It seems you can’t read an article about new mobility or the sharing economy without stumbling across Uber; the mobility service that sprung up in 2009 to only five years later become valued at more than Avis, Hertz, or Sony. Yes, Sony.
Two weeks ago, I found myself using the service for the first time, here in Paris. The ride went silky smooth largely due to its app, which is so easy-to-use your grandmother could use it. And I’ve since used it while traveling abroad, quickly realizing why so many opt for the convenience and availability over other options (often unknown for tourists). The company just expanded its offering with “Uber Pool” [link in French] – which now allows you to split a ride with strangers, making Paris only the second city in the world after San Francisco to trial this service. It also announced a tie-up with music streaming service Spotify, to sync your two accounts so that the car will be playing your preferred playlist when the car arrives. However, Uber’s entry into the mobility market has been anything but smooth and its implications are still unclear.
Just recently, under pressure from taxi lobbies, India moved to make Uber harder to use in its second largest market after the US. Uber has been lambasted for flouting the law and undermining public transit, and even threatening to lower GDP for countries where it operates. Berlin has moved to ban it outright. Taxi companies around Europe held protests against Uber, but famously ended up boosting Uber ridership by 850% as riders without options [ironically] ended up using the much-maligned, but also much-mentioned service. And of course, there’s the company’s CEO, Travis Kalanick, who has come under repeated fire for controversial statements and practices regarding competitor Lyft and other incidents.
Leaving all that aside, from a transport and energy perspective, the question is: does Uber make cities more energy efficient? The question has been hotly debated for carsharing for some time, including for such services as Zipcar and Autolib’, but with Avis Budget Group buying Zipcar and Autolib now running London’s carsharing project, it at least seems there is continued appetite in cities for these efforts as they continue to grapple with issues of pollution, congestion, and jobs and innovation.
In a recent piece for Harvard Business Review, Sarah Cannon (Manager at Google Capital) and Lawrence H. Summers (former President of Harvard University and 71st Secretary of the Treasury) weighed in with some advice for Uber and other sharing economy actors, which boils down to this: in order to demonstrate both their business case as well as their value-add to cities, sharing economy players have to play offense with regulators. They need to be brought on-board, not just defended against.
One thing is certain: the world continues to urbanize, and congestion in cities is going nowhere but up. With this in mind, it seems that Uber or other similar services will play a role in our cities if for no other reason than that we want them to. Uber claims to be able to take one million vehicles off the roads of London, and Lyft believes that by increasing vehicle occupancy in Los Angeles from 1.1 to 1.3 you would eliminate traffic in the city. Either prospect is tantalizing no matter your preferred mode of choice. This is akin to Autolib’s goal that for its 3,000 vehicles, you’d take 22,500 vehicles off the road in Paris; or about 7.5 cars off the road for each carsharing vehicle introduced.
However, if carsharing only attracts existing car owners or creates a rebound effect by attracting those using efficient public transit, then the system certainly becomes less appealing. Though, there is another interpretation: perhaps Uber and Autolib’ and other services are filling demand for convenient mobility services, and as mobility should always be as safe and convenient as we’re willing to pay for, is this additional demand, or simply unmet demand?
In the words of the Rocky Mountain Institute,
“The Ubers and Airbnbs of the world tap the huge value of underutilized assets and create millions of dollars of value for users in the process. Shared economy companies unbundle existing assets and enable value exchange out of those assets, with close to zero marginal capital cost since the users themselves own the actual physical assets, whether a car or a home. Could the electricity grid be next to go the way of a sharing economy?”
What do you think? Is Uber really that different from taxis? And if so, is the overall energy benefit positive?