When Uber and Lyft first entered the market, offering a ride-hailing service that would come to include tens of thousands of amateur drivers, most major U.S. cities had been tightly controlling the competition. New York City allowed exactly 13,637 licenses for taxicabs. Chicago permitted 6,904, Boston 1,825 and Philadelphia 1,600.
These numbers weren’t entirely arbitrary. Cities spent decades trying to set numbers that would keep drivers and passengers satisfied and streets safe. But the exercise was always a fraught one. New York City now faces an even more complex version of it after the passage of legislation this week that will temporarily cap services like Uber and Lyft.
The city plans to halt new licenses for a year while it studies the impact of ride-hailing and establishes new rules for driver pay. In doing so, it renews an old question: What’s the right number of vehicles anyway?
The answer isn’t easy because it depends largely on which problem officials are trying to solve. Do they want to minimize wait times for passengers or maximize wages for drivers? Do they want the best experience for individual users, or the best outcome for the city — including for residents who use city streets but never ride taxis or Uber at all?
All of these goals are in tension. If you’re a ride-hailing passenger, you may want cars to materialize at your doorstep instantaneously. But a system that can do something like that probably also has a lot of empty cars waiting around, contributing to congestion and lowering driver wages.
The right number then is best thought of as more of a sweet spot in the trade-offs.
“There isn’t a right number — you want to get several right relationships here,” said Bruce Schaller, a former deputy commissioner in the New York City Department of Transportation and a longtime consultant. For years, he had this same conversation with cities eager to optimize their taxi fleets.
Cities began capping taxis in the 1930s, and many that tried deregulating the industry in the 1970s ultimately decided they needed to impose caps again.
San Francisco notoriously never got this balance right: By the dawn of the Uber era, it had about 1,700 licensed cabs.
“It is no accident that Uber and Lyft began in San Francisco,” Schaller said. “It wasn’t just because it was Silicon Valley. It was because they had seriously too few taxicabs.”
He and other researchers suggest the best way to capture these trade-offs is to focus on measures of how heavily taxis or ride-share fleets are utilized — how much time or how many miles they spend with a passenger in tow. Systems that rack up a lot of unproductive travel essentially waste street space, and they’re less profitable for drivers.
Alejandro Henao, a postdoctoral researcher with the National Renewable Energy Laboratory, illustrates what this looks like using data from RideAustin, a nonprofit ride-hailing service in Austin, Texas. When drivers don’t receive enough trip requests, they spend a lot of miles driving around without any passengers, contributing to congestion. As they receive more requests, those wasted miles decline.
Henao’s analysis suggests the optimal target, at least in Austin, occurs when drivers average 3.4 trip requests per hour. That translates to having about 30 drivers for every 100 trip requests there. Beyond that point, adding more trips per driver doesn’t save drivers — or the city — much in empty miles traveled with no passenger in the back. Beyond that point, the system would likely have too many passengers and not enough drivers, and passenger wait times would increase.
These numbers would differ in other cities or circumstances, including if you looked at only, say, downtown Austin. But the principle is the same anywhere, Henao argues: Cities should neither cap these services nor welcome a free-for-all. They should try to optimize the number of drivers to the amount of demand — or nudge companies to do that more effectively, by requiring them to share their utilization rates. Cities could withhold licenses from companies with low utilization, for instance, and reward those with high rates.
In New York, politicians have been reacting to the suspicion that ride-hailing companies have goosed the number of cars on the road to minimize wait times for passengers, at the expense of driver wages and public streets.
“The Uber business model,” Mayor Bill de Blasio said, is “flood the market with as many cars and drivers as possible.”
Uber and Lyft counter that they’re motivated to balance all of these interests — and certainly more so than the taxi industry has been. Both companies support an alternative policy in congestion pricing, a strategy that would manage the supply of all vehicles in crowded parts of Manhattan, rather than targeting the ride-hailing industry.
“Picking a number of vehicles is not the best way to serve residents across entire cities — just look at yellow taxis in NYC who do 92 percent of their trips in Manhattan,” Uber spokesman Josh Gold said in a statement. “Ultimately, we have a natural incentive to keep drivers busy; otherwise they won’t choose to continue driving with us.”
