants cannot afford the same level of rider subsidy.

“One well-known consequence of the rider subsidy is the decline in public transit,” Slate‘s Henry Grabar wrote. “One study estimates the arrival of Uber and Lyft in a city decreases rail ridership by 1.29 percent and bus ridership by 1.7 percent each year. In San Francisco, where Uber was founded, the authors estimate Uber has decreased bus ridership by 12.7 percent. A second study concluded a 5.4 percent decline in bus ridership in midsize cities. A third study clocked the decline at 8.9 percent. A related Uber phenomenon has been a sizable increase in downtown traffic congestion.”

Overall, regional car traffic volumes are at about 95% of pre-pandemic levels, Kroman reported, and traffic congestion is starting to roar back. The increase in telecommuting has smoothed some of the edges from peak congestion periods, but overall traffic is nearing pre-pandemic levels. That has meant some familiar delays for bus riders after a brief pandemic reprieve from traffic snarls.

Returning to normalcy is top of mind at this stage in the pandemic, but normalcy could use some improving upon. Things like faster and more reliable transit come to mind. More dedicated bus lanes and signal priority to get buses through clogged intersections could help achieve it, but the pandemic has also slowed down roll out of RapidRide upgrades to Metro’s bus network — not to mention set back Sound Transit’s light rail and bus rapid transit expansions by a few years. Local leaders should act swiftly to speed up transit upgrades and get projects back on course.

While transit should be the focus for policymakers, ridehailing has an important role to play despite its foibles — particularly if cities are to be successful in creating more car-lite neighborhoods and decreasing dependence on parking. Grabar pointed to ridehailing’s positives in his piece.

“While the transportation-network companies probably increased vehicle ownership, they also gave cities cover to reduce expensive parking mandates, and developers responded with smaller garages or no parking at all,” Grabar noted. “The builders of Cul de Sac, Phoenix’s first parking-free development, credit the rise of ‘ride sharing’ for making their project possible. It has also changed the model for restaurants and bars, which don’t require as much parking as they used to. That’s good for land use and very good for drunken driving rates, which have fallen significantly as Uber uptake has increased.”

It appears ridehailing makes more sense as an occasional luxury rather than an everyday workhorse service competing with transit for daily commuters, given its rapidly rising cost and the congestion impacts it brings. Seattle and Tacoma were leading the nation in forming car-free households prior to the pandemic. A level of ridehailing service that supports that pattern would be a welcome benefit to cities. However, whether ridehailing giants will settle into a symbiotic relationship with cities or thrash about looking for total domination of markets and disruption for disruption’s sake remains an open question.

The post Ridehailing Sees Bigger Ridership Dip than Transit in Seattle first appeared on The Urbanist.

That wasn’t the only social media site to clog restaurants. It’s something of a pastime for TikTok and Instagram, where an influencer tweets out whatever the latest version of a cronut is and the world descends on the restaurant. Some barely survive.

And the sharing economy itself is in a tailspin. Slate is covering the demise of the Uber Subsidy, which is where venture capital kept the ridehailing company afloat for most of a decade, hiding how massively Uber underpriced fares. Uber kept losing money (driving many traditional taxi companies out of business in the process) but monopoly-seeking investors kept showering it in more venture capital. Now, with ridehailing prices increasing, customers are faced with the true costs of being chauffeured around in a world with almost no competitors. 

It’s very easy and correct to look at these failures as standard corporate nonsense screwing up regular people’s lives. It is vital to step back to see larger destructive economic forces at work. App companies are playing with enormous sums of money. When that cash hits the ground in cities, the impact can be catastrophic. It’s happened before.

The size of money

It’s necessary to stop for a second and understand the scale of money that we’re talking about. For a regular person, amounts of money past the first comma are annual expenditures. Past the fifth digit are once-in-a-lifetime purchases. One billion dollars has ten digits: $1,000,000,000.

So when a city budget starts talking about millions of dollars for a bike lane, we can understand that as a significant investment. When King County decides to spend a hundred million dollars on upgrading a ballpark instead of housing, we understand that to be a huge ridiculous expenditure.

Uber is worth $46 BILLION dollars and TikTok is approximately the same. That’s the price of 400 ballpark roofs. This puts the companies in league with Kraft Heinz, Mitsubishi, or the State of Missouri. Where Seattle spent $3.8 million on about half a mile of 7th Avenue improvements, the value of Uber would be able to replace roads, concrete, and stormwater on every street in the city and still have about $20 billion left over.

From a different perspective, GrubHub has the very paltry value of $7 billion dollars. That is the budget for the City of Seattle, including its public utilities. Since its founding a decade ago, Uber has blown through $25 billion dollars in venture capital funding. That’s five years of operating money for all of the municipalities in King County, combined.

We can become very jaded talking about sums of money that exceed the gross domestic product (GDP) of some countries, particularly when it’s passed between something as disconnected as companies and counties. And the size of these companies is minimized because they appear as little squares on a wafer of glass in our pockets.

Meteor sized money

Though your phone is small, the money attached to those icons is huge. As cities have learned, that money has massive destructive power. Billions of dollars in investment have screwed up cities for decades, repeated often through the 20th and 21st Centuries. 

Large flows of cash obliterate the ground wherever they touch. It’s the story of federal highway dollars where the federal government’s 90% subsidy caused cities to tear up neighborhoods. It’s the story of flagship urban renewal where cities chased tourist dollars with shiny new attractions that are now dead malls. It’s the story of megaprojects built to attract international investment, domestic tax shelters, or ephemeral tech dollars. 

Of course, the Chicxulub of all investment meteor strikes is for a city to host the Olympics. Time and time and time again, the Olympics wreck a city’s finances and leave behind moldering heaps of unused facilities. Even cities that emerge relatively unscathed are faced with continued question of “Why did we even do that?”

The differences between an Olympics and a TikTok meme are capacity and time. The Olympics and megaprojects take time and local contractors to build. Apps and virality, on the other hand, are sudden and unpredictable. The electric strike of success is called down by thousands of individual clicks. Places don’t have time to prepare. App companies execute regulatory capture faster than governments can update their regulations, and one way they do it is wooing prominent political insiders to their lobbying shops with gobs of cash.

There is no difference in impacts. Whether it’s an app request to to deliver Thai food or in an official city application to the IOC, both try to taking hold of immense money and attaching it to a place on the ground. It could destroy a kitchen or a neighborhood, but can be catastrophe in both cases.

It’s fallen out of favor to call the internet an “information superhighway.” Perhaps because of how little real information exists there. But the superhighway metaphor is becoming more and more apt. Just like the interstate highways, apps can dump a ton of pollution and traffic right at your doorstep. Like the flood traffic changed the shape of cities, so does a horde of dancing influencers.

The post Apps Break Cities, Just Like Highways Do first appeared on The Urbanist.

In an effort to boost ridehailing drivers’ earnings to meet the minimum wage, Seattle Mayor Jenny Durkan has promised send legislation to City Council later this month proposing a new minimum compensation standard for ridehailing drivers. Currently the Mayor is proposing drivers be compensated 56 cents per minute for trip time, plus an expense rate of $1.17 per mile for expenses related to acquiring, maintaining, and operating vehicles used to transport passengers, as well as covering costs for health insurance and mandatory payroll taxes and license fees required of independent contractors.

If the City adopts the proposed minimum compensation standard advocated for by Parrott and Reich, preliminary research shows hourly gross compensation by approximately would increase 30% and increase net hourly pay by more than 60%, raising the wages of approximately 84% of Seattle drivers.

In response to the Mayor’s proposal, the union representing some ridehailing drivers has asked for greater wage protections and issued four demands, including higher per mile compensation, increased transparency on company commissions, increased pay for short trips, and an end to the five-year vehicle age limit for Uber’s Blackcar SUV service.

Ridehailing drivers’ low wages is an equity issue.

Low wages for ridehailing drivers has been a cause of concern for some time. A 2016-2018 King County study found that 24% of ridehailing drivers operating in the county earned wages at or below the federal poverty level, versus only 4% of workers across all professions.

Using data from the same study, Parrott and Reich identified that ridehailing companies were able to expand their services in Seattle by “tapping into a workforce drawn mainly from immigrant males without a four-year college degree.”

[C]ompared to all payroll workers in King County, [rideshare] drivers are much more likely to be male, black, or foreign-born. The differences within each of these demographic categories between drivers and all workers is substantial: 50 percent of drivers are black, compared to only five percent of all workers. Drivers are nearly three times more likely to be immigrants than all King County workers and are more likely to be of prime working age, 25-54, than all workers. Seventy percent of all TNC drivers have less than a four-year college degree compared to 49 percent of all King County wage and salary workers.

