The Future of Urban Transportation Is Sharing

By Jing Zhu

Jing Zhu is the founder and CEO of Duet, a mobility as a service startup based in the San Francisco Bay Area.

Apr 20, 2017 | Mobility | 0 comments

Recently, a researcher on LinkedIn who has done extensive research on ridesharing in the United States messaged me saying: “Sharing is not in the American DNA”. He doesn’t believe that ridesharing will take off in the U.S. The statement intrigued me both as a trained biologist and as someone who has worked in technology and mobility for the last decade. Is sharing in our DNA? Furthermore, can sharing be nurtured?

Sharing is Natural to Us

I disagree with my colleague; Americans do share and it’s practically baked into our DNA.  Consider this:

  • We fund 22% of the United Nation’s budget each year, that’s a big share
  • We spent over 3% of federal discretionary budget in 2015 on international affairs
  • We share our products, innovations, events, life, culture and ideology with the world.
  • We share our lives on Facebook, Instagram and SnapChat.
  • We share our thoughts and information on Twitter, YouTube and blogs.
  • We even share our home with strangers through Airbnb, Couchsurfing and Craigslist.

The U.S. creates an environment for people to share themselves freely, and share we do.  We share anything and everything within our comfort zone.

Our consumer-based free market economy has nurtured the smartest and most discerning consumers in the world. These consumers have driven the creation of tools and technologies that help analyze the market and select the right product. We even share our shopping experiences through on-line reviews.

The Social Aspect of Sharing

Sharing is social. Brian Chesky, CEO of Airbnb, says he frequently hears from users that the friendships forged between hosts and guests outlast the time they share the home.

The same thing happens with ridesharing. When two or more people share a small, confined space like a car for any substantial amount of time, they strike up a conversation. Some conversations may end with the trip, but others continue far beyond.  The entire ideation of Netflix happened when Marc Randolph and Reed Hastings carpooled daily from Santa Cruz to Las Gatos.  In San Francisco, everyone has an UberPool or Lyft Line story to tell. We’re social beings, and it’s our nature to share.

Sharing is Nurtured: Carpools and Rideshare

We’ve already been sharing rides for years. The carpool is as old as the automobile itself.  The recession of 1914 gave rise to the “jitney” movement in California where entrepreneurial car owners offered a ride for the price of street car fare. And of course, we’ve always shared rides with family and friends. The gas shortages of the ‘70’s gave birth to the tradition of carpooling with co-workers, which is the form most commonly associated with the term.

In the last fifty years, we’ve shared rides with people we don’t know but we’ve met through company bulletin boards or a public agency’s website, such as 511.org. The last three years have found us happily sharing rides with complete strangers thanks to UberPool and LyftLine.  These are people we didn’t know before the ride and still don’t know after the ride.  And we are OK with it.

Why Ridesharing is Becoming Popular

Why is ridesharing gaining popularity? The more we share, the more open we are to sharing.  Even if sharing isn’t encoded in DNA for some of us, it can still be nurtured. On a more practical level it can be boiled down to three factors, and we constantly optimize one by sacrificing the others based on each situation. If the main factor is:

  • Cost – we will take the least costly transit option even if it takes twice as long.
  • Time – we will take the fastest mode even if it means higher cost or time spent sharing a car with a stranger (e.g., Casual Carpool for crossing the Bay Bridge).
  • Personal preference – some simply don’t like driving or taking public transit, and will avoid it even if it means paying more or a longer travel time.

The increase in employment opportunities in major urban areas has attracted more workers. This urbanization has outpaced the growth of infrastructure and resulted in congestion and stressful driving conditions. Time-savings and avoided stress help shift the consumer’s decision toward modes of shared mobility.

Barriers to Ridesharing Growth

If sharing is so good, why isn’t ridesharing our de facto mobility choice? Density, sprawl and network size are the major barriers.

Density

The average population density in the U.S. is 85 people per square mile. In many Asian countries, it is at least 5 times higher. The density of European countries is more than 3 times higher. Ridesharing requires matching people with specific criteria: travel routes and times. Effective matching requires what’s known as a critical mass – a network that has the minimum viable number of users in order to be effective. The bigger the user base, the higher the match rate. For an on-demand match, the network size needs to be even larger. The chances of two people pushing the button at the same time for a ride to similar place drops with decreasing density.

As a result, low population density in the U.S. doesn’t favor matching for ridesharing as well as it does in Asia or Europe. However, if people plan and schedule their rides ahead of time, we can accumulate demand over a period of time and compensate for the lack of density.  The planned ride model is a more practical approach for sharing for the US.

Urban Sprawl

Low population density is accompanied by sprawl in urban areas. Since ridesharing fares increase with distance, the service is mainly found to be popular in densely populated cities and urban areas. Traveling more than 10 miles in one trip can put the cost of on-demand ride-hailing beyond the reach of most consumers and out of the question for most daily commuters. Peer-to-peer ridesharing and carpooling reduce the costs because the driver is making the trip regardless of sharing.

Network Size

Ridesharing businesses must build a large user network to ensure ride matching. Quickly building the user network is always the most challenging part of the business. It requires great marketing prowess and an ample budget.

To grow ridesharing in the U.S., private and public sectors need to collaborate to innovate new services and policies to simplify the sharing process, shift user’s mindset and create favorable policies to drive the behavioral change.

The Future of Urban Transportation

It’s fairly clear that ride-hailing services like Uber and Lyft have established a beachhead in transportation and will become a mainstream option for metro areas. Increasing traffic congestion and the rising costs of building and expanding roads will spawn more mobility services. You can expect more future regulation to ensure the safety of users and maintain order in the streets.

The Self-Driving Car is a Game-Changer

We are now living the most exciting time in transportation history since the invention of the automobile. More than thirty companies; large automakers, technology giants and innovative startups, are competing to bring self-driving vehicles to our daily lives. The driverless future is very complex and involves more than just technology. Nonetheless, it is more real now than it has ever been, and there is promise that we will see these technologies sharing our roadways in the near future.

If a vehicle can drive itself, do we still need to own a car? That’s the big question. Our mobility needs are diverse: from the regular commute, to ad hoc rides and weekend road-trips. Will the Uber model serve all these needs? Probably not. We will need more than one type of service and more than one supplier.

I foresee three mobility service models that will cover our transportation needs and replace car ownership altogether:

  • Ridesharing will provide a scheduled ride with certainty and cost efficiency,
  • Ride-hailing will give us mobility on demand
  • Car-sharing will give us exclusive use and the privacy of a personal vehicle when we need it.

Together, these three models can satisfy a wide range of demands on cost, time and personal preference.

A Glimpse of the Future

The future of ground transportation may steal a page from the operational playbook of present day air travel. We may see fleets of driverless cars to support three mobility service models: ridesharing, ride-hailing and car-sharing.

We will have fleet management and dispatching services similar to the airlines. Cars will have the ability to be mobilized or parked near where they will soon be needed.  Data will predict demand, optimize the number of cars needed, and indicate where they need to deploy.  Driverless ground travel will be so much easier than air travel as the car will come to you when you are about to leave and go away when you arrive at your destination; a seamless experience. Car ownership will no longer be necessary. Pumping gas, oil changes, auto-insurance and parking hassles will all be relics of the past.  The car utilization rate (the amount of time a car is in use) will be increased from 4% to 50% or higher, thus, fewer cars will be necessary.

Just think of how much space we can reclaim in homes, offices and elsewhere from garages and parking lots. That’s more space, less traffic and less stress. And we will have more time because we won’t be focused on driving. That’s truly precious.

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