Earlier today we published a paper on the future of mobility in Spain. The full paper in English is pasted below.
THE SMARTPHONE REVOLUTION: BETTER TRANSPORTATION OPTIONS AND NEW OPPORTUNITIES FOR WORK
The smartphone really has changed the way we live — making the previously impossible, possible: the ability to share photos with family and friends in seconds; to stand in one store and compare prices in other stores across town; or to get driving directions wherever you are in the world. It’s why smartphones are fast becoming indispensable — people now spend as much as five hours a day on them, more than TV.
The switch from desktop to mobile — and the rise of the app economy — has happened incredibly quickly. Apple only launched its app store in 2008 and just six years ago an iPhone lacked the battery power for a service like Uber to function. Today well over 60 percent of all Internet traffic comes from mobile, and half of that is driven by apps. Unsurprisingly, PC sales are declining steeply — by as much as 10 percent year on year.
The impact of this smartphone-based app revolution is being felt in almost every industry: from communications and commerce to banking and entertainment. The urban transport has also experimented its own revolution caused by ridesharing apps, which allows riders to connect with drivers through the app by just pushing a button. Passengers no longer need to call and book, or stand on a street corner hoping a taxi will come along. Within minutes, you can get a ride wherever you are.
The ability to get from A to B at the touch of a button will have a profound impact on car ownership over time. Because when it’s that easy to get around, why own a car? Especially as cars sit idle more than 95 percent of the time. In fact we’re hearing a lot of anecdotal evidence in the U.S. about people no longer feeling the need to buy a car — or for families to own a second one.
New technology is by its very nature disruptive: not just for established industries, but for the people who work in them and their families. This is especially true at times of high unemployment. And app-based ride sharing is no different. But with progressive regulations that ensure essential safety and consumer protection standards are met it’s possible to increase choice for passengers and create new opportunities for all drivers, including taxi drivers. This document sets out:
- The benefits of ridesharing services such as Uber; and
- Our commitment to work with policymakers to create a new regulatory framework that can work for everyone — based on regulatory frameworks that already exist (and are working well) internationally.
There is no doubt we have made mistakes in Spain. But we are committed to working with policy makers to create a modern regulatory framework.
Increasing transportation access for all
Uber’s goal is to provide safe, reliable, affordable and convenient transport for everyone, everywhere within minutes — including to parts of cities that don’t have easy access to public transport today, or where taxis have historically been scarce. These transportation deserts are often the least well off neighborhoods.
- For example, a study commissioned by Uber with BOTEC Analysis, a research firm in the United States, found that in less well off neighborhoods of Los Angeles a ride with Uber cost half as much and arrived twice as quickly as a taxi.
- In Paris, seven percent of Uber trips are taken to economically disadvantaged areas, the same as the percentage of the population that lives there. The average wait time in these Parisian neighborhoods is within 30 seconds of the wait times in the city center.
- In London, the average wait time for a ride is just 3.6 minutes. This includes rides that are well outside the city center: Almost 30 percent of all Uber’s trips in London start in the outer boroughs. Rides to and from Hackney, for example, which is located in Zone 2 of the London Underground without any tube stops and poorly served by black cabs, have increased from three percent of all Uber trips in London in 2013 to nearly 12 percent this year.
In fact, Uber encourages the use of mass transport by providing a “last mile” linkage to mainline rail, underground stations and bus links. Uber data shows that a significant number of Uber trips start or end at public transport hubs. In Paris over 65 percent of Uber’s trips start or end within 200 meters of the Metro. For Vienna that number is 39 percent.
The introduction of ridesharing platforms has also encouraged taxis and minicab companies to improve their services. Taxi fleets around the world are now using “e-hail” apps to dispatch their taxis in a more efficient way. Researchers examining New York City taxi complaint data found that the number of complaints per taxi trip in New York has declined alongside the growth of Uber in that city. And looking at comparable data from Chicago, they found that certain complaints — driver willingness to turn on air conditioning, acceptance of credit cards, driver rudeness, and talking on cell phones — all seem to have as well.
Finally, Uber helps people make smarter decisions when it comes to safety. Moving people — the world’s most precious cargo — from A to B is a huge responsibility. While no means of transportation can ever be 100% safe, we believe that Uber’s technology enables us to improve safety before, during and after the ride in ways that other means of transportation cannot.
