In a recent telephone conversation with investors, Dara Khosrowshahi, CEO of Uber, offered what could be considered a mea culpa to the cities that the company was roughly passing over in its early days as a brutal, breakthrough technical startup.
"Listen, we are just this company that grew very fast," he said Monday. "And in the early years (was) the most important factor (speed) to the market, which was the earliest and scaled the fastest."
But cities that were initially caught flat by Uber don't sweat. Perhaps it is the company that can sweat now that cities have become more adept at making Uber pay for its past and present violations. A report released this week helps to get a clear picture of how cities around the world are working hard against Uber, Lyft and their competitors and what this will mean for the future of the driving industry.
Uber and Lyft invaded the public's consciousness for a promise to put an end to personal car ownership and improve urban transport, while marketing themselves to drivers as a fun and easy side effect. Ten years later, these companies are accused of increasing traffic congestion, increased exhaust emissions and a growing prosperity gap between rich and poor. Tens of thousands of drivers are crying out for better working conditions, while Uber and Lyft claim they really want flexibility.
Researchers from Rudin Center for Transportation Policy and Management at New York University profiled 13 major markets, including London, San Francisco, Los Angeles, New York City and Sao Paulo, to get an idea of how cities are rewriting the rules for ride laws. They discovered that cities regulate – or plan to regulate – these companies around four main areas: travel data, travel revenue (eg, congestion tax), environmental rules (eg, strict emission standards and congestion zone restrictions) and driver payments. Any newly adopted and forthcoming regulation requires Uber and its competitors to make significant changes to their business practices – changes that are likely to affect consumer prices.
"Cities are waking up," said Meera Joshi, the lead author of the report and the departing commissioner of the New York City Taxi and Limousine Commission. "They realize that they must have a grip on this industry."
With millions of drivers on the streets in cities around the world, companies that ride a bike quickly become the perfect source of information about how city dwellers move. And cities want that data so that they can make better informed decisions about access, equity, congestion and infrastructure. Most of the 13 cities that have been profiled by the Rudin Center require that companies that come with the ride submit travel data as a condition for business operations. Companies that defy these orders run the risk of losing business.
Take Uber in Los Angeles, for example. The company's license to operate bicycles and scooters was recently temporarily suspended because of the refusal to comply with the order of the city to provide real-time location data. Jump, the bicycle and scooter subsidiary of Uber, has until Friday 8 November to appeal or to leave the city. Uber has threatened to prosecute the city for its & # 39; apparently unfair and improper & # 39; suspension.
Putting pressure on driving companies for taxes and surcharges is another way that cities can pay for road improvements. New York City, for example, charges $ 2.75 per ride for all Uber and Lyft journeys that take place in or through the city's congestion zone, located below 96th Street in Manhattan. New York City has recently become the first city in the US to approve a congestion price scheme that applies to all vehicles driving in the busiest parts of Manhattan.
For years, Uber and Lyft have told a big game about ending personal car ownership. "People won't own a car," said Uber & former CEO Travis Kalanick in 2016. "They have a service that takes them where they want to go." .
But on the way to ending car ownership, Uber and Lyft got sidetracked and hid cities with more traffic. Between 2010 and 2016, traffic congestion in San Francisco increased by around 60 percent, and Uber and Lyft accounted for more than half of that increase, according to a study published this year. Another study found that Uber and Lyft added 5.7 billion km of kilometers annually in cities such as Boston, Chicago, Los Angeles, Miami, New York City, Philadelphia, San Francisco, Seattle and Washington, DC.
Cities are becoming more skilled at charging tolls for all that congestion and pollution, notes the Rudin Center. Most profiled cities have set strict rules for vehicle emissions and have adopted policies aimed at reducing the attractiveness of traveling with one person in their most crowded areas. In 2015, Mexico City levied a tax of 1.5 percent per ride on hailed rides, the funds of which help subsidize drivers who want to switch to hybrid or electric vehicles. Sao Paulo uses a dynamic road use rate that charges companies higher prices for traveling at peak times with only one passenger. Ride-wheeling companies that were originally exempted from London's daily congestion prices of £ 11.50 now have to pay this like most other drivers.
Drivers are emerging as a flash point between cities and companies that drive. The wages of drivers are being reduced in cities around the world, while their expenses are rising. Cities are increasingly under pressure to introduce wage protection for administrators, but those efforts have not gone mainstream, according to the Rudin Center team. New York City leads the way. In February, the city introduced new rules requiring companies with a driver's license to pay drivers at least $ 17.22 per hour after expenses.
Uber responded to the Rudin Center report by announcing its efforts to integrate public transportation into the app and increase the use of electric vehicles and lead customers to emission-free modes such as bicycles and scooters. "We work with cities around the world and use our technology and resources to solve their most urgent problems," said a spokesperson.
Lyft said it is committed to expanding access and opportunities in most cities. "We always want to work with all stakeholders to ensure that drivers have access to affordable and reliable transportation and drivers can earn according to their own schedule," said a spokesperson.
But driving companies fundamentally reject the idea that their industry is harmful to cities. "I think more and more cities and countries around the world are coming to the conclusion that Uber is good for the country and that Uber is also good for their city," Khosrowshahi said this week.
Whether or not you agree with that statement is important. Uber and Lyft, and their competitors such as Didi, Ola and Grab, have established themselves as a fundamental part of city life. In prosperity and adversity, they are there until they go bankrupt – which, depending on your point of view, might be rather than later – and it is up to cities to figure out how to curb their worst effects.