Ride Hailing Services

This article is about services that allow people to use a mobile application to hail a ride from drivers who drive their personal vehicles. For shared-use systems that use a fleet of vehicles maintained by a company, see car-sharing. For shared, flexible public transportation, see demand-responsive transit.

Overview

Ride-hailing services allow people to use a mobile application to hail a ride from drivers who drive their personal vehicles. Transportation Network Companies (TNCs), such as Uber and Lyft, match passengers with drivers through their mobile applications. Ride-hailing works best in higher density areas with higher likelihoods of riders and drivers in close proximity, so these services are available in most U.S. cities but do not serve as many rural areas. Through time, TNCs have begun to provide more services. Services like UberPool and LyftLine allow riders to match with other riders going in similar directions, resulting in more efficient operations and cheaper fares. Uber and Lyft have both experimented with micromobility provision, including dockless bicycles and e-scooters, and Uber maintains a food delivery service, UberEATS. Uber and Lyft have both been accused of unfair labor practices throughout their history. Because they classify their drivers as independent contractors instead of as employees, drivers do not receive benefits such as worker’s compensation, health care, or unemployment insurance.

Timeline

- June 2010: Uber launches in San Francisco

- June 2012: Lyft launches in San Francisco

- 2014: UberPool and LyftLine launch

- April 2015: UberEATS launches in four pilot cities

- May 2016: Uber and Lyft cease operations in Austin, Texas in response to city ordinance that would require ride-hailing companies to conduct fingerprint background checks and conform to other restrictions.

- May 2017: Texas legislature passes a bill overruling the Austin city ordinance; Uber and Lyft begin operations in Austin again.

- May 2017: Lyft and Waymo reach deal to collaborate on self-driving vehicle technology

- February 2018: Uber acquires Jump Bikes and launches Uber Bike.

- November 2018: Lyft acquires Motivate and becomes the U.S.’s largest bikeshare system.

Analysis of Implications

The rise of ride-hailing services has led to many land use, travel demand, equity, and policy impacts and considerations, and because these services can be expected to increase with the use of autonomous ridesharing, these impacts are also expected to increase in magnitude.

Effects on Transportation and Land Use

Basic ride-sharing services have evoked mixed reactions from transportation planners and urbanists. Primary critiques include that ride-hailing services increase vehicle-miles travelled and pull their riders away from walking, biking, and transit. Additional critiques center around Uber’s and Lyft’s inability to share travel data with the public.

However, some urbanists have hope for the idea that ride-hailing could be part of a shared mobility platform that includes public transportation. The 3 Revolutions platform from UC-Davis produces information on the benefits of electric, automated, and shared vehicles. Ride-hailing can, in some cases, help solve the “first-mile/last-mile problem”, helping passengers get to transit stations. It also allows individuals to live without a car and take transit, with the knowledge that ride-hailing will be available if needed. Lastly, it reduces the need for parking spaces, allowing for the repurposing of parking lots and garages.

Equity

Equity is a key topic of concern in relation to ride-hailing. Not all populations have access to TNCs. The requirement to pay by credit card, debit card, or PayPal account excludes many unbanked populations from using the services, although new efforts by PayPal to provide some services for unbanked populations may increase accessibility to TNCs. TNCs are not accessible to all groups also because rides are most easily hailed through an app. Uber and Lyft also both provide service through the internet to increase accessibility, but it still requires the user to have either a smartphone with an active data plan or internet and computer access for each leg of their trip. Finally, riders in rural or low-density locations also may not have access to TNCs. As mentioned above, TNC services are often not available for those in rural or lower density areas, and if there is technically TNC coverage in a low- density area, there may not be an available driver when a person is looking for a ride. TNCs are not accessible to all populations with disabilities, but both Uber and Lyft are working to improve their services for those groups. Both Uber and Lyft have specific services for wheel-chair friendly vehicles, but because both companies traditionally have relied on drivers with personal vehicles and most vehicles are not wheel-chair accessible, both have been criticized as not providing enough service for wheel-chair users. Both Uber and Lyft have improved their services for those with disabilities, including through partnering with groups that do have wheelchair-accessible vehicles. Some paratransit agencies, including Massachusetts Bay Transportation Authority (MBTA), have started to provide their paratransit services by subsidizing TNC pick-up and drop-off because it provides better service to for the passenger and is cheaper for the paratransit agency.

Labor, Safety, and Culture Critiques

In May 2016, Uber and Lyft ceased operations in Austin after its voters upheld an ordinance that would require ride hailing companies to conduct fingerprint-based background checks, label their vehicles, and not pick up or drop off their passengers in certain lanes of the city’s streets. However, when the Texas legislature passed a bill in May 2017 overriding local ordinances like Austin’s, Uber and Lyft returned. In May 2020, city attorneys from Los Angeles, San Diego, and San Francisco filed a lawsuit asserting Uber and Lyft gain an unlawful competitive advantage by misclassifying workers as independent contractors. In August 2020, a preliminary injunction is set to go into effect and Uber and Lyft are likely to temporarily cease operations in California. Many critiques have been lodged against Uber related to its leadership, corporate working conditions, and business management.

Case Studies

Bike and Scooter Share

In 2018, Uber acquired JUMP bicycles and partnered with Lime to incorporate e-scooters into its transportation options. Earlier that year, Lyft acquired Motivate, which accounts for about 80 percent of bike-share trips in the US as of 2018. In 2020, Uber offloaded its bikeshare division to Lime, which led to the scrapping of tens of thousands of electric Jump bikes.

Uber/Lyft Alternatives

While Uber and Lyft enjoy a large portion of the ride-hailing market, a variety of ride-hailing companies have attempted to carve out a market niche to compete with them. RideAustin marketed itself to its Austin, Texas customers as a more ethical alternative to Uber and Lyft. It started in 2016, when Uber and Lyft ceased operations in Austin, but folded in 2020, partly as a result of lost revenue after Uber and Lyft restarted operations in the city. Via, a ride-hailing service that focuses on pooled rides, maintains a much lower market share than Uber and Lyft but markets itself based on positive relationships with cities, efficient operations, and lower fares.

Effects of COVID-19 on Ride-Hailing

Ride-hailing revenue catered in March 2020 in response to the global pandemic. While demand picked back up rapidly in some areas of the US, other areas have seen prolonged droughts in demand. UberEats, however, grew in response to the pandemic.

“Players in the Field”

- Uber: https://www.uber.com/

- Lyft: https://www.lyft.com/

- Via: https://ridewithvia.com/