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7:22

Uber Finally Admits It’s Taking on Buses

It’s not the only company looking to control urban transportation

Photo by Josh Wilburne on Unsplash

Uber’s transportation ambitions have steadily grown since its inception. It started by taking on black cars, then challenged taxis before getting into food delivery and launching uberPOOL, which increasingly came to resemble a fixed-route bus service. But Uber diehards have insisted that the company was just innovating on its taxi model, not going after transit.

Of course, anyone paying even reasonably close attention to the company who hadn’t fallen for its brilliant PR schemes could see that wasn’t the case. From offering uberPOOL fares designed to undercut transit and announcing the launch of a bus service in Egypt, Uber’s intentions have been clear for a while — and now its CEO has admitted it.

At a recent conference, Dara Khosrowshahi, who replaced co-founder Travis Kalanick as CEO in August 2017, told attendees, “I want to run the bus systems for a city. I want you to be able to take an Uber and get into the subway… get out and have an Uber waiting for you.” He also compared the role of cars in Uber’s business model to that of books in Amazon’s: the first step to expanding into multiple other markets. With that information, do you still not believe Uber is going after transit?

Uber Can’t be Trusted to Operate Transit

Becoming a transit operator is not simply the ambition of a new Uber CEO, but has been part of the company’s strategy for at least a couple of years. It already has agreements with a number of smaller cities in the United States and Canada to subsidize ride-hailing trips, occasionally with conditions attached. But there’s good reason to be worried about Uber’s intentions and the service it would ultimately deliver.

That’s not to say that Uber provides a bad service — many of its users absolutely love it — but that doesn’t mean the service will be an equitable one. Uber’s current services don’t tend to serve disabled passengers very well, and when it has made agreements with cities, the modicum of data it has provided has had to be kept private. There are also conerns of equity with regard to low-income and elderly passengers, who may not be able to afford or know how to use a smartphone to access the Uber app.

There’s also the question of monopoly. Uber’s business model, like many in Silicon Valley, is built around the premise of driving out competition and achieving dominance in its market. This is incompatible with the existence of public transit, especially since Uber is now being clear that it wants to directly challenge those systems, and we need to consider whether that’s really what we want on our streets. Remember that a growing number of studies are show that Uber’s competition with taxi companies has already made congestion worse, increased vehicle travel times, and is eating into transit ridership.

In order to build that monopoly, Uber has been offering unsustainably low fares to entice riders to switch to its service. But given that that the company lost $2.8 billion in 2016 and a whopping $4.5 billion in 2017, it’s clear that those prices will have to rise in order to make its business model sustainable; some users report that prices have already started going up.

Supporters of the company will say that driverless vehicles are the solution to Uber’s woes because they will eliminate the cost of the driver, but they won’t come soon enough. Not only are most major companies working on autonomous tech pushing their timelines years down the road, but Uber’s tech is among the worst on the market and even its CEO admits that when such vehicles go into operation, they’ll be very limited.

That leads us to another big concern: if Uber’s business model is fundamentally unsustainable, why should it be trusted to run services the public will depend on when those with low ridership could later be cut or prices could be increased once shareholders lose their patience waiting for returns or Uber’s cash reserves begin to dwindle? That could suggest another motivation to compete with public transit: to try to get more public subsidy.

Tech Moves Into Transportation

Uber isn’t the only tech company looking to move into transportation and potentially try to privatize aspects of public activities. Lyft has also been pitching its “open platform,” which was initially positioned as an open standard for autonomous vehicles, making it easier for them to provide ride-hailing services, but its scope has since grown.

The ambition of the project now seems to encompass an improved version of the transport planning aspect of Google Maps. Instead of just self-driving cars, it also wants to integrate data from public transit and bike shares to give users a fuller picture of the transportation options available to them, though the ultimate goal is likely to push more people into private ride hailing.

Sidewalk Labs, Google’s sister company focused on using technology to privatize aspects of major cities, also announced that it will be spinning off a new company called Coord, though it’s clearly a data play. Coord wants to bring together the data from all transportation services — ride hailing, public transportation, bike share — and combine it with its existing data on tolls and parking.

There are two aspects to the business plan: to sell the collected data to companies to integrate in trip-planning services (like what Lyft wants to offer and Google Maps already does) and to increase the data Google holds on major cities. But given that local governments have had such a hard time getting ride-hailing companies to hand over their trip data, why would they give it to Google? And if they’re going to give it to anyone, shouldn’t it go to the local government, which could then make that data publicly available, possibly even in a similar model as what Coord has planned?

Fifteen tech companies offering some version of ride-, car-, or bike-sharing services recently signed onto ten principles for the creation of liveable cities. The proposal to ban private cars, which would eliminate one of their main competitors, aside, on principle was a commitment to sharing their data, yet their actions don’t show the same willingness. It seems much more likely that these principles will be treated more as guidelines, and the sharing of data is unlikely to come anytime soon.

Be Wary of Tech’s Intentions

When tech companies look at cities, above all else, they see a business opportunity. They don’t observe the simple joys of urban life and ignore the aspects of the city that tech workers wouldn’t usually partake in — at least until they bring in the PR department to sell their schemes — because their focus is on the activities they can track, take over, and from which they can eventually profit.

If nothing else, it’s good to see Uber’s CEO admit that the company wants to take on and replace public transit, because that means no one can deny it any longer and we can have a real discussion about what the means for our cities and whether Uber really has a place in providing such crucial services.

The future of our world is urban, and the future of our cities relies on great transit and robust support for walking and cycling. Uber’s ride-hailing service made the auto experience worse for millions of people by increasing congestion and travel times; is there any reason to believe the same won’t happen if it makes a more concerted push into transit?