A Minimum Compensation Standard for Seattle TNC Drivers, James A. Parrott and Michael Reich, 2020

Access to healthcare coverage is also an issue for ridehailing drivers. 27% of drivers have no health insurance, while 37% have incomes low enough to qualify for Medicaid. The ability to purchase health insurance has taken on increased importance during the pandemic. Outreach completed by the City of Seattle that polled almost 11,000 ridehailing drivers found that many drivers valued higher pay and access to a safety net over the flexibility that current gig economy model is often cited for.

The press release from the Mayor’s Office acknowledged the race and social equity component of taking action to raise driver pay, including a quote by Fana Abreha, an Uber driver and former physician in her native Ethiopia, who cited how she and her husband have to work seven days a week and trade shifts to care for their children in order to make ends meet.

“I hope a fair pay standard will allow us drivers a financial safety net if we get sick or have unexpected expenses, and the freedom to work towards our dream of a better future for our kids,” Abreha said in the press release.

Any increase in driver compensation will likely confront resistance from Uber and Lyft

Based on events unfolding in California, it is all but guaranteed that ridehailing companies will fight back against a minimum compensation standard or even suspend operations in Seattle if such a law comes into effect via a capital strike. In California, Uber and Lyft are seeking to skirt a new California law that would require them to classify their currently “independent contractor” drivers as employees by threatening just such a capital strike and funding a ballot measure called Proposition 22 which the companies are promoting as a “third way” to resolve inequitable work conditions for drivers.

Under Proposition 22, drivers would still be classified as independent contractors, but would be eligible for some added benefits like a minimum wage and access to health insurance. However, in a move that underscores how serious the two companies about keeping labor costs low, Uber and Lyft are also exploring franchise options that could also allow them to maintain their drivers as independent contractors. In the meantime, thousands of Uber and Lyft drivers have been thrown into limbo as both companies vowed to halt all operations in California and then reversed their positions after an emergency stay on Proposition 22 was ordered by the California court of appeals.

Ridehailing drivers who might be worried by such news right take comfort in the fact that in 2016 after ridehailing companies pulled out of Austin, Texas, drivers found new ways to attract and retain customers according to an article for Wired. “Within a couple weeks or so, I started realizing it’s actually better that [Uber and Lyft] are not here,” said Miguel Monsivais, who drove for both companies starting in 2015, but shifted to operating a pedicab for a driver cooperative called Arcade City, which used a Facebook group to connect riders with drivers after the companies pulled out of Austin and continues to operated to this day, despite run-ins with the law stemming from a lack of permits for drivers. “This is our money, and it belongs to us. It belongs to the community,” Monsivais said.

For the most part, changes in Austin did not last long. After only a year, Uber and Lyft were back and the nascent independent ridehailing industry collapsed under the pressure of steep discounts offered by the industry behemoths. Nevertheless, Arcade City, has continued to thrive. Christopher David, the “Mayor of Arcade City” even recently published an open letter to Californian residents, touting the benefits of their peer-to-peer, self-governing driver cooperative in which drivers set their own rates, keep 100% of their fare, and can build a recurring customer base. The group is urging Californians to vote No on Proposition 22 in order to pave the way for a “new cooperative revolution” in ridehailing.

According to Arcade City, some of the accomplishments of their cooperative model include a workforce that includes twice as many female drivers as traditional ridehailing companies and higher wages and job security for drivers. Depending on how things move forward with Mayor Durkan’s proposed minimum compensation standard, Arcade City might be setting its ridehailing expansion sights on Seattle sometime soon.

Correction: This article originally stated that the Mayor’s proposal did not specify a compensation rate for ridehail driver’s additional expenses. It has been updated to reflect an expense mileage rate of $1.17.

The post Mayor Durkan Recommends Boosting Wages for Ridehailing Drivers, but Union Wants More first appeared on The Urbanist.

Starting June 22th, Via to Transit, King County Metro’s on-demand shuttle service will resume its service to Rainier Beach, Othello, and Tukwila International Boulevard light rail stations. The service resumption occurs one day earlier from when Metro will bring back 23 bus routes and add trips to other routes, restoring service to about 85% of pre-Covid levels. Water taxi service between Downtown Seattle and West Seattle will also be partially restored.

Suspended in late March due to the Covid-19 pandemic, the $3.2 million Via to Transit microtransit pilot is currently embarking on its second year. In contrast to previous regional on-demand shuttle experiments, Via to Transit has exceeded expectations, averaging about 800 riders daily. Service will be available all week in Seattle and weekday peak times in Tukwila, but all rides must occur within the service area, originating or ending at one of the designated light rail stations.

The key to the Via to Transit’s success might lay in the service area it covers and its user demographics. One of Via to Transit’s original goals was to provide service in areas with high percentages of residents with low incomes, people of color, and individuals with limited English proficiency. By targeting a section of Southeast Seattle and Tukwila with both spotty transit service and diverse demographics, it appears to have hit the mark. According to data collected in the first year, about 30% of Via to Transit’s riders are low-income. Additionally some of Via to Transit’s vans are wheelchair accessible, increasing transportation options for people who use wheelchairs or have other mobility assistance needs.

Some of these features distinguish Via to Transit from other regional microtransit pilots, notably the defunct Ride2 Eastgate, which ferried riders to transit stops in a more affluent suburban area where car ownership is high.

“We are redeploying Via to Transit for second year in order to maximize our transportation network in areas where those needs are greatest, reflecting our commitment to create mobility for all–safely, equitably, and sustainably,” said King County Executive Dow Constantine in a press release.

However, with lowered frequency of Link light rail at 20-minute headways at best, the usefulness of Via to Transit service restoration could be somewhat blunted.

How will Via to Transit ensure passenger and driver safety?

Whether or not Via to Transit pilot continues to perform successfully in the Covid era remains an open question. Whereas previously all rides were shared, Via to Transit will now only provide private rides to individuals or small groups, decreasing efficiency and increasing cost per ride, which was already a cause for concern among public transportation advocates such as the Transit Riders Union.

Total cost per boarding on Via is about $10, almost double Metro’s systemwide cost of $4.92. That high cost may come under increased scrutiny as local governments grapple with budget constraints. Between decreased fare collection and loss of sales tax revenue, Metro currently projects a revenue shortfall of nearly $280 million for 2020. While much of the 2020 shortfall will be replaced by funding from the federal CARES Act, beyond that the agency’s financial outlook remains unclear.

Additionally in order to decrease the likelihood of Covid transmission riders and drivers will be required to follow safety measures which include confirming they are symptom free on the app before booking occurs, wearing face coverings or masks if they are able to, and maintaining social distance. A barrier will also be placed in the vehicle, separating drivers and passengers.

Drivers will be responsible for wiping down vehicles with EPA-approved disinfecting products throughout their shifts and vehicles will have an enhanced sanitization daily.

While Via to Transit has pledged to provide drivers with paid sick leave if they become sick with Covid-19, concerns around driver welfare remain. Because Via is a private company, drivers do not receive the same wages or healthcare benefits as King County Metro employees. Via drivers are gig-economy workers who receive an hourly wage, which they agree to accept before signing on to a shift.

A 2018 report by the New York taxi and limousine commission found that Via drivers had the highest hourly earnings of any rideshare company operating in the city. However, with Via drivers earning roughly $21 per hour, the data underscores how low rideshare driver’s earnings are. As reported by Crosscut, Via to Transit drivers in King County are paid $15 per hour, with earnings increasing during high demand periods.

With the transition to private trips, carrying fewer riders might result in drivers’ earnings taking a hit. Last week, the Seattle City Council passed an ordinance guaranteeing premium pay for app-based food delivery workers under the argument that these workers perform an essential service. It is conceivable that a similar logic could be applied to the work of Via to Transit drivers, whose work helps ensure that vulnerable people in Southeast Seattle and Tukwila remain connected to public transportation.

The post Via to Transit On-Demand Shuttle Service Is Back first appeared on The Urbanist.

While COVID-19 is a new threat, the congestion woes for commuters in Downtown Seattle are nothing new. However, recently released survey results from nonprofit Commute Seattle show some noticeable changes to commuting patterns among Downtown Seattle workers in 2019, including a sharp uptick in telework.

Transit, meanwhile, saw its mode share decrease 2% from its peak in the last survey in 2017, and walk share also slipped to 7%. The driving alone rate was up one point to 26%. Commute Seattle noted they were now counting ridehailing trips with just one passenger in the drive alone category, which may help explain driving’s uptick after a decade of declines. Beyond methodological changes, drive alone’s resurgence and transit’s slide may also be tied to a failure to keep buses from getting stuck in worsening congestion, particularly as we entered in 2019 the constrained period known as the Seattle Squeeze. The State Legislature’s recent passage of automatic camera enforcement of bus lanes marks a significant step to fix that–if the pilot program can be implemented well.

