Urban transport: is flat rate the future?
Uber is experimenting with a flat rate service in Manhattan: unlimited Uber Pool transportation for one month for $200.
The price is not intended to attract those who use public transport as a rule, but instead those who typically use a combination of taxi and their own car, and who might find the price is right when compared to paying fuel, parking and occasional taxis.
The company has experimented in Manhattan, with other types of flat rates associated with individual trips, setting a $5 price for each trip during peak hours and also linking with their Uber Pool share-ride service. The service has so far been considered a success.
On the other side of the country, in San Francisco, Google is experimenting with similar shared services through Waze Rider, which allows users to find other passengers to join them for a set, %0.54 per mile fee, not intended to make a profit, but to share the cost.
I’ve long been interested in flat rate fees. When we decide to pay a given amount in exchange for unlimited use, a psychological effect comes in to play that makes us want to make as efficient as possible a use of the service, so as to feel that the payment has been worthwhile. So somebody who pays for Amazon Premium tends to buy a significant amount of their purchases from Amazon, seeing the flat fee paid for delivery as being reduced by a large number of purchases, making them feel they’ve made a smart choice (in the case of the United States, that joins the unlimited access to other stuff, such as music, television series or books).
How can flat rate affect how we move around in cities? It’s easy to see how somebody who has paid the Uber Pool flat rate to stop using taxis, and moving over to using the product to move around their city, especially if there are no delays and compares favorably to using a taxi, as seems to be the case. Taxis will find it hard to compete, since there is no simple way to coordinate a comparable service. Similarly, it is conceivable that, in cities where there is competition (Lyft in New York, Cabify in Madrid, etc.), users who sign up for the flat rate automatically drop competitors, creating a skewed market that could give some advantage to the pioneer.
The flat rate model already exists in many cities, in public transport. Monthly or even yearly travel cards are a deterrent to using private vehicles, but do not cover all demand. Could flat rates for private transport have the same effect?
More efficient use of private vehicles seems like a good idea, offering a more flexible solution than public transport. Add to that options for travel from the outskirts of cities, such as Waze Rider, and we could be talking about a significant decrease in the number of daily trips in inefficient cars and therefore significantly reducing traffic.
Could all urban transport end up running along flat rate lines?
(En español, aquí)
