Op-Ed: Pay to Play -- TNCs for the Public Good
By Josh Linden
For all of their popular appeal, transportation network companies – the Ubers, Lyfts, and Vias of the world – are quite expensive. Although they frequently represent a cheaper and more convenient alternative to conventional taxis, this comparison alone is insufficient to account for the full TNC impact on cities, including the indirect (and public) costs associated with changing transportation patterns. Congestion, transit, safety, and emissions are all affected by the TNC revolution, and the costs are quantifiable in many cases. It is time for public officials to consider available policy tools like taxes and regulations to raise cash for mitigating these negative externalities, and to leverage greater TNC cooperation on issues that can help all levels of government plan for a more efficient and equitable transportation system.
The research on the precise level of TNC impact is still emerging – in part because private companies rarely share their data (more on that later) – but a few studies have successfully demonstrated, at minimum, the nature of the relationship between TNC growth and the issues listed above. Let’s start with congestion. Bruce Schaller, a transportation analyst and former official with New York City’s Department of Transportation, produced a study last year that revealed some startling numbers. Between 2013-2017, TNCs placed 50,000 vehicles on NYC streets and by 2017 carried 500,000 passengers per day. These volumes far outweighed relative declines in the traditional taxicab industry, which meant that by 2017, TNCs were responsible for a 36% increase in for-hire vehicle miles traveled. Moreover, the number of miles traveled without a passenger increased by a staggering 81% since 2013 (known as “deadheading”), and during the evening rush hour peak, that figure nearly doubled to 157%. In short, TNCs are increasing both the total number of vehicles on the road and a disproportionately higher number of VMT, since “deadheading” creates longer overall trip distances than a passenger would travel in a personal vehicle.
If more people are taking for-hire vehicles as a result of TNCs, what is the net effect on other travel modes? Although the data is mixed in some areas, it’s clear that TNCs are not simply generating entirely new travel – they are primarily siphoning people away from other modes. A study from Boston’s Metropolitan Area Planning Council suggests that 42% of ride-hail users in the Boston area would have otherwise taken transit, while 12% would have chosen some form of active transportation. This not only means that more than half of all TNC trips produce an additional car on the road, it also explains a portion of the recent decline in transit ridership across many urban areas. A similar study from UC Davis calculated a smaller negative effect on transit ridership, but still concluded that absent a TNC option, between 49% and 61% of ride-hail passengers would have used transit, active transportation, or would not have taken the trip at all.
The correlation between TNCs and traffic crashes is less clear. Anecdotally, however, a few characteristics of TNCs appear to increase the risk of driver error and roadway incidents. TNC routing and initial passenger engagement are entirely app-based, which means that drivers are consulting their mobile phones while driving. While most use a hands-free approach with a dashboard mount – in line with many state and local requirements – research has shown that any use of a mobile phone while driving can increase driver distraction. And, importantly, driver error is by far the leading cause of traffic crashes nationwide.
In social terms, the cost of more vehicles, higher congestion, lower transit ridership, and distracted driving is clear. In the aggregate and over the long term, it means a need for more public expenditures and federal/state subsidies to mitigate harmful emissions and support transit budgets. It also creates the conditions for additional downstream effects, such as increased vehicle use among residents who no longer have adequate transit service due to austerity measures in response to falling ridership revenue. From an environmental, fiscal, and equity standpoint, the status quo with TNCs is simply not working.
So what can we do? Public officials at the state and federal level have a variety of tools at their disposal to address these negative consequences, or even reduce TNC use to a more socially optimal level. For example, some cities – like Washington, DC – have chosen to level a higher tax on TNC rides, and then use the revenue to reinvest in transit operations and maintenance. This approach could be replicated at the federal level through a nationwide tax on TNCs to build a new federal transit fund. This would have the dual benefit of creating new revenue stream to support new and existing transit around the country, and also raise the overall cost of TNC trips to help reduce the amount of ride-hail travel. This tax could also create a graduated structure where trips into a CBD would be taxed at a higher rate to help offset the higher overall cost of TNC traffic in and around downtown districts. States and cities could play a role in determining the precise variability in tax rates to account for differences by location.
On the regulatory side – the federal government should require all TNCs to share their anonymized data with state and city departments of transportation. This granular form of mobility data provides invaluable information that can help governments better understand how people tend to move around a city and during which times of day, disaggregated by demographic groups (to the extent that users volunteer to share that information). This data can then be used to help state and local agencies -- along with metropolitan planning organizations and regional transit providers – optimize existing transit networks, develop plans for new services to respond to population and/or density growth, and identify a variety of popular TNC corridors to assess the quality of existing active transportation facilities and perhaps plan for additional infrastructure to shift some TNC users into walking, cycling, scootering, or other active transport options. Access to TNC data will help our public officials – the stewards of our public spaces and planners of our transportation future – more effectively design the whole network to improve sustainability and reduce overall motor vehicle use.
On the local level, city governments should also consider limiting TNC entry in highly congested areas and during peak hours. This could come in the form of a maximum number of vehicles (perhaps with forced rotation to prevent a single TNC driver from camping out in a restricted area all day), a maximum amount of time in the zone for any given TNC vehicle, or even a total exclusion of all TNC vehicles during specific periods.
Public officials and planners should not be passive observers, particularly when private companies profit off the use of public infrastructure and generate a host of social costs (even if they provide an efficient mobility option for some, and generate mild amounts of new economic activity for others). The benefit that TNCs claim to offer – convenient mobility at a relatively affordable price – are public goals as well, and officials should therefore first determine how we can meet those goals while reducing associated social costs. TNCs can certainly play a role in doing so, but at a more sustainable level that doesn’t damage other public interests. Public officials should help us reach that level by requiring certain things – taxes, data, and quantity controls – from the TNCs in exchange for their use of our public spaces.
