Uber efficiency

Ride-sharing services like Uber and Lyft are using a vastly more efficient technology for matching people who want a ride with people who want to drive them than was available when the taxi radio dispatch systems were set up in the 1940s.

One measure of that efficiency is how much time drivers spend searching for somebody who wants a ride or driving to pick them up. A new study by Judd Cramer and Alan Krueger at Princeton found that only 40% of the miles that taxis drive in Los Angeles and Seattle are spent carrying a passenger someplace the person wants to go. By contrast, for UberX the numbers are 64% and 55% for the two cities, respectively. In terms of hours worked, taxi drivers in San Francisco spend only 38% of their work hours with a passenger on board. For UberX, that number is 55%.

Percent of miles driven with a passenger for taxi and UberX drivers. Source: Cramer and Krueger (2016).

Another plus for the drivers is the added flexibility. Uber and Lyft drivers can work when they want, and enjoy extra pay when rides are particularly needed during peak demand.

The efficiency of the ride-share technology also directly benefits the riders. An earlier study by Berkeley transportation researchers found that 93% of San Francisco riders using Uber, Lyft, or Sidecar spent less than 10 minutes waiting for their ride and no one spent more than 20 minutes. For people trying to get a taxi come to their home, only 35% got a ride within 10 minutes, and 23% were still waiting after 20 minutes.

Who regulates Uber and Lyft? The users themselves do. After each ride, the rider rates the driver and the driver rates the rider. If the vehicle is dirty or the driver is rude or drives recklessly, that driver will very soon be out of the business.

A host of conventional regulations drive up the cost of the traditional taxi business. For example, in Chicago:

Cabdrivers have to have a chauffeur’s license, which includes training, drug testing, a physical exam and criminal background and credit checks. They pay a $600 annual fee and a $78 monthly ground transportation fee.

That all gives Uber and Lyft a pretty unfair advantage, doesn’t it? Rather than find ways to help taxis become more efficient, Chicago Alderman Anthony Beale thinks a better plan is to make Uber and Lyft less efficient. The Chicago Sun Times reports that Beale’s proposed ordinance

would require Uber and Lyft drivers to get the same city chauffeur’s licenses required for cabdrivers. In addition, Uber and Lyft drivers would be required to be fingerprinted by a city-approved vendor and get their vehicles inspected by the city.

A minimum of 5 percent of the total fleet of both companies would have to be accessible to customers with disabilities. And no ride-hailing vehicle could remain on the streets of Chicago that is more than 6 years old. Salvage, rebuilt and junk vehicles would be expressly prohibited. Lyft and Uber, whose drivers owe the city $15 million in unpaid parking tickets, red-light and speed camera fines and water bills, would also be required to immediately settle those debts to renew their operating licenses.

Lyft claims the ordinance would “make it nearly impossible for ridesharing to operate in the city”. Uber says “this would put an end to uberX in Chicago and the affordable ride Chicagoans have come to expect.”

If you agree, Uber has a petition you can use to register your views.