Commute Seattle’s Center City Mode Split Survey is conducted biannually by consultant EMC Research​. This year survey’s shows about 6% of downtown employees worked remotely or shifted their schedules to avoid peak-hour commutes in 2019, representing an threefold increase in teleworking among Downtown Seattle employees since 2010. Additionally as many as 14% of the survey’s respondents said they telework at least one day a week.

Even the increase that occurred between 2017 and 2019 was pretty remarkable, with 7,740 more workers, an increase of 46%, claiming to have teleworked on a typical weekday in 2019.

Another standout data point from the survey was how many commuters used multiple modes of transportation in their commutes. More than a third of commuters (36%) reported using more than one mode of transportation during the workweek, with transit topping the list of transportation choices.

While drive alone numbers did inch up slight in 2019, they remain fair lower than 2010, despite the fact that nearly 100,000 more workers commuted into Downtown Seattle in 2019, an area which was revised for the 2019 report to include First Hill and part of Capitol Hill.

“People choosing to get to work without driving alone–and companies who actively support their employees to make sustainable travel and scheduling choices–have made sustained economic growth in downtown possible,” said Seattle Department of Transportation Director Sam Zimbabwe in a statement.

Despite, the increase in teleworking, transit remains by far the most popular way for weekday peak-hour commuters (6am to 9am) to travel downtown, accounting for nearly half (46%) of trips. This translates to more than 135,000 commuters traveling by bus, light rail, commuter rail, streetcar and walk-on ferry trips, a number that is nearly double the number of those who drive alone.

“Metro is gratified that commuters have continued their reliance on public transit, while also using a range of mobility options to reduce dependence upon single occupancy motor vehicles,” said Chris O’Claire, director of King County Metro’s Mobility Division, in a statement. “We will continue our work as a mobility agency to support the public with transportation options that meet their shifting needs.”

Another thing that changed in this year’s survey was where exactly was covered with the boundary of the center city. Commute Seattle altered the survey area to match how City defines the boundaries. Northern portions of Uptown and Capitol were removed, as were southern chunks of the Chinatown-International District and Pioneer Square. Meanwhile, eastern portions of First Hill, Pike/Pine, and Capitol Hill were added.

The commute patterns demonstrated by the Center City Mode Split Survey are consistent with numbers published by Richard Florida in CityLab last year, which found that knowledge economy workers living dense cities were far less likely to drive alone to work than other US commuters. That trend is at least in part attributable to the fact that these workers can afford to live in more desirable metro areas and have jobs that allow for the flexibility to work remotely or on an alternative schedule.

However, access to transit and infrastructure for safe walking and biking also wield great influence over people’s commute patterns, and it is likely that 25% increase in King County Metro Bus service since 2014, as well as Sound Transit’s expansion of light rail, help explain why transit is still the top choice for Downtown Seattle commuters.

If Seattle would like to see drive alone rates back on the decline and transit, walking, and biking rates back on the rise–and our leaders say they would–we need to be more deliberate about rededicating and redesigning street space. Stepping up bus lane expansions, creating a connected network of protected bike lanes, pedestrianizing key walking corridors, and implementing protected intersections are the steps necessary to turn aspirations into reality.

The feature image of Seattle is credited to Mr. Kaya and used via Creative Commons.

The post Telecommuting Surged, Transit Use Lagged among Downtown Seattle Workers in 2019 first appeared on The Urbanist.

Ridehailing’s Impact

Ridehailing has a negative impact on society in a variety of obvious and hidden ways, with the evidence for these effects only recently coming into focus since Uber’s founding in 2009. Economists, engineers, and public policy experts have been able to illustrate how ridehailing is impacting social welfare through increased congestion, reduced transit usage, increased wear on roads, the proliferation of underpaid contract workers, and the increase in traffic fatalities through induced demand for car travel.

While Seattle had not seen a decline in bus ridership until 2019, it has still seen significant crowding out of bus ridership by ridehailing services. These private companies are cannibalizing demand of what is intended to be a public good. These services shift dollars from our transit agencies to shareholders in New York, San Francisco, and Tokyo.

It is estimated that for every passenger ride delivered, an Uber driver drives an additional three miles on Seattle’s congested roads. All those unnecessary miles translate to more cars on Mercer Street, Denny Way, and I-5 than ever before. That’s also more wear on those roads, ultimately leading to more costs for taxpayers to repair and maintain. Climate emissions also continue to climb in Seattle and statewide, despite ambitious goals set for carbon neutrality by 2050.

All those additional miles are also uncompensated work that drivers are left to pay for without fares to cover. An Economic Policy Institute study pinned the true hourly pay for drivers at $9.21, far below Seattle’s minimum wage of $16.39 per hour. And, because this study used a conservative estimate for vehicle expenses, it likely overestimated the true pay of drivers.

Two rides per hour amounts to roughly 16.4 miles based the data that Uber has provided to Seattle over the years and the IRS estimate the expense for that average mileage to be a whopping $9.43 per hour–far above what the study suggested. These studies generally use very conservative variable cost estimates, which are closer to $4 to $5 an hour. New York City didn’t fall into this trap and used the full $10 per hour estimate for expenses in their minimum wage law.

Funding Transit

Uber and Lyft have been competing for market and mode-share through subsidized rides on the backs of their drivers and venture capital investors. Researchers from Oxford University and the University of Chicago were able to quantify that, “each $1 spent on UberX rides generated a “consumer surplus” of $1.60. Across America, that surplus was estimated to be $6.8 billion a year.” Uber is practically giving its services away!

Understanding this consumer surplus helps us to identify the appropriate level of taxation for ridehailing companies ensuring it would be effective in reducing the number of trips and vehicle miles traveled. Increasing the cost of an Uber or Lyft ride would predominantly hit those who are younger, more affluent, and live in urban places, since they account for the vast majority of rides. For those who truly depend on the subsidized prices of Uber and Lyft today, we must continue to invest in transit and alternative transportation to lower the impact of inevitable price increases.

Depending on demand reductions from higher prices, charging Uber and Lyft for every ride they provide in Seattle could bring in more than $65 million dollars annually. This assumes charging a fee equivalent to Metro’s fare amount of $2.75. For perspective, that would roughly equal two-thirds of the size and scope of the Move Seattle levy. It is important to utilize these funds for transit initiatives to increase equitable access to transit and increase mobility. While $2.75 may be far below the estimated consumer surplus of the average ride, it is important to recognize that much of these surplus gains are owed to drivers.

Paying Drivers

While assessing a fee to fund transit, it is important to protect drivers and prevent further degradation of their earnings. Mayor Jenny Durkan and the Seattle City Council kicked the can on developing minimum wage rules for drivers in their Fare Share Plan–although the wage study they’ve initiated could lay the groundwork for a minimum wage like I’m proposing.

Any sensible proposal must include two important aspects. First, would be an hourly minimum wage equal to the prevailing minimum wage of $16.39 per hour for large employers.

Second, a per-mile payment to drivers for all travel to and from rider locations, regardless of occupancy. This per-mile payment is critical to compensate drivers for their costs to provide and operate a vehicle. In addition, it will work to create a strong incentive for Uber and Lyft to proactively reduce deadhead travel by its drivers, further lowering vehicle miles traveled, congestion, and their impacts to the streets. The logically defensible mileage charge would further compensate drivers while avoiding problems with arbitrary rules surrounding ‘cruising’ requirements. Wage minimums, transit surcharges, and mileage payments are proven techniques that can withstand lawsuits and raise employee pay.

A guaranteed $16.39 hourly wage would likely create pressure on drivers in the short-term as ridehailing companies have created a market divorced from reality. By keeping ridehailing prices artificially low, they have boosted demand while simultaneously setting low wages requiring long hours from their drivers to earn a living. The wage requirements will create better long-term conditions for drivers, however higher prices will lead to fewer riders and ultimately fewer drivers to meet that demand.

While laws declaring drivers employees to prevent the exploitation of their pseudo-employee status could make sense, but they can have wide-ranging implications for workers in other industries. Given this, any initiative of that scope would be best accomplished through action from Olympia. California’s landmark Assembly Bill 5 is facing numerous legal and practical implementation challenges over the next year. It would be prudent to understand the challenges they experience before rushing to action.

Act Now

In the past several years, Seattle has been on the forefront of ridehailing regulations, setting an example to cities across the country. While the Fare Share Plan is a step in the right direction, we must continue the forward momentum and build on our transit success before it’s too late. Combining a transit fee and a minimum wage for drivers will utilize proven tools to create a healthier, if smaller ridehailing market in the future. It is important that we act now to protect ridehailing drivers, protect transit, and reduce car reliance in Seattle.