Capping ride-sharing vehicles won’t ease congestion, said Adrian Durbin, Lyft’s director of communications. And it will make it only harder for companies like Lyft to nudge more passengers into shared rides if they’re not able to match passengers efficiently. He points to people who live in neighborhoods that aren’t well served by transit or who need late-night rides.
“Those are the people who are going to be most harmed by caps or cuts to ride-sharing,” he said. “We weren’t just putting drivers on the road for the sake of it. It’s not good for our business or Uber’s to have drivers out there whose cars are empty most of the time.”
Lyft and Uber have not released data on their utilization in New York, although other provisions of the city’s legislation could require them to do so. That makes it harder to repeat Henao’s analysis with trip data in New York. But Schaller has made his own calculations. Cars for the two companies were used by passengers about 68 percent of the time in New York, excluding airport rides, he estimates for June 2017. Ideally, that number could be as high as 80 percent, he said.
Yellow cabs are less productive because they don’t use the same sophisticated dispatch system to pair drivers and riders citywide. For them, Schaller suggests, the sweet spot may be more like 55 percent in New York, and lower in less dense cities.
Research published this summer in the journal Nature by researchers at MIT suggests another possibility: If yellow cabs in New York could centrally optimize routes — more akin to what Uber and Lyft do — they could deliver the same number of rides with 30 to 40 percent fewer vehicles.
Technology has made it easier to identify and manage the optimal supply, far more so than when cities began capping taxis 80 years ago. But cities have to be clear what they’re optimizing for.
And in none of these proposed calculations would the city maximize the interests of the group financially hurt the most by Uber’s rise: taxi medallion owners, some of them immigrant drivers, who’ve seen the value of their assets plummet.
That is a trade-off, too.
Uber and Lyft Drivers in Chicago Will Hold Rally to Protest Abuse and Low Wages
Uber and Lyft drivers in Chicago will rally at O’Hare airport Monday in protest of abuses they have faced from riders as well as the low wages they receive from their work, the Chicago Sun-Times reported.
Organizers with the group Chicago Rideshare Advocates are working to organize the thousands of drivers across the city to demand better pay and working conditions. Last week the group rallied outside City Hall with a banner that read, “Uber/Lyft Stop Abusing Workers/Cities.”
Mattia Nanfria, a 41-year-old ride-share driver who also organizes with Chicago Rideshare Advocates said she has been propositioned and attacked by riders. She said that after reporting having problems with some riders, Uber didn’t seem to do much to address the issue. “For all I know, they did nothing, which is a little disturbing,” she said.
To make matters worse, Nanfria said there are some weeks when she makes less than the city’s minimum $12 hourly wage. “The weeks where I’m clearing $10 to $12 an hour, that’s what I lose sleep over,” Nanfria told the Sun-Times.
Chicago city officials have considered following New York’s lead and putting a cap on the number of ride-share vehicles in the city, which has quadrupled to nearly 66,000 drivers in the last three years, according to the Chicago Tribune. The Chicago Rideshare Associates are on board with capping the number of drivers, along with increasing wages and drivers’ safety.
“Nobody wants to ban Uber and Lyft. Nobody wants that,” Eli Martin, a co-organizer of Chicago Rideshare Advocates told the Sun-Times. “We all like this, we just have to make it work better.”
Both Uber and Lyft oppose the proposal for a license cap.
The surge in ride-sharing services in Chicago has hurt business for cab and taxi drivers, while also worsening working conditions for Uber and Lyft drivers.
Earlier this year, Uber’s CEO Dara Khosrowshahi suggested that New York City officials should impose a fee on ride-sharing apps to help taxi medallion owners facing financial burdens from the increase of ride-sharing services. But the New York Taxi Workers Alliance called the proposal “a slap in the face to struggling drivers and an attempt to get out of being regulated.”
Chicago officials have proposed raising the average wage for drivers, which is currently less than the minimum wage at $11.53 an hour after expenses.
The group will hold its rally at the O’Hare Transportation Network Providers’ parking lot from 7-10 p.m. on Monday.
More Than 100 Cars Damaged in NYC Mall Parking Garage Inferno; Suspect Arrested: NYPD
Police have arrested a man in connection to a seven-alarm inferno that tore through a multi-level parking garage at Brooklyn’s Kings Plaza Shopping Center Monday, enveloping the entire area in thick smoke, engulfing more than 100 vehicles and leaving nearly two dozen people hurt.
