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January 22 2016

Why Not Try Competition?

Patrice J. Lee

Mayor Bill de Blasio has been an opponent of ridesharing in the Big Apple – not surprisingly. He sided with the taxi cabs against new competition on the roads. However, a study he commissioned refutes his own assertion that ridesharing companies such as Uber and Lyft are making New York City roads more congested. Let’s see if he admits he was wrong.

In an op-ed last July, the mayor claimed that more than 2,000 new for-hire vehicles were adding to the already congested Manhattan roads. He called for a “data-driven approach, guided by detailed study” to develop a comprehensive, long-term strategy for incorporating ridesharing into the transportation options for travelers.

The $2 million study was just released and the results are probably not what de Blasio was expecting. Ridesharing companies don’t significantly add to city congestion. Furthermore, it recommended against enacting the cap on ridesharing expansion that de Blasio proposed.

According to the report, app-based services had contributed to overall congestion, but did not drive the recent rise in congestion in the business district of Manhattan. The rise in rides offset the decrease in yellow taxi trips. The increase in traffic was due to population growth, more tourists, and an increase in deliveries and construction. These are economic stimuli for the city.
CNBC reports:
 

"We are pleased to release the findings of our study and look forward to continued work with the City Council and industry partners to create comprehensive proposals to address accessibility, consumer and employee safety, mobility and securing support for our public transit system," mayoral spokesman Peter Kadushin said is a statement.

"We are supportive of several of the proposals presented today, especially efforts to empower drivers by giving them more freedom to partner with companies across the industry," said Josh Mohrer, Uber New York general manager.

"We will be reviewing the policy ideas and hope to work with the de Blasio administration and the City Council on implementing many of them," said Mohrer in an email to CNBC.



Congestion concerns related to Uber and peers have been "knee jerk," according to one industry watcher.

"I've failed to see really clear evidence that on the whole this [ride hailing industry] has a negative impact for the stakeholders involved — consumers, entrepreneurs and the cities," said Tanner Hackett, co-founder of The On Demand Economy, a platform that focuses on the sharing economy. "The economic gains and net benefits far outweighs any impact of congestion."
 

According to the New York Times, not everyone accepts the study:
 

Charles Komanoff, a transportation analyst, called the study “unbelievably flimsy” and questioned the research model the city used. He said he expected the report would be more thorough, with links to spreadsheets, and he urged the city to provide more data.

“It’s as if the new ‘Star Wars’ movie everyone was waiting for was just a two-minute animation,” Mr. Komanoff said of the study.
 

 

It appears that an advocate for the disabled is now joining the fray against ride sharing:
 

James Weisman, president of the United Spinal Association, criticized the report and the City Council legislation, arguing that they did not fully address accessibility.

“The devil is in the details, and there aren’t any in what was released today,” he said. “We urge the city to act swiftly on its rhetoric because the consequences of not acting will result in even fewer transportation options for wheelchair users and perpetuate Uber’s discriminatory practices.”


We can sympathize with taxi drivers who have hard and sometimes dangerous jobs and are now confronted with strong competition. But the way to meet competition is to find new ways to make your own product or service more attractive. The mayor's apparent attempt to help the cab industry fight in other way--i.e, by getting their competitor banned because of congestion--appears to have flubbed.  That should be a lesson.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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