The Fuse

Uber Expands Services to Help End Car Ownership in Cities

by Matt Piotrowski | April 13, 2018

“We have to have a solution for car ownership and ensure that… living in a city does not require a car.”

Today about half of the world’s population lives in cities, and in the coming decades that figure will reach two-thirds. With this migration will come challenging transportation dilemmas. But it also brings about opportunities, and ride-hailing service Uber is looking to take advantage of these openings.

At an event this week in Washington, DC, Uber’s CEO Dara Khosrowshahi announced a number of new initiatives and partnerships, reinforcing the company’s strategy of expanding beyond its core business as a ride-hailing service.

Its most recent actions include:

  • Uber acquired JUMP Bikes to bring dockless bike-sharing to its app.
  • Uber Rent will partner with Getaround, a peer-to-peer carsharing service that allows users to rent cars by the hour in situations when ridesharing is not the ideal option.
  • Uber is partnering with Masabi, a mobile ticketing service for public transport agencies, to incorporate mobile fare payment in the app for public transit.
  • Uber Movement, which provides anonymized data, is expanding to 12 new cities around the world to help city planners find ways to fix transportation and curbside problems.
  • Uber is partnering with Shared Streets to improve curbside management to allow for easier use of shared mobility.

All of these partnerships are part of Uber’s strategy to address issues of congestion, environmental impacts, and accessible mobility in cities. Crucially, they will ideally lead to declining car ownership in urban areas. “As we think about the solution for urban mobility,” said Khosrowshahi. “We have to have a solution for car ownership and ensure that… living in a city does not require a car.”

Integrating public transit, car and bike sharing, data sharing, and curbside management into its selections on its app allows Uber move toward its goal of going beyond ridesharing while also providing consumers with more choices. Washington D.C., where Uber rolled out these initiatives, will be one of the testing grounds.

Uber’s strategy is to complement existing systems as it builds its new projects and works with cities for the long term to solve transportation problems, provide choices for consumers, and bolster access for the underserved.

Uber’s strategy is to complement existing systems as it builds its new projects and works with cities for the long term to solve transportation problems, provide choices for consumers, and bolster access for the underserved. However, as Uber becomes more intertwined with urban life, it will face criticisms and disputes with local officials.

It is already facing disagreements. At the event on Wednesday, Khosrowshahi was on a panel with Washington Mayor Muriel Bowser. In their discussion, both generally agreed on the need to reduce gridlock and work together to provide more mobility access to more of the city’s citizens. “We want to protect choice,” Bowser said, highlighting the range of options in the city, including the Metro, buses, bike-sharing, and ridesharing. “We want our residents to have the best choices possible.”

However, they did not fully agree on Bowser’s proposal to tax ride-hailing companies to raise money for the city’s beleaguered Metro system. “What we want to make sure is that you’re not taxing one form of shared transportation for another form of transportation,” Khosrowshahi said, arguing in favor of shared services. “We are in this to promote shared transportation in general. We want to make sure that proposals like this are not unconstructive to that goal.”

“What we want to make sure is that you’re not taxing one form of shared transportation for another form of transportation.”

Bowser’s proposal would increase ride-hailing companies’ taxes from one percent to 4.75 percent to pay for approximately 10 percent of DC’s portion of annual funding for Metro. This follows New York City’s recent introduction of congestion fees for taxis and ride-hailing services to help pay for fixes to the city’s subway system. Cities all across the country are seeing falling transit ridership, which some say is the result of the growing popularity of services such as Uber and Lyft.

Khosrowshahi is not against paying back to the cities; it’s just that in order to incentivize people to use pool services—which could effectively reduce congestion—companies have to significantly reduce their rates. That, in turn, makes the extra taxation more burdensome. “We are having to discount very aggressively, much more so that you would think, shared ride and Express Pool rides to get people to want to try this new mode of transportation,” he said. “It requires sustained investment, it requires big investments, and it’s something we’re very much behind.”

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