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Thursday, July 7, 2016
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In July 2015, New York City mayor Bill de Blasio proposed limiting the growth of ride-sharing companies to just 1 percent for a year while the city studied their effect on Manhattan traffic congestion. De Blasio is a strong defender of the taxi industry and he received over half a million dollars from its backers in his election campaign.
De Blasio’s misguided attacks on ride sharing threaten the growth of a system that has achieved what yellow taxis were never able to—expanding transportation options for low-income outer-borough New Yorkers. As a proudly progressive mayor, de Blasio should focus on all New Yorkers, not just those who live in downtown and midtown Manhattan.
My analysis of Uber’s proprietary ride data shows that almost 9.5 million UberX rides took place in New York City in 2014. UberX is the company’s cheapest, most widely used option. Its monthly ride total increased an impressive 450 percent from January to December of that year. Uber’s expansion has benefited low- and middle-income outer-borough New Yorkers the most. These people live outside downtown and midtown—or core—Manhattan, in zip codes that are in the bottom half of New York City’s median household income.
Of December 2014 UberX rides outside core Manhattan, 60 percent were started in zip codes in the bottom half of household incomes—up from 54 percent in January 2014. Over the course of 2014, seven of the eleven zip codes outside core Manhattan that saw their monthly rides grow by over 1,000 percent had below-median incomes. Furthermore, the historically low-income neighborhoods of Jackson Heights, Astoria, Harlem, and Washington Heights all saw UberX trips increase over twelve-fold.
The percentages of Uber trips taken per household in low-income noncore Manhattan zip codes increased from an annualized 0.24 in January 2014 to 1.97 in December 2014. This increase closed the gap that was seen between low-income and high-income noncore Manhattan zip codes. Uber, in other words, is expanding fast in New York’s low-income neighborhoods as the service gains popularity.
Luckily the cap on Uber’s growth was not put in place in January 2014. If it had been, there would have been over two hundred thousand fewer UberX rides for lower-income outer-borough residents in December 2014. That is nearly seven thousand UberX trips a day that would have never taken place. These expanded transportation options for outer-borough residents should not be removed by city bureaucrats worried about Manhattan traffic.
As it turns out, de Blasio’s argument that Uber’s growth is the primary reason for increased Manhattan congestion is an exaggeration. Simply because there are more drivers who have signed up to partner with Uber than there are yellow taxis does not mean that there are more Ubers on the road. Four in ten New York City drivers who partner with Uber work less than fifteen hours a week, and less than 10 percent drive for more than fifty hours a week. Alternately, the average yellow taxi shift is 9.5 hours.
Yellow taxi trips still greatly outnumber UberX trips in New York City. In 2014, there were around 175 million annual yellow taxi trips—nearly twenty times more than UberX’s 2014 total. The gap has narrowed over the past year as Uber has gained more users, but it undoubtedly still exists.
Additionally, compared to yellow taxis, UberX is far less Manhattan focused. Less than 6 percent of yellow taxi pickups were outside of Manhattan and at the city’s airports in December 2014, compared with 27 percent for UberX.
As someone who lived in Jamaica, Queens, for four years, I can attest to how rare it was to ever see a yellow taxi out there—much less to successfully hail one. Even getting back home from Manhattan was difficult, as drivers would turn you down once they found out that you needed a ride to an outer borough.
Yellow cabs are so notorious for only cruising Manhattan streets below the top of Central Park that in 2013 the city instituted green taxis, which are allowed to only pick up rides north of Central Park and in the outer boroughs (but not at the airports). While green taxis are a welcome improvement, the system is inefficient because if a driver picks up a passenger who wants to go to midtown or downtown Manhattan, the driver has to leave Manhattan to pick up another customer. And yellow cab owners fought to kill the green cab program and continue to lobby to keep these taxis out of the busiest parts of the city.
As alternative transportation sources to yellow and green cabs grow, we should expect continued expanded access to them for low-income neighborhoods. This growth should be encouraged, not capped, as the existing taxi system has consistently failed to meet the needs of many New Yorkers, even with the creation of green taxis.
The increasing ubiquitousness of smart phones and credit cards, both required to use most ride-sharing platforms, has allowed the customer base of Uber and its competitors to grow beyond its tech-savvy early adopters. Ride sharing’s benefits, similar to those of nearly all innovations, have now reached a wide segment of the population, including low-income households.
In a video that Uber released to show how its service benefits the city, one driver named Lassana explains how driving with Uber benefits him: “I make more money and I spend more time with my family . . . we don’t just pick people up. We pick ourselves up, we pick our families up . . . I don’t think [de Blasio’s plan] is really fair.”
Contrast the following statement of Moises, another Uber driver from the video, with that of the Taxi King, Gene Freidman, who was taking advantage of a government-created monopoly to enrich himself. Moises rightly pleads, “Millionaire medallion owners don’t need help. People like us do.” Freidman says that he agreed with de Blasio’s attempts to limit the work and transportation opportunities that Uber provides to thousands of New Yorkers, including Moises.
Encouragingly, in stark opposition to de Blasio, New York governor Andrew Cuomo has proposed a new statewide regulatory framework to encourage ride-sharing companies to expand throughout the rest of the state.
“Uber is one of these great inventions, startups, of this new economy and it’s taking off like fire to dry grass and it’s giving people jobs,” Cuomo declared. “I don’t think the government should be in the business of trying to restrict job growth.”
Strong public outcry earlier this year prevented City Hall from halting Uber’s growth and forced the city into a truce. In exchange for access to Uber’s private ride data, City Hall allowed Uber and other ride-sharing companies to continue expanding while it studied their effect on Manhattan traffic, though it kept the threat of a cap on the table.
De Blasio’s opposition to Uber and other transportation start-ups squares poorly with his progressive principles, including his campaign pledge to narrow inequalities between the city’s residents by being a mayor for all New Yorkers.
Why focus on Manhattan traffic when ride sharing helps to improve the ability of lower-income New Yorkers to safely and affordably hail rides in their own neighborhoods?
Thankfully, the city produced an honest report that concludes that ride sharing’s growth is not to blame for increased Manhattan congestion. The report, released in January 2016, finds that the 10 percent reduction in Manhattan traffic speeds over the previous two years is instead caused by construction activity, double parking, and the city’s general economic and population growth. This was an obvious conclusion. Even as ride sharing grew dramatically and New York City traffic slowed, the total vehicle miles traveled in central Manhattan remained flat over 2014 and 2015. Because of these findings, a cap on ride sharing was not recommended.
Even with the cap on ride sharing’s growth now a thing of the past, there are continued efforts from de Blasio to limit a business model that benefits New Yorkers and the city’s economy. The proposed cap was never about helping New Yorkers—it was purely about protecting taxi companies from increased competition. Truly progressive thinking means not standing in the way of clear innovation and widely shared growth.
The mayor and City Council members should take note of these realities as they debate their future responses to Uber’s growth. Doing so is not only the right thing to do; it makes sense politically. It turns out that people do not like it when the government gets between them and their Ubers.
This piece originally appeared on Heat Street
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Jared Meyer is a fellow at the Manhattan Institute's Economics21. Follow him on Twitter here.
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https://heatst.com/biz/why-did-bill-de-blasios-war-on-uber-backfire-so-badly/
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