The post How to Combat Ridehailing’s Ills first appeared on The Urbanist.

I caught up with Schmitt just before the talk to hear more about her research. The Cleveland-based author had just been in Portland to do a similar talk at the invitation of Portland State University, who named her an endowed speaker. (Bike Portland has a great summary of her talk as well.) There really hasn’t been many books or academic research done on the pedestrian safety crisis in America even as the crisis gets markedly worse. Pedestrian deaths are up statewide and in nearly every jurisdiction across the country. 

Some smaller publications–and I would include The Urbanist and Streetsblog in that–do talk about street safety, but it can feel like yelling into the void as far as what the agenda is on the regional, state, and federal level. Folks like House Transportation Chair Peter DeFazio (D-Oregon) would rather jump on the next fad–whether autonomous vehicles or hyperloops–than wade into street fights and safety campaigns. We are still a suburban nation more interested in expanding highways than investing in infrastructure for people walking, rolling, biking, and riding transit.

What Schmitt had to say really made me excited for her book to drop. You should be able to pre-order her book (which is being published by Island Press) in July. To track her progress and traffic safety takes, you can follow her on Twitter @schmangee.

Ideas like banning sport utility vehicles (SUVs) or pedestrianizing streets don’t seem so far-fetched after you hear the scale of the problem we face and the corruption under-girding it all. At the very least, the case is clear that much more research on pedestrian safety is needed. Cars have claimed much of our cities and our lives. Automobiles have taken so much from us that we haven’t been able to document it all. In fact, society trains us not to see it. It doesn’t have to be this way.

Below, lightly edited for brevity, is what Angie Schmitt had to say in our interview.

Why is there a pedestrian safety crisis?

What I’m going to try to do with the book–and the first draft is pretty close to being done–is speak to this question of why are so many additional pedestrians being killed than just a few years ago. I don’t think there’s one explanation. I just came from Portland where I spoke at the university and showed this graph which shows this real skyrocketing of pedestrian deaths beginning around 2009. People just want to guess: what’s the cause? Obviously, everyone is curious about it.

A lot of people maybe think smartphones or distraction. You can tie the rise of the iPhone to around that time. But I don’t think it’s any one thing. I think there’s a combination of trends that are underway and some of them have been underway for longer than 10 years. When the recession hit, there was a decline in driving that could have hidden that for a while.

One that I talk about a lot is the rise of SUVs. Cars are getting bigger. Cars are more powerful. They’re more likely to kill pedestrians. Not only are more pedestrians getting struck by cars, but when they do get struck it’s more likely to be fatal. The Insurance Institute for Highway Safety (IIHS) did some research on this that’s really important. Some of the other people who have investigated this like the Detroit Free Press have sort of arrived at the same opinion. They basically found that when you look at what’s happening now versus years ago when pedestrian deaths were lower: more pedestrians are getting struck, but collisions are 29% more deadly.

As for the collisions that are happening, it could be one of two things: either they’re at higher speeds or they’re happening with heavier vehicles. There’s really strong data that the federal government tracks–one of the things they track really well is when there’s fatalities what type of vehicle it was. So we can look at the data really clearly and make the connection to SUVs. So there’s really been this real explosion in growth in SUVs since we came out of the recession.

There’s also some demographic trends happening at the same time that put more people at risk, like the suburbanization of poverty. We’re having a lot of growth of poverty and racial diversity in suburban areas that were planned exclusively around the car, and some of the newer residents are more dependent on walking and public transit than previous residents. So, there’s more people in more dangerous areas doing more walking. That creates problems, and then when they’re getting hit, they’re getting hit with heavier, more dangerous vehicles.

Another thing is older people make up a disproportionate share of pedestrian fatalities, and we just have a lot of growth in that demographic group right now, and growth in the Sun Belt, which is the most dangerous area [of the country]. So some of these demographic trends like growth in the Sun Belt and the aging of the population, those sort of just happening on their own would predict a rise [in pedestrian deaths]. Cars getting more dangerous is another thing. Some of these intraregional traffic trends, like when there’s gentrification and people who are doing more walking and now in more dangerous areas, I also think is a contributing factor.

Should we ban SUVs?

I was one of the first people to talk about this. Even before IIHS and Detroit Free Press started reporting about this about two years ago. I started looking at this about a year prior. I was saying “hey guys, SUV’s are a problem” when that was considered a pretty wild idea. And there was a lot of pushback, and I get it because SUVs are really ubiquitous. And people would say, “you’ll never get to ban SUVs.” There’s a lot of steps between what we’re doing right now–which is having regulations that don’t even warn people about the risks of SUVs and instead promote their sale and use–and completely banning them. I think there’s a lot of intermediary steps.

One thing that I think would be low-hanging fruit is we should be regulating bull bars, or maybe ban bull bars. One intermediary step would be to warn people who are purchasing them that: A) this is a danger to people around you, and B) this actually makes you driving around in your car more dangerous because it eliminates the crumple zone. So, it’s actually a risk to you, and we don’t actually warn consumers about this stuff. A) We could ban bull bars, or B) we could at least could require some sort of warning so people who are taking this added risk are at least informed of it.

In 2016, the Obama administration citing this research that showed SUV’s are a lot more dangerous to pedestrians, proposed rating cars based on pedestrian impact. Right now, no one in the U.S. is testing cars on pedestrian dummies. So we know SUVs are more dangerous, but within the whole category of SUVs, now there’s not even a very clear distinction between sedans and SUVs. It’s more like a spectrum.

One question that has come up that I don’t really have a good answer to is: how bad are crossovers? Some experts I’ve spoken to don’t think some crossovers are a problem. Others think probably they are a little in between in terms of risk. Bottomline is that we don’t have a lot of data because no one is crashing cars against pedestrian dummies in a lab in the U.S. like they are in Europe.

So in 2015, at the end of the Obama administration, the DOT [(United States Department of Transportation)] proposed that the five-star safety rating they do was for the first time going to consider pedestrian survivability. Now that wasn’t in a regulation. Currently, there are no car regulations in place to benefit pedestrians at all. That would have been an intermediary step because automakers really want to get those five-star ratings–some of them–and it helps sell cars. But then Trump came into office, he said we’re going to get rid of two regulations for every one regulation we start. They’re very anti-regulation. And that whole thing did not progress. There’s been no progress on that. I know this guy who is an engineer at Honda, and he said Honda was ready to go. They were working on designs to change the front end of their vehicles to perform well in collisions with pedestrians. And they just haven’t heard anything, so these automakers aren’t moving ahead because the DOT under Trump doesn’t value safety, and especially not pedestrian safety.

Why don’t automakers lead on pedestrian safety?

SUVs cost about the same amount of money to make as cars–these crossovers and everything–but they’re able to sell for $10,000 to $15,000 more. So, it’s enormously profitable for them. So these automakers have done a ton to encourage this trend, because they make a lot of money off of it.

So if you read this book that I talk about all the time called “High and Mighty” by Keith Bradsher–he used to be a New York Times reporter–the psychology of it is really fucked up. People have this violent aggressive impulse that these auto companies are accommodating and encouraging with these vehicle designs. They interviewed marketing executives from the Big Three automakers. At first, it was mainly the American automakers that were doing SUVs; they were just converting pickup trucks, and putting a different top on pickup trucks and fancier seats and selling it for 20,000 extra dollars.

One thing they say in the book was that one of the pioneers of SUVs–he was like a marketing guru–he said Americans are terrified of crime, and he said it’s not really very rational. It’s not based on statistics or anything like that. It’s sort of just based on because we consume a lot of violent media is what he said. So we watch police shows and stuff like that where there’s all this gruesome stuff, and it really impacts the way we see the world. So, they want a car where they can run someone over if someone threatens them on the way to the grocery store. And they were profiting off of that impulse and encouraging it.

Is cheap gas responsible for this trend?

What [Brahsher] says–the book is a little dated at this point [(it was written in 2002)]–he said at least at the time the people who were buying SUVs are pretty wealthy. Right now, new car buyers tend to skew pretty wealthy just in general. What he said is that among wealthier people, gas prices don’t matter that much. They don’t care that much. It’s not a very big part of their income. But for lower-income people it really is.

But around the time the recession happened, there was a big spike in gas prices and SUVs went out of style. But now that they’re low, I think it does encourage it.

What is the role of Uber and Lyft in this problem?

Nationally, I don’t know if it has had a huge impact, but I don’t think it’s helped because they’ve added a lot of vehicle miles traveled–and especially in pedestrian death areas. And they don’t really do any training with their drivers and I don’t think the financial incentives the companies offer really promote safety either. Probably the opposite.