Before the ride begins
- Riders can start the Uber app from anywhere and wait safely for the car to arrive. So no standing on the street to hail a cab or walking around late at night to get to the bus stop.
- Uber shows riders the drivers first name, photo, license plate number and a picture of the vehicle before they get into the car — so they can check it is the right person.
- Riders can contact their driver — and vice versa — if there is any confusion about their pick-up via their mobile phone using technology that anonymizes the number.
- Uber requires drivers to undergo a rigorous pre-screening process, which includes a driving history review among other assessments.
During a ride
- Every Uber ride — anywhere in the world — has commercial liability insurance.
- Riders can easily share their ride details, including the specific route and estimated time of arrival, with friends or family.
- Riders can also see the route on the map in the app. The location is clearly marked so riders know where they are on their journey — and if they are on the right route.
- Uber uses GPS to keep a record of where a driver goes during the ride, creating accountability and a strong incentive for good behavior.
When the ride ends
- Riders and drivers to rate each other and provide feedback before booking or accepting another ride. Our safety team reviews this information and investigates any issues.
- If something happens while in the car, whether it’s a traffic accident or an altercation between rider and driver, our customer support staff are ready to respond 24 hours a day, seven days a week.
An economic engine for the twenty first century
On-demand platforms like Uber provide new options for people wanting work. They are more flexible — and give workers more control over their personal schedules — than traditional full-time or even part-time models. Providing this kind of flexibility is essential for the nearly ten million part-time workers in Europe who wish they had more work. In France, 22 percent of drivers were unemployed prior to driving with Uber, and 44 percent of those had been unemployed for at least a year. That number is even higher — at over 40 percent — in Cairo. And in London, 29 percent of drivers come from areas with unemployment rates over 10 percent.
Drivers with Uber decide where, when, and for how long to drive. They are free to turn off the app and stop working at any moment. In other words, their needs determine their work schedule — and nothing else. Nearly 90 percent of US drivers say this is a major reason to work with Uber: it’s about being their own boss.
It’s easy to see why. People can choose to work for a couple of months to pay the bills as they transition their career or for just a few hours to fund a kid’s soccer class. In the U.S. 50 percent of people drive less than 10 hours each week — that’s not even what we think of as a traditional part-time job. What’s less obvious is that the people who spend most of their time driving with Uber seem to value this flexibility and independence as much the ones driving just a few hours each week. That’s because a typical 40-hour job rarely offers the ability to visit an elderly parent, go to a job interview, or tend to family emergencies without asking for permission beforehand. In cities where drivers need an individual license, like New York or London, drivers tend to work a full week using the Uber platform. But even in these cities, drivers really value the increased flexibility and independence Uber offers rather than the shift approach used by many taxi companies.
Uber is an engine for economic growth in each city where we operate. Hundreds of thousands of drivers use Uber to help generate their income, including 20,000 in London; 10,000 in Paris; 30,000 in New York; 40,000 in Los Angeles; and 57,000 in Chengdu, China. And each of those drivers takes home the lion’s share of each fare, so the money stays in the local economy.
Enabling people to get from A to B reliably and affordably also benefits small businesses throughout a city. Because riders know they can rely on Uber for a journey back home no matter where they’re going, the platform encourages people to travel more widely throughout their city, visiting a broader range of neighborhoods — and supporting those small businesses that cannot afford the rent in prime central locations. In Chicago, for example, one in three trips on Uber last year began or ended at a local small business.
Many cities seek to limit the number of private hire licenses or taxi medallions. This has a number of unintended, negative consequences.
As demand grows (due to economic or population growth) prices or waiting times — or both — rise because the supply of cars does not increase. This is bad for passengers. In New York City, for example, the total number of trips taken (including taxi) grew by 20 percent after Uber launched in the city. And in Portland, Oregon, after the launch of Uber and its competitor Lyft, the number of trips across all services, including taxi, doubled.
In Spain, the restricted number of PHV licences has not kept pace with population growth, and similar to Portland or New York there may an unmet demand for services as a result. The total number of taxi licenses has been stable for twenty years, while the populations of cities like Madrid have been growing at a steady clip, with nearly 6.5 million people living in the Madrid metropolitan area today.
