Research and articles: The hidden costs of (under-regulated) ride-hailing
In Toronto (and elsewhere), ride-hailing giants like Uber are working hard to convince us that they can deliver public benefits without additional regulatory oversight. They claim ride-hailing has reduced car ownership and vehicle congestion, complemented rather than undermined public transit and has provided good jobs. The evidence suggests otherwise.
Why are ride-hailing companies spending so much to convince us they do no harm? Because many cities and regions - like Toronto - are beginning to restore public oversight over the industry. And we need them to, if we want to address the hidden costs of unregulated ride-hailing. Here, we’ve assembled a (non-exhaustive) set of recent studies and articles documenting these impacts. Come back for updates!
With better regulations, ride-hailing can work for us all.
No, unregulated ride-hailing has tended to increase rather than ease congestion.
Studies by the City of Toronto estimate that between September 2016 and January 2019, the number of daily ride-hailing trips in Toronto nearly tripled. City staff estimate ride-hailing traffic made up 8-14% of peak traffic in congested downtown areas in February 2020, and other major cities report similar numbers. Ride-hailing is also most often used in the morning and afternoon peak periods, when city streets are experiencing the most traffic. New York City actively monitors how ride-hailing affects congestion, and uses this information for licensing and regulation.
Resources:
City of Toronto (2021) Research & Analysis: The Transportation Impacts of Vehicle-for-Hire in the City of Toronto: October 2018 to July 2021.
Brasuell, James (2021) Report: Ride-Hailing Drastically Increases Vehicle Miles Traveled | Planetizen News
Mi Diao, Hui Kong & Jinhua Zhao (2021) Impacts of transportation network companies on urban mobility. Nature Sustainability, volume 4, 494–500
Schaller, Bruce (2021) .Can sharing a ride make for less traffic? Evidence from Uber and Lyft and implications for Cities. Transport Policy, March 2021, pp. 1-10.
Szymkowski, Sean (2021) Yet another study says Uber and Lyft are worse for traffic congestion - CNE
Erhardt, Gregory, Roy, Sneha; Cooper, Drew; Sana, Bhargava; Chen, Mei; Castiglione, Joe (May 9, 2019) Do transportation network companies decrease or increase congestion? | Science Advances,Vol 5, Issue 5
City of Toronto (2019) The Transportation Impacts of Vehicle-for-Hire in the City of Toronto
No, it tends to replace more sustainable modes of transport.
Studies in Toronto and other cities suggest that ride-hailing adds traffic to the road that wouldn’t otherwise be there. A 2019 Toronto study found that in 60% of cases, passengers would have chosen a non-car based alternative mode of transit, most often public transit (49%), bike or walk (6%) or no trip (5%), had rideshares not been available. Only 5% would have driven a private car.
Resources:
Ransford A. Acheampong, Ernest Agyemang, Augustine Yaw Asuah (October 2023). “Is ride-hailing a step closer to personal car use?” Travel Behaviour and Society, 33, 100614.
Jacob W. Ward,Jeremy J. Michalek, Constantine Samaras, Ines L. Azevedo, Alejandro Henao, Clement Rames, Tom Wenzel (January 22, 2020) The impact of Uber and Lyft on vehicle ownership, fuel economy, and transit across U.S. cities. iScience, 24, 101933
Erhardt, Gregory, Roy, Sneha; Cooper, Drew; Sana, Bhargava; Chen, Mei; Castiglione, Joe (May 9, 2019) Do transportation network companies decrease or increase congestion? | Science Advances,Vol 5, Issue 5,
Matt MacFarland (April 2019) Uber wants to compete with public transit. These experts are horrified | CNN Business.
City of Toronto (2019) Research & Analysis The Transportation Impacts of Vehicle-for-Hire in the City of Toronto.
Schaller, Bruce (2017) UNSUSTAINABLE? The Growth of App-Based Ride Services and Traffic, Travel and the Future of New York City. Schaller Consulting.