I think it will vary a lot, because they’re primarily in nine metro areas, nine big cities. And the cities they’re in tend to be the safer ones for pedestrians. But still, in a city like San Francisco where one out of five trips is in an Uber or a Lyft, for sure it’s had an impact. Seattle’s probably a little like that as well. City officials who are trying to meet these Vision Zero goals are having to deal with this new product that sort of supercharges driving–that increases driving in areas that are in some ways aren’t that well suited for it. I don’t think it’s a big factor nationally–although I don’t think it’s helpful–but, in some of the big cities where they a large percentage of trips, probably it is more.

One study estimated Uber and Lyft are involved in a surprisingly high number of traffic fatalities, but we don’t really know, because the companies don’t turn their data over, which is bullshit. Even safety data. It’s ridiculous that they’re allowed to operate in all these cities without turning over basic safety data. They would never allow the scooter companies to do that, but in that case they’re collecting the data themselves and analyzing it really carefully. Not as much for Uber and Lyft.

[Uber and Lyft] haven’t made money for a decade. So how long will they keep doing that? Who knows. It’s such a weird thing. Will they start making money? No, probably not. [They say they make money] if they exclude their overhead and all the money they put into marketing and that type of thing. The last I heard, they had laid off a third of their marketing staff and they still had like 800 people doing marketing at Uber.

Are any presidential contenders elevating this issue?

No. I haven’t heard any of the presidential contenders say anything that would bring up traffic safety at all, even though I’ve read their climate change plans. So, no it hasn’t made it into any discussions I’ve seen.

Ayanna Pressley out of Boston–she’s one member of The Squad–she’s pretty engaged in urbanist issues, and she just helped form and she’s going to be one of the chairs of the mass transit caucus, and she’s also in the bike caucus. That’s sort of promising. But among the presidential candidates, who knows. None of them have said anything about it that I’ve heard. One exception is Bill de Blasio, who is no longer a presidential candidate. He did bring up this idea, sort of off hand, of a national Vision Zero. People who work on this stuff sort of jeered at him, and I wrote an article defending him–I’m not like a Bill de Blasio fan or anything–but yes, this should be part of the conversation.

I read this traffic safety book by Neil Erickson. He’s part of the provincial government of British Columbia doing traffic safety stuff. He wrote this really good, really long book about how to end traffic deaths in Canada. He said in countries that have much better safety records that us–like France–the president will make traffic safety one of their top priorities. He uses an example where the former president of France made traffic safety and reducing traffic deaths his number three priority. He said that’s the level of attention that’s needed to do a lot better than we’re doing.

As of now, it’s still not discussed. They’ll talk about gun deaths, but not traffic deaths.

I believe it’s a similar [number of deaths between the two]. And it’s equally amenable to policy. A lot of people think we could do a lot to reduce gun violence with better policies. Traffic is the exact same way. Exactly. We know there are things we can do and we can predict with a lot of accuracy how many lives will be saved, and we just choose not to do them. People don’t believe the science of traffic safety. They’re skeptical. They turn into anti-vaxxers about traffic safety research, and they just dismiss it, sadly.

Comparing Cleveland and Seattle

They definitely very different. Seattle is way ahead of Cleveland on transportation. It’s sort of dumb luck on Cleveland’s part, but here’s there so much homelessness compared to where I’m from, and it was the same in Portland. It seems like such a big problem, and it’s not my area of expertise so I don’t know what to recommend. We don’t see that so much there. That’s one way we compare favorably. We don’t have the crazy housing crisis, but it’s a totally different economy. We have the opposite problem where our economy is just garbage. That comes with its own set of housing problems like vacancy and stuff like that.

One thing that was cool about Portland–and I don’t know that Seattle is any different–is how many people who were working on these issues. We only have two or three guys over our whole traffic department doing everything–signals, resurfacing, everything. Portland has six people working on Vision Zero. The sophistication of the staff and scale of resources is just really different.

How do cities that have made progress keep from getting complacent?

People in Portland–coming from Cleveland it seems really great like Portland wow, but I didn’t get to see how it progressed over time–everyone was still frustrated. And I think that’s it a good sign everyone being frustrated. In cities that are doing better, a lot of people feel that: they’re not satisfied; they’re really engaged. They feel like sort of confident that they can influence the direction of the city. That’s a good sign.

There’s not one formula. On traffic safety issues, there just needs to be more attention to it, and I think a lot of the little actions people are taking all add up. There’s not a lot that won’t be solved by way more attention to the issue. Issues are always competing for attention, but traffic safety in a lot of areas doesn’t get the attention it deserves considering how many people it kills or injures every year. Even in a city like this where there is a lot of attention to it, people’s contributions to keeping it on the forefront of people’s minds and fighting those difficult political battles is really helpful.

The best thing anyone can do is get more people engaged. There’s so much work to do. In Cleveland, when I started doing this stuff and talking about it ten years ago, there was just a few of us working on it, and there’s so much work to do. And now I don’t really work on it that much. I complain about something and there’s these smarter, younger people that are speaking on projects and pushing things forward. That’s much easier than trying to do all the work yourself. So winning people over and getting them involved is really important.

The post Angie Schmitt Plots a Way Out of the Pedestrian Safety Crisis first appeared on The Urbanist.

The Mayor’s plan attempts to address the first problem by setting minimum pay rates for drivers. While this is not the only issue with how the companies treat their workers, it is a step in the right direction, even if it excludes similarly structured food delivery companies. 

With that said, the plan ignores how Uber and Lyft contribute to congestion in Seattle, and enacting the tax as is will be unnecessarily regressive and largely ineffective. For starters, ridehailing is only viable (albeit semi-viable) in dense, urban areas; in other words, the parts of the city where transit works best. It follows that most of the projected growth in ridehailing will be in these areas, where it can be profitable. This, combined with the tax’s structure, could lead to a devastating catch-22: either we curb ridehailing use and we lose funding for transit projects (goodbye, streetcar!) or we allow ridehailing to grow and transit suffers due to congestion.

Really it’s a collision course: 25 million dollars a year for transit is peanuts if the number of ridehailing rides increases from 28 million this year to 49 million, as the revenue estimates imply (or 33 million trips, if you use the entire 75-cent total tax number in your calculations, ignoring obligations to administration overhead and supporting wheelchair accessible vehicles via the existing 24-cent fee). Having more buses on the roads doesn’t help if the roads are even more congested. Unfortunately, the Mayor sees 49 million trips as a larger tax base rather than the problem needing a solution. In short, a flat 51-cent tax will not provide the change we seek.

A flat tax also has a regressive incidence. People with low incomes will pay a greater portion of their income, even if wealthier people are generally using the service far more. This is exacerbated by the fact white collar workers are much more likely to get their ridehailing trips comped by their employers. In a city and state that already have an extremely regressive tax code, we should do everything in our power to make new tax sources as progressive as possible. We also need to recognize that not everyone has a job that allows them to be a little late if the bus doesn’t show, which makes an occasional Uber and Lyft important for job security.

Enter the variable ride-hailing tax, a tax that varies based on the available transit options between the relevant point A and point B. The tax rate would be a function of the applicable transit frequency, time of day, and trip time relative to the trip time by car. For example, if a person wants to take an Uber from Husky Stadium to Capitol Hill during rush hour, they would be assessed at the highest rate, something much higher than 51 cents. Given that taking Link would be quicker, cheaper, and less harmful to society, the person choosing to take an Uber should compensate for the externalities they generate by paying the steepest tax. On the other side of the equation, trips where there is no reasonable transit alternative may not incur any tax or a considerably lower one.

While designing the tax would take some work, in essence it would be no more difficult than having a program that inputs a destination and origin into Google Maps to get a transit trip time and then plugs that number into an algorithm that returns a tax rate. Trips that require multiple transfers could have a lower rate than one-seat rides, and certain areas that are particularly snarled with congestion, like Mercer or Denny, could have a special surcharge. The City should also require that the Uber and Lyft apps show which transit option the rider is being taxed against to nudge them towards it. Ditto Google Maps and other mapping apps.

This tax structure will improve our transit system in two distinct ways. First, the tax itself would be a strong and clear incentive to take transit, reducing congestion from the now displaced ridehailing trips. Second, the revenues from the tax should be used to fund transit improvements that make service more reliable and convenient. We could build sidewalks, bike lanes, bus lanes, or literally do anything that would give people better options. This would cut down on late and full buses that generate emergency ridehailing trips and provide everyone in the city with more freedom of movement.

To be fair, Mayor Durkan’s plan does call for investments in transit and housing, but it ignores the ability of taxes to discourage unwanted behaviors, opting for a carrot-heavy strategy that will likely be ineffective. 

By placing the tax on those who have the most options, we can limit the burden on those who have the least. We don’t live in a city where it’s practical to get everywhere without a car. Putting a small flat tax on ridehailing will harm low-income people who need the services without curbing the excessive and harmful use by the rich.