Police say they’ve arrested Avon Stephens, 23, on an arson charge in the fire at a parking garage at the mall on Avenue U and Flatbush Avenue. A motive wasn’t clear, and details on an attorney for Stephens weren’t immediately available.
The fire call came in shortly before 9 a.m. Monday, and the blaze quickly escalated from a two-alarm to a four-alarm fire, then became a six-alarm inferno within an hour. By 11:15 a.m., it was a seven-alarm blaze. It was under control by noon.
Twenty-one people, 18 of them firefighters, suffered non-life-threatening injuries, mostly related to smoke inhalation and heat exhaustion. Four of the victims were taken to hospitals. Fire officials warned the patient total would likely rise.
A law enforcement source said 137 cars were damaged, and 70 of them were burned to their shells, many of them Mercedes.
The garage holds about 4,000 spaces and fire officials said 120 cars are normally stored there by a car dealership. There were some explosions from car tires burning; officials said there is no risk of collapse.
Citizen app video showed smoke spewing from the garage as bystanders crowded near emergency vehicles, seeking shelter from the shroud of smoke.
More than a half-dozen MTA bus lines were running with delays in the area because of the FDNY activity. The department said more than 200 of its members responded.
A mall spokesperson said to avoid the area until further notice. The plaza was closed, though officials said the fire did not extend to any stores.
Kings Plaza has more than 120 stores, including Macy’s, Best Buy, Sears, H&M, Michael Kors, Express and Foot Locker.
In 2013, it became the subject of a controversial order that temporarily banned people younger than 18 without the presence of an adult after hundreds of teens attacked patrons and vandalized the shopping center, forcing it to shut down.
No one was ultimately charged in that fray, nor was anyone hurt.
Council moves ahead on bills to help taxis
After years of failing to address the fallout from an upended taxi industry, the City Council is trying to make up for lost time.
Just a month after leading the way to an unprecedented one-year cap on Uber and Lyft vehicles, the council’s for-hire vehicle committee was back in action today with a hearing on nine more bills.
Overall they’re aimed at addressing the economic plight of roughly 6,000 individual taxi-medallion owners and the wider pool of taxi and ride-hail drivers, who now number more than 185,000, up from 30,000 six years ago. The push for more legislation has been fueled by six suicides in the past year by drivers who grew desperate because of their circumstances—and by a sense that the ride-hail industry has lost the ability it once had to block legislation it didn’t like.
The bills include an effort to establish a task force to study medallion values and recommend policies to increase prices and one to ask the Taxi and Limousine Commission to set up a program to provide drivers with health care and other insurance benefits.
If the bills pass, however, it remains unclear when they would bring relief, what form that relief would take and how it would be paid for. The health benefits proposal calls for adding a surcharge to all taxi and for-hire vehicle fares—which would be in addition to a congestion-pricing surcharge ($2.50 for cabs, $2.75 for app-based services) that will go into effect Jan. 1.
Taxi and Limousine Commission chair Meera Joshi, who testified in support of the bills, said it would be better to find a funding mechanism that didn’t antagonize passengers. The FHV committee chair, Ruben Diaz Sr., also spoke up against the surcharge.
The TLC, which will be developing the rules and carrying out the legislation, also will need to find out exactly what the health insurance needs are for the vast majority of drivers.
“That will be a painstaking study,” Joshi said.
Other bills are aimed at fighting predatory practices by car-leasing operators. They would require the TLC to set a cap on costs, ensure consumer-protection practices and prevent leasing operators from making automatic deductions from drivers’ earnings.
Some medallion owners who blame the TLC for allowing Uber and Lyft to flourish declared that the raft of new bills wouldn’t do much good if Joshi remained in charge of developing and enforcing the regulations.
“In our view, there can be no remedy if the remedy and the implementation are left up to the current TLC regime, which is [composed] of leftovers from the Bloomberg administration,” said Carolyn Protz, a medallion owner, who read from a letter from the Taxi Medallion Owner Driver Association.
Joshi was, in fact, appointed by Mayor Bill de Blasio, and much of the regulatory structure that determined Uber and Lyft’s place in the TLC universe was already in place when she started in May 2014.
In an email, Protz pointed out that Joshi was the TLC’s deputy counsel during the Bloomberg administration and that other senior TLC officials are also Bloomberg alumni.
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