Overall, ride-hailing COMPETES with more than complements transit - particularly in dense, transit-rich cities
In Toronto, ride-hailing companies took an estimated 31 million trips out of our public transit system in 2019, according to data provided by the City and the TTC. This translates into an estimated farebox loss of $74 million. More recently, a University of Toronto study estimated 31% of ride-hailing trips compete directly with transit.
Other cities report similar impacts, including other transit-rich cities like Chicago, Boston, New York and San Francisco. A recent review estimates the introduction of ride-hailing services was the largest contributor to transit ridership decline in US cities between 2012 and 2018, associated with a 10% decline in bus ridership in particular.
Resources:
Gregory D. Erhardt, Jawad Mahmud Hoque, Vedant Goyal, Simon Berrebi, Candace Brakewood, Kari E. Watkins (July 2022) Why has public transit ridership declined in the United States? Transportation Research, 161, 68-87
William Mallet (November 2022) Public Transportation Ridership: Implications of Recent Trends for Federal Policy. Congressional Research Service.
Mi Diao, Hui Kong & Jinhua Zhao (2021) Impacts of transportation network companies on urban mobility. Nature Sustainability, volume 4, 494–500.
RideFair (2021). Budgeting for the Uber Impact.
Trevor Dunn (February 2021) The TTC is losing more revenue to Uber and Lyft than to fare evasion: report | CBC News
Lee, Kyunghee and Jin, Qianran and Animesh, Animesh and Ramaprasad, Jui (October 31, 2019) Impact of Ride-Hailing Services on Transportation Mode Choices: Evidence from Traffic and Transit Ridership Forthcoming at MIS Quarterly.
Mischa Young, Jeff Allen and Steven Farber (January 2020) Measuring when Uber behaves as a substitute or supplement to transit: An examination of travel-time differences in Toronto. Journal of Transport Geography, 82, 102629.
Massachusetts Metropolitan Area Planning Council (2018) Fare Choices: A survey of ride-hailing passengers in Metro Boston.
Dan Boylen (February 5, 2019) Uber, Lyft crushing bus and subway ridership in cities: Study - Washington Times
Leyland Cecco (July 16, 2019) The Innisfil experiment: the town that replaced public transit with Uber. The Guardian
Michael Graehler, Alex Mucci, Gregory D. Erhardt (January 2019). Understanding the recent transit ridership decline in major US cities: Service cuts or emerging modes? Transportation Research Board Conference.
Lynda Lopes (October 2019). City's ride-hailing report quantifies the damage Uber and Lyft are doing to Chicago. Streetsblog Chicago.
City of Toronto (2019) Research & Analysis The Transportation Impacts of Vehicle-for-Hire in the City of Toronto.
No, emissions have increased; ride-hailing remains one of the least efficient modes of urban transportation.
The Union of Concerned Scientists estimates ride-hailing trips are currently 69% more polluting than modes of transit they replace. This is in part because they transport low numbers of passengers for only a fraction of the time they operate - in Toronto, just under half drivers’ operating time is spent with passengers. A recent study by the University of Toronto found that one-third of emissions from ride-hailing were generated by deadheading, the period of time when drivers are circulating without passengers and unpaid, seeking their next ride. As the number of drivers grows relative to ride requests, deadheading time can increase.
The volume of ride-hailing activity also matters. In Toronto, the transportation sector accounts for 35% of emissions. The number of vehicles for hire registered in Toronto (including taxis) increased 500% in the five years after ride-hailing was introduced, according to The Atmospheric Fund (TAF). During this time, TAF estimates that vehicles for hire increased emissions by over 40,000 tonnes a year.
In most North American urban centers, ride-hailing trips tend to replace more sustainable modes of transportation (i.e., transit and active transportation; see above); these mode shifts magnify the emissions impact of ride-hailing. Toronto’s decarbonization plan calls for a substantial shift to more sustainable transportation modes in addition to electrification.