However, we are lucky enough to live in a city where you can get to a lot of places without a car, and we shouldn’t allow people (like a certain D4 council candidate) to convince us that that isn’t the case. So let’s tax people who could easily get on the bus while supporting transit riders throughout the city with an equitable variable tax.

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The post A Flat 75-Cent Fee is Not Enough: The Case for a Variable Ridehailing Tax first appeared on The Urbanist.

The Mayor would also dedicate $17.75 million to a Driver Resolution Center run by a yet-to-be-disclosed organization. The proposal calls for stronger protections for ridehailing drivers, partially following in the footsteps of California, which just passed sweeping protections. The Mayor aims to include a driver pay study and said she intends to have a policy in place by next summer that guarantees drivers receive the minimum wage of $16 per hour that large employers face, even when accounting for expenses. The study would determine who would implement such a policy.

California did go further, prohibiting ridehailing companies from classifying drivers as independent contractors, upending their already-strained business model and requiring ridehailing companies pay minimum wage and provide healthcare and benefits to full-time drivers. However, Uber and Lyft are planning a $60 million campaign to repeal California’s law via ballot initiative. Uber and Lyft also oppose Seattle’s fee hike and rider protections package, but ridehailing drivers seem to be welcoming it.

“We view this as part of a broad-based package that will address the problem of unfair deactivation, establish driver pay standards with driver input, and at the same time make important community investments in affordable housing and transit,” said Lyft driver Peter Kuel in a statement provided by Teamsters Local 117, which is organizing some ridehailing drivers in Seattle.

Currently the ridehailing fee is 24 cents per ride, which means the total fee would come to 75 cents under the Mayor’s proposal. This is considerably less than New York City’s $2.75-per-ride fee, but on par with Chicago, which charges 72 cents, and similar to Washington, D.C. on lower-cost trips and considerably less on expensive longer trips–D.C. instituted a 6% fee last year. A percentage fee has the advantage of a progressive scale (and not getting diluted by inflation). A $50 run to the airport would net D.C. $3, for example. That long trip would still net 75 cents in Seattle.

Many other American cities have very low ridehailing fees or have failed to implement them altogether. Massachusetts has a 20-cent fee, while neither Los Angeles and San Francisco have fees–despite considerable congestion issues–but are working on it. San Francisco is considering putting a 3.25% fee on the ballot (it’d need to garner two-thirds of the vote). Los Angeles, which has been bleeding transit riders to ridehailing, is still at the study phase, but is kicking around 20 cents.

After the first five years, the portion of the tax dedicated to the streetcar would switch to funding transit, bicycling, and pedestrian infrastructure projects. While the Mayor’s ridehailing fee is many months in the making–apparently recently it went through mediation to finetune the details–the finished product should give many groups–including ridehailing drivers, streetcar supporters, bus riders, cyclists, and pedestrian advocates–something to like.

“This proposal is about ensuring Seattle grows into the city we want to be,” Mayor Durkan said in a press release. “Being a city of the future isn’t just about the incredible gains of the new economy. It’s about being a city where all our workers are treated fairly, our communities can afford to live where they work, and everyone, regardless of income or ability level, has access to high-quality transit.”

The Mayor also promoted her “Fare Share Plan” at a press conference at Yesler Community Center.

Happy End for Streetcar Saga?

Loyal readers of The Urbanist likely recall the Center City Connector streetcar saga with its many twists and turns–long story short, the project is back on, but its targeted opening is delayed until 2026. While at one point the Mayor seemed to be doubting the premises of the project even down to the gauge of the track, she made an about-face and backed the project in January and is now proposing a funding solution in September. Much can happen in seven years, but a dedicated funding source would reinvigorate a project only recently nudged out of limbo–and add some certainty that it will actually happen.

Vocal streetcar critic Councilmember Lisa Herbold, called the Mayor’s funding proposal “fiscally irresponsible,” but it’s not clear if she can rally the votes against it or if she’ll oppose the fee in general. Most other councilmembers have yet to comment, but Councilmember Abel Pacheco did issue a supportive statement and Council President Bruce Harrell issued a positive quote in the Mayor’s press release.

“All [ridehailing] drivers should be receiving fair compensation for their work,” Councilmember Harrell said. “Council will work closely to examine the Mayor’s proposal in a transparent manner and will provide an opportunity for the public to weigh in over the next few months.”

Ridehailing Worsens Congestion

Those hoping that the City would wield ridehailing fees to lower automobile trips and decrease traffic and emissions may be disappointed. Mayor Durkan said she doesn’t expect higher fares to lower ridehailing ridership, which is already incredibly high. In 2018, Uber and Lyft gave about 24 million rides in Seattle, half of which either started or ended downtown, and they expect to top 28 million rides in 2019 and see continued growth in coming years, Mayor Durkan said. Twenty-four million annual rides averages out to about 66,000 rides per day–and recent figures by transportation consultant Bruce Schaller suggests Seattle ridehailing trips peak at 80,000 weekdays.

Academic studies have linked the proliferation of ridehailing to worsening congestion in major cities. For example, ridehailing accounts for 20% of vehicle miles traveled in San Francisco via about 170,000 rides per weekday, and the City blames ridehailing for half of the jump in congestion since 2010. One report claimed 29% of traffic in Manhattan is for-hire drivers.

In many cities including Seattle, Uber and Lyft have come out in favor of decongestion pricing so long as it applies broadly, as they hope to forestall fees targeting just them. Uber even commissioned its own study suggesting decongestion pricing was feasible and could be done equitably, but slyly recommending a daily cap on congestion charges that would benefit the ridehailing industry since their drivers would hit the cap and then pay nothing. Mayor Durkan has also expressed interest in decongestion pricing, but her administration doesn’t appear to be moving quickly enough to implement it by the end of her first term–as she had set as her goal.

Failing Ridehailing Business Model

Efforts by cities to tame ridehailing’s parasitic growth could end up closing any avenue to profitability these companies hoped to have. Uber posted a $5.2 billion loss last fiscal quarter and its slowest growth rate yet. A quarter of Uber’s gross bookings worldwide are in its five biggest metropolitan markets: Los Angeles, New York City, San Francisco, London, and São Paulo. Seattle is in the second tier, but likely not too far behind. Uber and Lyft’s top nine US markets–Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and Washington, D.C.–account for 70% of ridehailing trips in the US. These cities ratcheting up fees and driver protections would seriously challenge Uber’s model.

For their part, Uber and Lyft claim their drivers already have it pretty good and that the fee would hurt driver earnings and makes rides less affordable. “Drivers will also lose, as their earnings decrease with fewer overall rides,” said Lyft spokesperson Lauren Alexander in a statement. The two leading ridehailing companies claim they pay drivers about $20 per hour before expenses–but expenses are really the kicker when you’re burning your own gas, depreciating your own vehicle, covering your own insurance, and for some reason handing out Jollyranchers and bottled water to ferry around the smartphone-toting masses. It’s also not clear how the companies account for the time waiting or circling in-between rides in their compensation estimates.

Uber is threatening to flex its political muscle to block the proposal. Heidi Groover reported that Uber spokesperson Nathan Hambley said the company would be “reaching out to more than 575,000 active drivers and riders [in King County] encouraging them to reach out to the mayor’s office and voice their concerns.”

Maybe one day we’ll look back on this time in American transportation and just think of it as some weird fever dream. But, for now, onward with the temporary salve of a 75-cent fee on ridehailing trips.

Author’s note: This piece has been updated to include the press conference video, the graph of ridehailing rates by income, and the statistic about top nine American ridehailing markets.

The post Mayor Durkan Unveils Plan to Boost Ridehailing Fee to 75 Cents to Fund Streetcar, Affordable Housing first appeared on The Urbanist.

Uber also seems to insinuate it could replace mass transit–although perhaps not rail transit–and do a better job than cities in delivering it, which is ludicrous. Several issues exist with Uber’s whole enterprise and should make cities leery of promoting it and counting on it for their transportation needs.

• Uber is losing massive amounts of money, including a $2.2 billion loss in a nine-month stretch last year.
• Uber seems to be gambling everything on autonomous cars. Specifically, Uber must introduce autonomous cars soon (say within a decade) and ahead of their competitors or their business model may collapse. By rolling out a driverless car network first, a competitor could eat Uber’s lunch.
• Introducing an Uber driverless fleet would cost hundreds of thousands of jobs.
• Uber drivers aren’t going to be thrilled about being replaced by machines, which would likely be a public relations nightmare if and when it does happen.
• Uber is seeking a monopoly on taxi service. Anti-trust laws are a thing, even if conservatives and neoliberals alike have weakened or neglected to enforce them.
• If Uber were to achieve a monopoly, it could easily raise prices. Monopolies are associated with price gouging rather than a healthy capitalist market where competition drives down prices and fuels innovation.
• Uber derives part of its competitive advantage from tax dodging schemes, including insisting it’s a transportation network company, not a plain old taxi company like it is, thus avoiding expensive taxi medallions or insurance. Once cities inevitably re-calibrate the tax code, that advantage will diminish.
• Statistically, Uber service discriminates against African-Americans leading to 35% longer wait times.
• Uber does not lower drunk driving death rates according to the most credible study despite Uber loudly proclaiming itself a drunk driving solution.
• It’s a spiffy app though.

