How ridesharing could help the poor
Ridesharing apps like Uber and Lyft are very popular among millennials. The ease of ordering a car service directly from your smartphone is very appealing to those who are technically savvy. But a recent study shows that ridesharing has another potentially significant client base: the poor.
Transportation often is one of the biggest expenses facing low-income workers. Many do not own a car. They’re reliant on public transit, which is inadequate in many cities, or on taxi cabs. Taxis, with their supply and rates typically controlled by local governments, often are a fairly pricy proposition. Moreover, some taxis refuse to service the kinds of higher-crime neighborhoods where poor people are most likely to live.
Some recent data out of New York City suggests that ridesharing services may be a better option for the poor. Jared Meyer of the Manhattan Institute conducted a survey of whom and where UberX, the lower-cost Uber option, serves. The results he found would surprise many of the company’s detractors:
UberX is far less Manhattan-focused. Only 6 percent of yellow-taxi pickups were outside Manhattan or outside city airports—compared with 22 percent for UberX.
UberX is growing fast in low-income neighborhoods. Of UberX rides in noncore Manhattan and non-airport ZIP codes in December, 60 percent were in ZIP codes with median household income below the noncore Manhattan median—up from 54 percent in January.
UberX serves predominantly nonwhite, as well as predominantly white, neighborhoods. In the 29 noncore Manhattan and non-airport ZIP codes with one or more UberX pickups per household, black households constituted 29 percent of all households, while the average for all 146 noncore Manhattan ZIP codes was 27 percent. The aforementioned 29 ZIP codes included neighborhoods ranging from Greenpoint and Park Slope—where less than 5 percent of households are black—to Crown Heights and Harlem, where more than 75 percent of households are black.
One of the common features of Uber and its competitors is that rates often are lower than those charged by taxi cabs. There also is no cap on the number of cars working with ridesharing companies, unlike taxi fleets. This helps to lower costs for consumers.
With smartphones becoming more accessible even for the poorest Americans, ridesharing companies can play a role in expanding public transportation in many of America’s cities. In Atlanta, the Metropolitan Atlanta Rapid Transit Authority (MARTA) is partnering with Uber to work with passengers to help complete their journeys home from the bus and train station. A similar pilot program is currently being explored in Hillsborough County, Fla., which includes Tampa.
Could ridesharing even replace public bus service in major cities? One company thinks it can. Loup is running a route in San Francisco that competes with the local bus service. It’s too early to say if it will catch on elsewhere, but if it does, it could offer a solution to public transportation needs without burdening taxpayers.
Ridesharing, commonly thought of as an indulgence for tech-savvy, upwardly mobile millennials, might actually provide promise as a cheap form of transportation for low-income workers. The best thing government could do in this instance is just stay out of the way.