A major barrier to the electrification of the vehicle for hire industry remains the fact that ride-hailing drivers, not the platforms they work for, have to shoulder the cost of acquiring and operating their cars. Thus a plan to move ride-hailing drivers to a true living wage must be a central component of every robust electrification plan for the industry.
Resources:
David Meyer (November 6, 2023) Limitless E-Ubers and E-Lyfts Will Hurt Traffic, Air, People: Suit - Streetsblog New York City
Andrew Grant (July 25, 2023) Uber and Lyft’s Pricey Electric Vehicle Problem: EV adoption among US ride-hailing drivers is lagging behind due to a dearth of affordable options. Bloomberg Green.
Marc Saleh, Shoma Yamanouchi, Arman Ganji, Marianne Hatzopoulou (May 2, 2023). Vehicle-for-Hire Emissions Calculation and Modelling.Transportation and Air Quality (TRAQ) research group, University of Toronto School of Engineering.
City of Toronto (September 2023) Vehicle for Hire Net Zero Report 5 (report tables)
City of Toronto (November 2021) Research & Analysis: The Transportation Impacts of Vehicle-for-Hire in the City of Toronto: October 2018 to July 2021
Don Anair, Jeremy Martin, Maria Cecilia Pinto de Moura, Joshua Goldman (February 2020) Ride-Hailing Climate Risks | Union of Concerned Scientists
California Air Resources Board (December 2019). Base year emissions inventory.
Metropolitan Area Planning Council (2019) The growing carbon footprint of ride-hailing in Massachusetts.
Bryan Purcell (June 28, 2019) Why is Toronto considering eliminating fuel efficiency standards instead of strengthening them? Toronto Atmospheric Fund.
City of Toronto (June 21, 2019) Review of the City of Toronto Municipal Code, Chapter 546, Licensing of Vehicles-for-Hire
Without adequate regulations, study after study has shown ride-hail workers often earn below minimum wage, especially once costs are factored in.
A recent Forbes article estimates Uber decreased its US driver pay per trip by nearly 12% in late 2023 compared to late 2022, and overstates by more than double what drivers can expect to be paid per working hour, net of operating expenses.
Likewise, in Toronto, Uber reports that the median driver earns about $34 per “engaged hour.” This figure only considers “engaged time” (when drivers have a passenger in their car), and does not take into account the 52% of time they are not driving someone (including going to pick them up), or the cost of maintaining a car (which can be calculated as roughly $12.28 per hour at typical speeds). This means that the same drivers earning “$34 per engaged hour” are taking home roughly $4 per hour.
The more drivers there are on the road, the time spent with passengers tends to decrease, translating to lower take-home pay for drivers.
Resources:
Sherman, Len (January 16, 2024). Will 2024 be a year of reckoning for Uber’s driver relations? Forbes.
Sherman, Len (December 15, 2023) Uber CEO hides driver pay cuts to boost profits. Forbes.
Slee, Tom (January 2023). High Emissions and Low Pay: Uber is Still Taking Regulators for a Ride. Report contributed to RideFair.
Vanmala Subramanian (January 31, 2023). Uber drivers earn less than $8 per hour, says new report from gig worker advocacy group - The Globe and Mail.
National Equity Atlas (September 21, 2022) Report: Uber and Lyft promised drivers good pay, benefits, and flexibility with California’s Prop 22. What drivers got were poverty wages.
City of Toronto (November 2021) Update on Outstanding Vehicle-for-Hire Directives
Frank Manzo, Robert Bruno (February 2021) On-Demand Workers, Sub-Minimum Wages. Illinois Economic Policy Institute.
Shirin Ghaffary (December 2018) New York City has set the nation’s first minimum pay rate for Uber and Lyft drivers. Vox.com
Yves Smith (2016) Can Uber Ever Deliver? Part One – Understanding Uber’s Bleak Operating Economics | naked capitalism