Eight months ago – in what may now seem like a whole different universe – many transportation planners were focused on a set of technological and demographic trends that were changing the face of our industry. By changing transportation paradigms, shared rides and vehicles were going to solve congestion issues while improving access and mobility for everyone. Dense, mixed-use areas were becoming ever more desirable, resulting in gentrification and housing affordability crises in major cities across the country. Vehicle manufacturers and tech companies were promising automated vehicles that could drive you to work. Traffic engineers were figuring out how to provide access to the curb for deliveries and passenger drop-offs while maintaining traffic flow. And transit agencies were redesigning their bus systems in order to improve efficiencies and lure the ever-elusive choice rider.
These trends and the technologies that enable them were thought of as disruptors: upending the transportation system as we knew it, and ushering in a better, more sustainable, equitable and less congested future…depending on who you asked. Predictions about what this future would look like and how we could prepare for it abounded – I should know, I developed some of them myself. Futures in which cars blended seamlessly into an equitable and green transportation system stood in contrast to visions of increased congestion, exurban sprawl, and an evil, all-knowing SkyNet (Terminator really does get brought up more than you’d expect in these types of discussions).
Enter 2020, and the original disruptor: pandemic.
Every one of us knows how the global COVID-19 pandemic has disrupted our lives in ways great and small. And as much as we all want things to go back to normal, the longer the pandemic stays with us, the more it will permanently change our lives, and how our futures unfold.
Over the next few weeks, I will share some insights on some of the main transportation trends that transportation planners were tracking before the crisis, and how COVID-19 may have impacted their trajectories moving forward. To start the discussion, I examined one of the service types that has been impacted the most by the pandemic: Ride-hailing.
Ride-hailing
With a wide range of names, including Transportation Network Companies (TNCs), ride-hailing, and ride-sourcing, these services are most recognizable by the names Uber and Lyft, although other services, including some traditional taxis fit this mold as well. Ride-hailing started the disruption revolution in transportation, beginning to expand in 2011 and growing exponentially across the country and across the world. By linking drivers with a car to people with somewhere to go, ride-hailing apps offered a convenient and often cheap door-to-door travel alternative to public transit or driving yourself.
Even before the pandemic hit, there were questions about the long-term sustainability of the ride-hailing business model, as new regulations, price increases, and annual losses in the billions were starting to slow ride-hailing’s meteoric rise. New partnerships with cities and transit agencies, a focus on shared rides, and an eventual transition to automated vehicles were among the innovations being pursued as solutions to around cost and the impacts to communities.
The severe drop in demand driven by pandemic-related stay-at-home orders (estimated at around 80% at the peak in April) caused the companies to take drastic measures to cut costs. Uber and Lyft laid off significant portions of their workforce (25 and 17 percent, respectively) by mid-May. This dramatically understates the impacts to those who work in this industry, however, as individual drivers are not TNC employees, but independent contractors. One survey showed that half of Uber drivers in New York City were hit so hard by the shutdowns that they were seeking help accessing food in May.
Demand is starting to increase again as the economy re-starts, and many travelers are likely to see ride-hailing as a safer and more-socially distant option compared to public transit. But those who own a car are likely to think twice before using a service that requires them to get into a car with a driver whom they don’t know. Further, implementation of new cleaning, safety, and sanitation procedures could increase the cost of a ride, reducing their competitiveness. Forecasts coming out of the pandemic seem to suggest a potential increase in their use during peak periods as an alternative to crowded transit – but a decrease in use for discretionary trips, one of their major markets before the pandemic. The TNCs seem to be pursuing this strategy, at least in the DC area (my neck of the woods). Uber just last week started sending me ads about the safety of commuting with them once I go back to the office. Last week Uber CEO predicted that UberEats will be as big a part of Ubers business as their ride-hailing service in a post-pandemic world. Ride-hailing companies are doing whatever they can to survive the crisis.
Ride-hailing companies are heavily reliant on the gig economy and their assertion that drivers are contractors, not employees. This assertion was under assault before the pandemic, and exposure to the virus without health insurance may spark the kind of large-scale change that worker advocates have been hoping for. But in the meanwhile, the economic crisis that has come with the pandemic has resulted in massive unemployment, and many more people will be seeking work. Gas prices are low and with school and childcare needs making traditional work difficult for many, flexible gig work might be an attractive option for many in the coming months, even with lingering questions about safety
Hit hardest by the pandemic have been the shared ride-hailing options that operators and many transportation professionals touted as potential solutions to congestion and excess roadway and vehicle capacity. UberPool and LyftLine services were discontinued in March and seem unlikely to return in the near-term. So even if demand for ride-hailing rebounds, it will likely come with significant impacts in the form of congestion and emissions in our communities. But we’ll talk more about the pandemic’s impact on a number of shared-ride options in a later installment.
The key questions here: can the existing companies survive through the crisis, and how long will it take to restore consumer confidence and comfort with riding in someone else’s vehicle with a driver they don’t know? Share your thoughts in the comments.
Next time we’ll talk about potentially longer term disruptions to the development and introduction of connected and automated vehicles.