The taxi companies have for a while had rivals in the form of Lyft and Uber, the two ride-hailing companies offering swift transportation with spare-time workers that reach their customers via phone apps. Are these two rides going to be the future of transit? We’ll see.
There are many areas where bus lines pick up few passengers and therefore cost more to operate than they bring to the table. The Pinellas Suncoast Transit Authority, or PSTA, faced this problem for a long time and partnered with Uber to take care of passengers in areas with no bus lines by providing the company with subsidies and even going so far as to discontinue the buses that cost the region money. The idea was hailed as very beneficial to both the government and the workers stuck without transportation.
However, there were a few problems with the idea. The Tampa area had only two Uber rides a night in the first stage of the program and the company later accidentally inflated the number of passengers, making Tampa pay much more than it needed to in subsidies. Uber has also failed to become transparent regarding transportation data, which hinders the authorities in being certain about whether this service is truly the better alternative to buses. Despite this, the PSTA has renewed the contract with Uber for 2021.
Many states, like California, for instance, are trying to get more data from Uber and Lyft for the purposes of planning regulations involving traffic. The companies refused to give up their data and only deliver profit reports on an annual basis. They claim that this is to protect the privacy of drivers and passengers, though the critics are concerned that this is a move to prevent any unwanted regulations.
The Theory of the Future
While these companies were originally envisioned as cheap alternatives to taxi services, the companies are, as it seems, moving towards replacing public transit altogether with subscription, allowing them to take over business commutes for example. One of the problems for the companies lies in rural areas. While there are many people there that would gladly use their services, the mobile and internet coverage is abysmal and a large portion of the market remains untapped.
Furthermore, with the competition being what it is on the open market, Uber and Lyft have even stopped battling each other and trying to come up with a sustainable idea regarding pricing. This is because both companies have taken a financial hit over the years while trying to best each other. Now, however, they have expressed interest in the sustainability of their respective businesses.
At first glance, Uber and Lyft seem like amazing alternatives to buses, subways and, most of all, taxis. They are quick, their workers are part-time, and the ride-hailing is done via apps, which makes it efficient. However, while they may seem like proper candidates for public transit, both companies are facing financial losses and are forced to raise their prices to account for the market.
Furthermore, such growth of these companies and their influence on traffic has raised concerns with many local authorities which demand more information regarding the routes and profit. These regulations and prying could drastically change the dynamic of the services provided, so even if they do become the alternatives we wanted, they may soon be in the same position as the discontinued buses in Tampa.