Limiting the supply of cars is also bad for drivers. In New York or Chicago, taxi drivers start their working day in debt because they have to “lease” the medallion from its owners for the privilege of driving for a 12-hour shift. But drivers using Uber take home the lion’s share of every single fare, in other words they earn money from the very first trip each day. In addition, restrictions on licenses mean that people who want to drive and need work cannot. We estimate that the modernization of the VTC regulation may generate over 33,000 new jobs in Spain, offering a real solution to the unemployed, and reducing costs for the Government by as much as €650 million per year.
In other words the arrival of services like Uber benefits everyone — passengers, competitors and drivers.
Building better cities for tomorrow
Uber can also help deal with the problem of drink driving. California, for example, experienced a six percent decline in alcohol-related crashes involving under-30 year olds following the launch of uberX. In London we’ve seen that the use of Uber peaks late at night as pubs close, which also happens to be when black cabs are least available. In fact in most cities in the world Uber’s rush hour is closing time.
Apps like Uber can also help reduce congestion in cities overtime. So many people now use Uber in places like San Francisco and Paris that we see a ton of passengers wanting to get to almost exactly the same place at the exact same time. Our uberPOOL service makes it possible for people going the same direction to share a car — which is great for passengers because it reduces the cost of a trip and great for cities because it helps reduce congestion over time.
Over time these trips become a perpetual ride: a driver picks up one person, then another, then drops one of them off, then picks up another. It’s on-demand, hyper-convenient and more affordable because the cost of the trip is shared. That makes it less expensive than owning a car and a real game-changer for cities. Because by providing a convenient, cost effective alternative to ownership we can start to reduce the total number of cars. Cars are one of the most expensive assets people buy and they sit idle 96 percent of the time.
The challenge in Spain today
Governments around the world are increasingly in agreement that transport regulations need updating. It’s why nearly 70 states and cities in the United States have passed modern ridesharing regulations in the last two years. And why the Philippines, Mexico City, the surrounding State of Mexico, the State of Puebla and the Australian Capital Territory have all followed suit. Vilnius, the capital of Lithuania, recently became the first city in the European Union to embrace the idea. In Spain, both national and regional competition authorities have explicitly acknowledged the need for reform.
Uber is committed to a new approach in Spain — working in partnership with government and others to update the rules for licensing vehicles with drivers in Spain (VTC). Today, the rules only allow one VTC license for every 30 taxi licenses, and all VTC operators must have a fleet of at least seven vehicles.
Regulations that artificially restrict the number of drivers have two consequences. One is obvious: people who want to work as drivers aren’t able to, even if there is demand for additional rides. The other is less intuitive: the opportunities to reduce car ownership and therefore congestion over time become fewer. This is because people will only give up their cars IF they know that there’s always a ride minutes away. But when the supply of licences is restricted the price of a ride will always be higher — and or/waiting times longer.
It’s these kinds of artificial barriers that have prevented carpooling, which has been talked about for decades, from taking off. In addition, if the government wants to encourage people who regularly drive — for example because there’s no public transport available — to share their ride then it will need to be easier for those drivers to apply to use apps like Uber.
Moving toward a progressive regime
We believe that a modern licensing regime based on the following common sense regulations could work well Spain — helping to increase mobility and flexible work in the short term.
- The drivers who decide to use ridesharing platforms to offer their transportation services must have a valid license before they can operate.
- To get started drivers must submit an application to the ridesharing company. This enables the company to check a driver’s age, driving license, driving history, vehicle registration, auto insurance and criminal record. It’s important to note that the ability to do background checks — and the depth of those checks — varies widely from country to country.
- Ridesharing companies cannot accept drivers whose records show that they do not meet the required standards (e.g. because they are too young, their vehicle is too old or they have an issue with their criminal record).
- As per the above, drivers must undergo a rigorous pre-screening process.
- The ridesharing company must retain driver trip records for a required period, to ensure that law enforcement can access information when necessary to ensure public safety.
Consumer Protection and Competition Requirements
- Drivers are not allowed to solicit or accept street hails.
- Ridesharing companies must be transparent about how fares are calculated. Customers must be able to get an accurate fare estimate before booking a trip and a receipt when the trip ends.
- Ridesharing companies must adopt a policy of nondiscrimination for drivers and riders.
- Drivers should be free to use multiple different ridesharing platforms.