A Monopoly You Say?

In a The Week article titled “How Uber could become a nightmarish monopoly“, Ryan Cooper suggested Uber achieving a taxi monopoly would allow the company to implement far-reaching price discrimination, a form of price gouging furthered by the massive amounts of data it constantly collects on its users.

With traditional cab companies collapsing and most cities reticent to tackle ride-sharing apps head on, Uber would have a chance to dominate the American taxi market to an unprecedented degree. And because any such nationwide taxi monopoly would also have powerful high-tech tools at its disposal, it could be the first company in history to be able to attempt perfect price discrimination — adjusting individual prices so that every taxi customer pays as much as she can afford.

That scenario may sound paranoid but it’s hard to explain investor behavior–namely flushing billions of dollars into a money-losing enterprise–without monopoly-seeking. Cooper explained:

It’s pretty clear Uber is banking on total domination. The company has raked in at least $15 billion in outside investment — including a massive $3.5 billion in a single shot from Saudi Arabia. Some quick arithmetic done by an analyst at Naked Capitalism demonstrates that Uber’s fares only cover about 40 percent of its costs — the rest being subsidized out of investor cash. That, plus the fact that the entire American taxi market has yearly revenues of only $11 billion, suggests one of two things. Either investors are fooling themselves, or they “are assuming this will be a monopoly service,” says Frank Pasquale, law professor at the University of Maryland. The strategy would be to undercut competition with investor-subsidized fares, and then when everyone else is driven out of business, jack prices through the roof and collect monopoly profits. Indeed, the firm claims it already controls over 80 percent of the taxi app market.

Uber’s Fraught Relationship With Unions

Another reason Uber has been in the news in 2017 is the brouhaha erupted over perceived strikebreaking at John F. Kennedy International Airport. New York City taxi drivers staged the work stoppage and protest at JFK in response to President Trump’s Muslim ban, and by opting not to join and in fact turning off surge pricing, Uber was perceived to be breaking the strike. Uber CEO Travis Kalanick had joined an advisory business council to the president, adding to the sense Uber was siding with Trump.

At first, Kalanick tried to push back against the Delete Uber campaign that started in protest: “We’ll partner with anyone in the world as long they’re about making transportation in cities better, creating job opportunities, making it easier to get around, getting pollution out of the air and traffic off the streets,” Salon reported Kalanick told employees. By the way, the anti-pollution collaboration was hard to envision since the new administration has made climate change denial and dismantling the Environmental Protection Agency a central to its platform. Ultimately, after mounting pressure Kalanick ended up quitting Trump’s business council, perhaps to slow the trend of customers deleting Uber from their phones.

Taking a step back though, Uber’s relationship with unions has been strained for a long time. Kalanick likes to frame Uber as taking on the “Big Taxi Cartel” and it’s clear who’s winning. Uber has helped drive a number of taxi companies to file for bankruptcy, such as San Francisco‘s largest, traditional taxi company last year. The largest taxi company in the world is now Uber; so, it’s hard to see them as the underdog taking on “Big Taxi.” Uber is Big Taxi.

And drivers expecting the Democratic Party to intervene on their behalf in Congress should remember Barack Obama’s campaign manager and former Senior Adviser David Plouffe is closely tied to Uber, working as an executive starting in 2014 and later as a senior strategist. (In January, Plouffe was hired away by Facebook CEO Mark Zuckerberg’s social advocacy outfit, where he also may be helping Zuck plot a presidential run.) Uber likely thought they were buying some lobbying power when they dropped millions of dollars hiring him. Plouffe made a lobbying trip to the Seattle in December 2015 and told Seattle Times reporter Daniel Beekman that Uber drivers didn’t need a union, and, by virtue of being independent contractors, they had no legal right to engage in collective bargaining, anyway.

Seattle’s Uber Driver Union Push

In 2014, Seattle Uber drivers began a push to unionize. Uber management pushed back and questioned their motives. The drivers’ complaints were many, including being suspended with little explanation and an authoritarian attitude and lack of respect from managerial staff. The Uber app interface also makes it difficult and less likely customers will tip their drivers, which ends up further driving down drivers’ income. In December of 2015, the Seattle City Council passed a first-of-its-kind law explicitly allowing Uber and Lyft drivers to unionize. Momentum was still slow and Uber ramped up advertising using scare tactics to paint unionization as bad for drivers, including a Superbowl ad. Uber followed that up with a lawsuit against the City of Seattle last month. It’s hard for local unions to match the resources of a global behemoth, but perhaps Seattle Uber drivers will succeed in their unionization efforts.

Wage Wars

For many drivers, it doesn’t seem Uber pays particularly well, perhaps less than minimum wage in some cases–although granted that’s legal since Uber classifies its drivers as independent contractors. Uber slashing fares last year cut into driver wages and the “guaranteed hourly” program it implemented (for qualifying full time drivers in some markets) to compensate didn’t prove very beneficial and actually ate into the boost drivers formerly got from surge pricing. And of course, after factoring in expenses like gas and vehicle depreciation, some drivers report barely turning a profit (see video below). Some Uber drivers even sleep in their cars to clock more hours or avoid long commutes to neighboring cities where they reside.

ScIQ’s video may overstate the case somewhat by ignoring the per-minute compensation drivers receive during a fare and suggesting drivers need a new car every two to three years when cars may last longer than that. However, it illustrates how driver profits can evaporate under closer scrutiny. People brush off the $0.54 per mile federal mileage depreciation rate at their own peril. Eventually cars break down (or age past Uber’s car year requirements) and for an Uber driver that could mean their livelihood, and they’re on the hook to replace it. Do Uber drivers earn a living wage? Some probably do, but it’s very hard to guarantee with the model Uber has set up.

Drivers also have to deal with the problem of “dead miles,” which is the time between fares. Not only are drivers not paid for this time, they also rack up miles and burn fuel. The arrangement is made more unfair by the fact that Uber continues collecting traffic data on their drivers during these dead miles when they aren’t compensated. This is the data Uber is trying to market to city governments and that it uses to fine tune its algorithm. Not paying drivers for dead miles is harder to justify in that light.

Uber As Supplemental Income

About half of Uber driving is done by part-time drivers. “The company proudly proclaims that the share of drivers who work less than 10 hours a week has climbed to more than 60 percent,” Bloomberg News reported. “What Uber has never said publicly is that half of the driving gets done by people who work more than 35 hours a week. Those workers generate about half of Uber’s revenue and are responsible for about half of Uber’s trips.”

Full-time drivers are the backbone of Uber’s business, but Uber has enough part-timers to deal with surges in demand, and, to take the cynical line, prevent full-time drivers from gaining too much power in labor negotiations. As an added bonus, the spare-time drivers make for a good promotional ad and distract from the sense that Uber is exploiting its full-time drivers by not classifying them as employees and thereby providing them employee benefits. Providing a supplemental income to people who are struggling to make ends meets is a worthy goal but unfortunately Uber helps create the problem it supposedly alleviates by skirting labor laws with the independent contractor designation and driving down wages with its various schemes.

Uber May Not Lower Drunk Driving Rates

What happened this New Year’s Eve provides a Seattle example of succumbing to Uber hype rather than making sound transportation decisions. The Seattle Department of Transportation (SDOT), in its infinite wisdom, chose to partner with Uber rather than extend transit service past 2am bar close on New Year’s Eve. The partnership consisted of the City offering a voucher worth up to $10 to decrease the cost of an Uber Pool fare (meaning revelers had to share the cab). Now unfortunately shutting down transit service on thousands of New Year’s revelers in various states of inebriation predictably results in massive surge pricing–as much as ten times standard, apparently. Thus, some users still reported paying dearly even with the Uber Pool promotion SDOT negotiated.

