Rethinking the role of ride hailing services and regulation

The news concerning the suicide of a New York City (NYC) cab driver on February 10, 2018, spurred the discussion regarding the struggles of NYC's cab drivers. In a Facebook post made prior to his suicide, Douglas Schifter expressed his dissatisfaction; his dissatisfaction resulted from an increased competition with ride-hailing services such as Uber, the lack of concern for cab drivers, and the increase in the number of overworked and underpaid days (Simon, 2018). Although Schifter's suicide was shocking,  NYC saw two other suicides in the past three months pertaining to cab industry and the frustration from increased competition.  Dissatisfaction among the cab drivers, therefore, is not new in NYC ((Rivoli, 2018).  The case of Schifter's suicide is, however, a powerful alarm that suggests to assess the effects of ride-hailing services and rethink the role of ride-hailing services in our rapidly growing cities. Furthermore, as cities strive to become smarter and progress towards a gig economy, in what ways will the jobs of transportation providers be secured is an unanswered question. 

1.     What are the negative effects of the rise of Uber in NYC?  

  In 2017, the Taxi and Limousine Commission's data reported a total of 103,000 for-hire vehicles in NYC, and 68,000 of these were vehicles from ride-hailing app companies. However, in 2013, the total number of for-hire vehicles was only 47,000.  Consequently, from 2013 to 2016, the gross annual bookings of cab drivers decreased from $88,000 to $69,000 per year ((Hu, 2017). An increased supply of ride-hailing services to fill transit-gap implies an increased financial distress plus competition among NYC's cab drivers.  

The effects of the rise in ride-hailing services are not limited to increased competition and financial distress amidst cab drivers. A decrease in transit ridership is also associated with the rapid rise of ride-hailing services like Uber.  Recent studies showed that ride-hailing services resulted in a loss of 6% ridership from bus services.  According to a research by Clewlow and Mishra in 2017, 49% to 61% of the ride-hailing trips from Uber/Lyft would have been made by public transit, walking, and biking or would not have been made at all (Bliss, 2017).  

Not only a change in the modal split but also an increase in congestion has been associated with the rise of ride-hailing services in American cities. If Uber is responsible to some extent for the decreased public transit ridership and increased congestion, would it be necessary to regulate the number of Ubers?  

2.     What are the positive effects of the rise of Uber in NYC?  

Although the negative effects of Uber on the cab industry and transit ridership are often highlighted, one cannot completely dismiss the perks that Uber brings to our cities. The ability to move around with real-time information about the car's location, the ability to escape problems of finding a parking spot, and returning home even after a night of drinking, are incredible features for a ride-hailing service user. 

3.     Have regulation to the number of Ubers in NYC been proposed? 

Recognizing the increased competition resulted from Uber, proposals to regulate the Uber industry was made earlier in NYC. According to the 2015 proposal, a restriction of 1% rise in the number of Ubers per year would be imposed at NYC.  At the time the bill was proposed, 2,000 new Uber licenses were issued in NYC every month (Flegenheimer, 2015).  

In 2015, the bill, however, was widely criticized by Uber supporters. Uber even broadcasted a television advertisement to oppose the NYC mayor's proposed bill that would cap the number of Uber. The head of Policy and Strategy at Uber reported the risk of loss of around 10,000 jobs if a cap on the number of Ubers was placed (Segal and O'Brien, 2015).  As a result of the ways in which the controversy was taking shape, the bill to regulate the number of Ubers was put on halt. At that time, the potential loss of Uber’s jobs plus the lack of decisive data were cited as a reason to put on halt the bill to regulation.

Ironically, Uber’s reasoning related to the risk of job loss could also be thrown back by cab drivers provide to demand a regulation.  Therefore, the debate on whether regulation on Uber gets introduced is also a question of whose voice the city is willing to listen to. Considering Uber has had a big market in NYC, will the government be able to introduce some regulation even though these regulations might be opposed by some stakeholders? Or, will NYC back off if Uber protests again with another television advertisement that critiques the government's decision? 

4.     Rethinking the place of Uber and the cab driver scenario 

Apart from whether Uber should be regulated or not, it is also imperative to think of the extent to which the city should allow ride-hailing services to fill the transit gap. Is it correct that the wide availability of Uber blurs the need to improve public transportation? 

In addition to Uber blurring the need for public transportation improvement, rethinking the current pricing is also necessary. If requesting an Uber ride at the touch of a screen is more convenient to customers, how are the cab drivers going to sustain themselves in the cab industry? If options of Uber Pool and Lyft Line offer an attractive package to share costs among other riders, will people continue to ride a regular cab at NYC?  Are NYC riders responsible to make the decision of choosing between Uber and a cab? Alternatively, should such decisions that directly affect wages and the overall living conditions be determined by the government and transportation planners? 

Finally, in response to the aforementioned arguments, one might make the analogy that critiquing Uber as a reason for job removal is similar to supermarket clerks blaming the recently developed automated self-checkout regions. Even if the analogy was relevant, ensuring that the financial security of cab drivers is maintained is crucial. What kind of adjustment will be made to ensure that the rapid rise of Ubers does not hurt those who were working in the same industry? Therefore, if the news of Schifter's suicide was to suggest something, it would be this: We need to think and rethink the role of ride-hailing services and their regulation in our cities.   

References  

Bliss, L. (2017, October 12). The Ride-Hailing Effect: More Cars, More Trips, More Miles. Citylab. Retrieved from https://www.citylab.com/transportation/2017/10/the-ride-hailing-effect-more-cars-more-trips-more-miles/542592/ 

Flegenheimer, M. (2015, July 22). De Blasio administration dropping plan for Uber cap, for now. NYTimes. Retrieved from https://www.nytimes.com/2015/07/23/nyregion/de-blasio-administration-dropping-plan-for-uber-cap-for-now.html?mtrref=www.google.com&gwh=826E78D3FB323C5E8350E937234AF903&gwt=pay

Hu, W. (2017, December 26). Your uber car creates congestion. Should you pay a fee to ride? NYTimes. Retrieved from https://www.nytimes.com/2017/12/26/nyregion/uber-car-congestion-pricing-nyc.html 

Rivoli, D. (2018, February 13). Cabbies rally outside city hall demanding taxi and limousine commission 'stop robbing us' after suicides of three drivers. NYDailynews, Retrieved from http://www.nydailynews.com/new-york/cabbies-rally-city-hall-suicides-drivers-article-1.3815948 

Segal, L., &  and O'Brien, A.S. (2015, July 23). Big win for Uber, New York backs down. CNNTech. Retrieved from http://money.cnn.com/2015/07/22/technology/uber-new-york-de-blasio/index.html 

Simon, S. (2018, February 10). Driver's suicide highlights 'race to the bottom' in cab industry, union director says. NPR,  Retrieved from https://www.npr.org/2018/02/10/584757778/taxi-drivers-face-financial-crisis