What ridesharing actually is

It’s not what the media, city officials, or ‘rideshare’ companies tend to think it is. But it’s awesome

Jun 25, 2014 · 7 min read

Taxi-hailing apps have become controversial. Like hand-wringing, subpoena-serving, rock-slinging, 10,000-car-protest controversial. “Ride-sharing” companies have been widely attacked and praised, accused of bypassing laws as they turn non-professionals into taxi drivers who can be dispatched with a few clicks. The controversy has raised critical questions for the “sharing economy” around issues like labor, liability, and trust.

But strangely, somewhere along the way, the meaning of ridesharing itself got lost.

Words are misused all the time, and language evolves of course. But the misunderstanding around “ridesharing” is particularly unfortunate considering how valuable we think ridesharing can be, and what stands to be lost if journalists, Silicon Valley, politicians and others get it wrong.

“Ridesharing” has become a favorite term in the media, from the New York Times to TechCrunch, from the Associated Press to the New Yorker. (Aiming for more nuance, some journalists will refer to so-called ‘ridesharing’” apps.) More worrisome, the term is also being misused by lawmakers as they craft laws that will shape the future of urban transportation, and by companies as they disrupt the status quo, in many cases for the better.

But this disruption isn’t really about sharing. Though the taxi industry is inherently a ‘shared’ industry, the controversy is not about sharing; it’s about new ways of dispatching taxis. On one side, it’s about the old guard of the taxi industry girding itself from innovation and disruption; on the other, it’s about how the disruptors are in some cases doing their disrupting by side-stepping laws.

At Bandwagon, we think ridesharing means something different, and it’s a definition that’s actually quite common within the transportation arena: ridesharing is sharing your ride with another passenger who is going your way.

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According to last year’s federal transportation bill (excerpted here) ridesharing means offering the use of seats in your own car to other passengers along your route on a cost-reimbursement basis only. Like most things we share, ridesharing brings benefits to riders (saved money and time, due to HOV lanes, for instance) and to our communities (reduced pollution and congestion).

That’s what ridesharing is. But that’s not quite the same as dispatching and paying a driver to pick you up and take you somewhere, be it by raising your hand, calling a dispatcher, or using one of dozens of apps. This is hailing a taxi.

In general, taxis are a shared resource and part of a smart urban transport network. Taxis include luxury cars driven by licensed drivers who are dispatched by app and peer-to-peer rides driven by amateurs in their own cars. These dispatched vehicles fill in gaps in public transportation and bolster it too, as David King, a Columbia University professor, has observed in his research on what he calls “asymmetrical mode-share.” All in all, taxis enable us city-dwellers to give up car ownership for a transportation network that’s more affordable, efficient and better for our cities.

Still, app-dispatched taxis have become “rideshares,” even though they operate just like taxis, and they aren’t doing any more or less sharing than any other taxi does.

How, then, did the term “ridesharing” come to describe an app-dispatched taxi cab? It might have been because of California law: unlike taxis, drivers who are “ridesharing” by giving people lifts to places they were already going were not subject to taxi rules.

By branding the services as “ridesharing”—or at least accepting the term and using it to lobby regulators—these companies found a new way into a market from which they would otherwise be prohibited if they weren’t using that umbrella term. Now California has a new phrase, “transportation network companies,” or TNCs, a term that doesn’t exactly roll off the tongue. Meanwhile, the “ridesharing” moniker has stuck.

Real ridesharing is different. It’s a way to better use the vehicles that we have now rather than adding new cars to already crowded roads. It’s a way of getting people where they need to go cheaply and quickly, when public transit isn’t an option or when cabs are in short supply. Ridesharing is a way of improving access to the market by making taxi cabs cheaper to take, especially at high demand times, not more expensive.

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Real-time route matchmaking—that’s the stuff of ridesharing. Illustration by Brendan Dalton.

At Bandwagon, we’re working on real, real-time ridesharing every day. We enable passengers to book rides and get matched with other passengers in licensed taxis, car services and private vehicles. Passengers who share taxis benefit from increased capacity and accessibility, while drivers increase earning capacity and cities reduce congestion. And instead of raising prices when demand is high, real ridesharing enables Bandwagon to lower prices.

New York is an especially good place for ridesharing in taxis: as a study last year found, nearly 80 percent of the city’s taxi trips could have been shared, assuming that passengers were willing to travel no more than three minutes out of their way, and were willing to share—and, relatedly, that there was a good way to connect them.

There’s a lot of potential for ridesharing in the U.S. It’s estimated that about 76 percent of American drivers go to work alone, which means that most days, most of us who drive are traveling with at least three perfectly good empty seats next to us. “If more of us would simply pile into cars together — on our way to work, or school, or wherever — we could reduce congestion, emissions, even the need for parking,” Emily Badger wrote in April in the Washington Post. “And what’s not to like about that?”

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Taxi rides between 15th Street and Midtown over a year in New York City demonstrate the potential for shared rides. (Via Hubcab / MIT SENSEable City Lab)

One thing we can all agree on: in general, taxis are an important part of a city’s transportation system. They improve the way we use private vehicles. If there are going to be cars in cities, taxis are a good compromise. Their utilization rates are drastically higher than private cars, in some cases 1900 percent higher. Think about the amount of time your typical urban car is used versus the amount of time it’s parked curbside, taking up valuable space (in between street cleanings, let’s be honest), and then think about how taxis are used. All the new taxi apps—us included—are hopefully helping make it easier to “use” taxis and hopefully making taxis better too.

Taxi regulations may serve an incumbent industry, but they also exist to keep the taxi “system” working: they prevent a glut of taxis on already crowded roads, ensure that the people driving those taxis are licensed and insured, and help cities maintain a thriving fleet of trained drivers who can make a reasonable wage.

Laws helped turn the taxi business from a shady industry—what the Times in 1923 called a “yellow peril”—into a powerful, reputable part of the city’s public transit infrastructure. But given how many taxis on the road are currently underutilized (what taxi drivers call “dead head”) and given how centralized some of the control over the industry can be, innovation to taxis and their regulation is going to be a crucial part of our future cities.

Part of that innovation includes finding ways to make better use of some of the empty seats in cars and taxis. Ridesharing is awesome for cities. It can reduce congestion, expand public space, increase our ability to live dense and rich lives without totally screwing the one planet we have, and without unleveling the playing field.

There are a lot of amazing advances being made in the “sharing economy,” however you want to define the term. But we can’t properly realize the promises of this new frontier (or manage its risks) if it’s misunderstood. We’re being sticklers about the terms because we know that sharing resources can improve our cities, just as it already has. We know that connecting riders to share rides has the power to undo much of the damage that excess vehicle trips have done to our public space and social fabric.

Cities around the world and all kinds of companies under the “sharing” umbrella may continue to fight over the course of innovation—or, in the spirit of sharing, they will choose to collaborate. We’re rooting for the latter. Along the way, we don’t want a buzzword to ruin what we think is a positive kind of disruption to our cities’ transportation.

By Alex Pasternack and David Mahfouda. Alex is researcher at and co-founder of Bandwagon with David, the company’s CEO.

This story was adapted from an essay at the Bandwagon blog.

Updated June 26 to more clearly define the sharing of taxicabs.

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