Good luck using your $10 @seattledot #VisionZero Uber discount. Here's the price for a 2 mile ride. pic.twitter.com/IuOriJzdJH

— Qagggy! (@Qagggy) January 1, 2017

And keep in mind this Uber partnership was marketed as a way to reduce drunk driving. The City boasted in a press release: “The City of Seattle’s Department of Transportation (SDOT) is teaming up with Uber to prevent alcohol-impaired driving in our community on New Year’s Eve. This long-term partnership is an extension of Seattle’s Vision Zero plan to end traffic fatalities and serious injuries on city streets by 2030.” SDOT did the same for St. Patrick’s Day in 2016. Unfortunately for SDOT’s Vision Zero goal, the most comprehensive academic study to date found no evidence that Uber or Lyft decreased the rate of drunk driving deaths. Apparently, thrifty drunks and surge pricing don’t play well together. We’re really zeroing in on that Vision Zero target, huh?

Displacing Transit Service

Beyond Uber and cities marketing the techified taxi service as a solution for holiday drunk driving, they’ve also argued Uber can solve the last mile problem of transit or take over some of the lowest return transit routes in hard-to-serve areas. Some cities–like Altamonte Springs, Florida–have even offered their residents Uber discounts in place of putting bus lines into low-density neighborhoods. This is a fine strategy insofar as it saves cities money, is sustainable long-term, and does not leave in the lurch citizens without data plans or the means to pay a more expensive cab fare.

Unfortunately, Uber has also fought to displace transit by seeking higher road priority. Uber pressured Pittsburgh, where it’s testing its self-driving technology, to allow its cars access to bus-only lanes. Uber’s condescending attitude eventually soured its relationship with Pittsburgh officials, leading them to call a one-way relationship in which they’ve given Uber carte blanche and gotten nothing in return, as Quartz reported last Tuesday. Filling bus lanes up with taxis is a sure way to worsen transit service, and Uber was wrong to make such demands of cities.

Another city, Columbus, Ohio, won a $50 million federal Smart City grant to pioneer smart self-driving infrastructure on its streets, which was hailed as the future of public transportation and a great boon for carless low-income residents. As if simply replacing drivers and doing some data analytics will make the whole transportation system miraculously better and lift people out of poverty–essentially the Uber argument. Time will tell.

Of course Uber’s actions have hinted at replacing or privatizing transit service. Matt Buchanon detailed Uber’s efforts to replace bus routes like the MUNI 22 in San Francisco with its new “Smart Route” service in his “The Uber Endgame” piece in The Awl. This could be a worrying trend for society, as Buchanon explained:

One of the more subtle underlying issues with the rise of Uber is the company’s slow siphoning of the political will to fix existing — or build new — public transit infrastructure in major cities. In Affluence and Influence: Economic Inequality and Political Power in America, Princeton Professor of Politics Martin Gilens shows that — as he put it in an article with Northwestern Professor of Decision Making Benjamin Page — “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.” As the wealthy — and, as the prices of Uber and Lyft fall, the slightly less so — essentially remove themselves from the problems of existing mass transit infrastructure with Uber and other services, the urgency to improve or add to it diminishes. The people left riding public transit become, increasingly, the ones with little or no political weight to demand improvements to the system.

And in the process of privatizing transit service, Uber might have to come for existing transit service more directly. Uber has run ads that suggest, unlike a subway train, “you can’t miss an Uber.” Jarrett Walker criticized the ad and Uber said it took it down, but Walker argued the ad laid bare Uber’s anti-transit strategy. Cities should not welcome or hasten Uber’s attempts to disrupt high capacity transit systems. High capacity transit lines carry loads of people that taxis could never dream of facilitating, even with things like Uber Pool or Smart Routes. If Uber concedes transit must continue to operate in high demand corridors, replacing more middling bus routes would likely still lead to more traffic congestion while potentially putting low-income residents at risk of having no viable transportation option.

Ryan Cooper echoed the fundamental street geometry problem that Jarrett Walker and other urbanists have tried to hammer home in response to those who think Uber and/or self driving car will fix everything:

Finally, America’s already-lousy public transportation would rot, as the taxi monopolist uses its political influence and market power to force people into using taxis wherever possible. A taxi app could be an excellent complement to public transport, helping people get to and from the bus stop or train station, but a taxi monopolist is certain to view those services as just another competitor to be stamped out. The resulting congestion — as trains and buses are capable of tremendously more throughput than cars — would be abysmal.”

Uber’s Discrimination Problem

The sharing economy is often presented as a panacea for what ails the economy and society writ large. Unfortunately the hard data paints a much less flattering picture. A study found that people with African-American sounding names had to wait 35% longer than whites in Seattle. Additionally, “across all trips, the cancellation rate for African American sounding names was more than twice as frequent compared to white sounding names.” African Americans have reported similar problems with AirBnB, and studies have borne that out. Moreover, the tech industry as a whole has done a poor job of hiring African-Americans and women, and Uber is likely no different since it refuses to disclose diversity data like other tech giants do.

The Allure of Autonomous Vehicles

The allure of autonomous vehicles is undeniable. Driving can be an incredibly tedious endeavor. Having a computer do the humdrum work instead sounds great. More time to noodle around the Internet! Or, do work on the way to work: a corporate manager’s dream in this late capitalist era of widespread suburban sprawl.

If computers end up being really safe vehicle operators as proponents suggest, autonomous vehicles could also make our streets much safer. Collisions took 37,000 lives in the United States last year and countless more were seriously injured. Another frequently talked about crisis, the opioid epidemic, is linked to traffic violence since many get hooked on painkillers while trying to recover from injuries from collisions. If autonomous cars can make a deep cut in traffic violence, then many would welcome our robot overlords with open arms.

Of course autonomous vehicles would have to prove they are safe–for passengers, bicyclists, and pedestrians alike–before they could gain widespread acceptance and stem the tide of traffic violence. Self-driving prototypes have yet to be perfected, with several collisions and traffic infractions reported. And tragically in June a Tesla with autopilot activated killed a man when it collided with a truck. Tesla didn’t admit fault–the man was supposed to be monitoring his autopiloted vehicle–and argued its traffic fatality rate was still lower than conventional cars since its first death happened after 130 million miles driven, which is 38% more than the US average according to Tesla data: “Among all vehicles in the US, there is a fatality every 94 million miles,” the company noted. Of course Tesla’s safety numbers benefit from some human intervention since its drivers back up the still spotty self-driving technology.

Regardless of the allure of autonomous vehicles, cities must focus on what works and avoid falling into the trap of pursuing something only because its new and hip. Likely, a framework determining how to treat autonomous vehicles for legal reasons will need to be established before fully driverless technology can reach widespread implementation. If an autonomous vehicle were to cause a human traffic death, who would be responsible? The programmer of the technology? The corporation who sold it? Nobody? Unfortunately, we must answer these questions at a time when justice system is under assault from a number of fronts–whether by being supplanted by private arbitration or being undermined by the executive as a coequal branch–and corporate power is on the rise.

The Supreme Court lurch to the Right could doom efforts to pare back the excessive use of binding arbitration, which the New York Times analysis showed favored corporations in a vast majority of cases, including 80% of class actions between 2010 and 2014 and 95% of cases in a sample complied in 2007. The New York Times explained:

Over the last 10 years, thousands of businesses across the country — from big corporations to storefront shops — have used arbitration to create an alternate system of justice. There, rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found.

The change has been swift and virtually unnoticed, even though it has meant that tens of millions of Americans have lost a fundamental right: their day in court.

“This amounts to the whole-scale privatization of the justice system,” said Myriam Gilles, a law professor at the Benjamin N. Cardozo School of Law. “Americans are actively being deprived of their rights.”

If Uber is allowed to keep its binding arbitration clause when it converts to driverless technology, then perhaps those injured and the families of those killed in Uber collisions would have little viable legal recourse to seek recompense. That outcome would start feeling a little bit like a first step toward the robot apocalypse. Maybe I’ve just watched too many dystopian movies. Suffice to say, a new legal framework for autonomous cars seems a necessary step before the Great Automation happens.

When Time-Tested Solutions Beat Disruptive Innovation

Transit works and has worked for centuries. Transit works particularly well when it has sufficient frequency and dedicated lanes that prevent it from getting stuck in traffic, which should be where transportation departments focus their energies. Uber may have a role to play complementing transit. The criticisms expressed here could be way off base. Uber may answer lingering questions about racial and economic equity, workers rights and compensation, and monopoly-seeking. Maybe Uber really does have some master strategy that will allow them to salvage their business model once venture capital dries up without resorting to monopoly. Cities probably shouldn’t bet on it, though.

The featured image was taken by Elekes Andor in Budapest and is used via Wikipedia Commons.

Appendix A: How Do You Lose More Than $2 Billion In A Year?

In a nutshell:

Uber Hires Veteran NASA Engineer to Develop Flying Cars https://t.co/PDPVh4RpqD

— SPUR (@SPUR_Urbanist) February 6, 2017

The post Uber’s Hollow Promise For Cities first appeared on The Urbanist.