For all of their popular appeal, transportation network companies – the Ubers, Lyfts, and Vias of the world – are quite expensive. Although they frequently represent a cheaper and more convenient alternative to conventional taxis, this comparison alone is insufficient to account for the full TNC impact on cities, including the indirect (and public) costs associated with changing transportation patterns. Congestion, transit, safety, and emissions are all affected by the TNC revolution, and the costs are quantifiable in many cases. It is time for public officials to consider available policy tools like taxes and regulations to raise cash for mitigating these negative externalities, and to leverage greater TNC cooperation on issues that can help all levels of government plan for a more efficient and equitable transportation system.
The research on the precise level of TNC impact is still emerging – in part because private companies rarely share their data (more on that later) – but a few studies have successfully demonstrated, at minimum, the nature of the relationship between TNC growth and the issues listed above. Let’s start with congestion. Bruce Schaller, a transportation analyst and former official with New York City’s Department of Transportation, produced a study last year that revealed some startling numbers. Between 2013-2017, TNCs placed 50,000 vehicles on NYC streets and by 2017 carried 500,000 passengers per day. These volumes far outweighed relative declines in the traditional taxicab industry, which meant that by 2017, TNCs were responsible for a 36% increase in for-hire vehicle miles traveled. Moreover, the number of miles traveled without a passenger increased by a staggering 81% since 2013 (known as “deadheading”), and during the evening rush hour peak, that figure nearly doubled to 157%. In short, TNCs are increasing both the total number of vehicles on the road and a disproportionately higher number of VMT, since “deadheading” creates longer overall trip distances than a passenger would travel in a personal vehicle.
If more people are taking for-hire vehicles as a result of TNCs, what is the net effect on other travel modes? Although the data is mixed in some areas, it’s clear that TNCs are not simply generating entirely new travel – they are primarily siphoning people away from other modes. A study from Boston’s Metropolitan Area Planning Council suggests that 42% of ride-hail users in the Boston area would have otherwise taken transit, while 12% would have chosen some form of active transportation. This not only means that more than half of all TNC trips produce an additional car on the road, it also explains a portion of the recent decline in transit ridership across many urban areas. A similar study from UC Davis calculated a smaller negative effect on transit ridership, but still concluded that absent a TNC option, between 49% and 61% of ride-hail passengers would have used transit, active transportation, or would not have taken the trip at all.
The correlation between TNCs and traffic crashes is less clear. Anecdotally, however, a few characteristics of TNCs appear to increase the risk of driver error and roadway incidents. TNC routing and initial passenger engagement are entirely app-based, which means that drivers are consulting their mobile phones while driving. While most use a hands-free approach with a dashboard mount – in line with many state and local requirements – research has shown that any use of a mobile phone while driving can increase driver distraction. And, importantly, driver error is by far the leading cause of traffic crashes nationwide.
In social terms, the cost of more vehicles, higher congestion, lower transit ridership, and distracted driving is clear. In the aggregate and over the long term, it means a need for more public expenditures and federal/state subsidies to mitigate harmful emissions and support transit budgets. It also creates the conditions for additional downstream effects, such as increased vehicle use among residents who no longer have adequate transit service due to austerity measures in response to falling ridership revenue. From an environmental, fiscal, and equity standpoint, the status quo with TNCs is simply not working.
So what can we do? Public officials at the state and federal level have a variety of tools at their disposal to address these negative consequences, or even reduce TNC use to a more socially optimal level. For example, some cities – like Washington, DC – have chosen to level a higher tax on TNC rides, and then use the revenue to reinvest in transit operations and maintenance. This approach could be replicated at the federal level through a nationwide tax on TNCs to build a new federal transit fund. This would have the dual benefit of creating new revenue stream to support new and existing transit around the country, and also raise the overall cost of TNC trips to help reduce the amount of ride-hail travel. This tax could also create a graduated structure where trips into a CBD would be taxed at a higher rate to help offset the higher overall cost of TNC traffic in and around downtown districts. States and cities could play a role in determining the precise variability in tax rates to account for differences by location.
On the regulatory side – the federal government should require all TNCs to share their anonymized data with state and city departments of transportation. This granular form of mobility data provides invaluable information that can help governments better understand how people tend to move around a city and during which times of day, disaggregated by demographic groups (to the extent that users volunteer to share that information). This data can then be used to help state and local agencies -- along with metropolitan planning organizations and regional transit providers – optimize existing transit networks, develop plans for new services to respond to population and/or density growth, and identify a variety of popular TNC corridors to assess the quality of existing active transportation facilities and perhaps plan for additional infrastructure to shift some TNC users into walking, cycling, scootering, or other active transport options. Access to TNC data will help our public officials – the stewards of our public spaces and planners of our transportation future – more effectively design the whole network to improve sustainability and reduce overall motor vehicle use.
On the local level, city governments should also consider limiting TNC entry in highly congested areas and during peak hours. This could come in the form of a maximum number of vehicles (perhaps with forced rotation to prevent a single TNC driver from camping out in a restricted area all day), a maximum amount of time in the zone for any given TNC vehicle, or even a total exclusion of all TNC vehicles during specific periods.
Public officials and planners should not be passive observers, particularly when private companies profit off the use of public infrastructure and generate a host of social costs (even if they provide an efficient mobility option for some, and generate mild amounts of new economic activity for others). The benefit that TNCs claim to offer – convenient mobility at a relatively affordable price – are public goals as well, and officials should therefore first determine how we can meet those goals while reducing associated social costs. TNCs can certainly play a role in doing so, but at a more sustainable level that doesn’t damage other public interests. Public officials should help us reach that level by requiring certain things – taxes, data, and quantity controls – from the TNCs in exchange for their use of our public spaces.
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