Category: Vehicles

Preliminary models of individual ownership of AVs show VMT increasing dramatically—will AVs be fleets or individually owned

Could a Cap on Ridehailing Curb Equity Gains?

Though no longer brand new, ridehail companies like Uber and Lyft continue to cause consternation as cities struggle with how to plan for and regulate them. Some cities have opted for trip-based taxes and fees, while others have regulated the number of cars allowed to operate. In August, New York City became the first American city to cap the number of ridehail vehicles permitted to operate each day .

Taxi drivers celebrated this move as a victory against Silicon Valley titans. But some city councilors cautioned that the New York City cap could harm low-income neighborhoods and communities of color, who have historically been underserved or avoided by taxis. Could they be right? My own research on Lyft in Los Angeles suggests: yes. Ridehailing extends reliable car access to low-income neighborhoods, majority-black neighborhoods, and areas with limited access to personal cars. A cap on ridehailing could concentrate drivers in wealthier neighborhoods, driving up prices and wait times in lower-income neighborhoods. In other words, a ridehail cap threatens to undermine the access it delivers to neighborhoods that need it the most.

Lyft serves everywhere. Data from over 6.3 million Lyft trips in Los Angeles reveal that Lyft service is remarkably ubiquitous. In a county with dense urban centers, sprawling suburbs, and remote mountain towns, Lyft trips served neighborhoods home to 99.8 percent of the population.

Lyft is used most where personal car access is lowest. Most people used Lyft to fill an occasional travel need, taking just one trip per month on average. But data also suggest that people took more Lyft trips where its close substitute—the household car—was scarcest and corresponding car travel was most limited.

Ridehail use is highest in low-income neighborhoods. Riders living in low-income neighborhoods relied disproportionately on Lyft, taking 36 percent more Lyft trips per month than users living in high-income neighborhoods. Riders in these neighborhoods made more of their trips on shared and less-expensive Lyft Line compared to riders living in high-income neighborhoods. Over one-third (34%) of users in low-income areas made shared trips on Lyft Line while users in high-income areas used this service less frequently, approximately 22 percent of the time. These results suggest that sharing provides an important low-cost option for cost-sensitive travelers.

Access is improved, yet questions remain, in communities of color. Taxis have historically avoided or refused to serve communities of color. Lyft presents a more promising story. Riders living in majority-black neighborhoods in Los Angeles took more Lyft trips than riders living in neighborhoods with any other racial/ethnic majority group, even after accounting for neighborhood characteristics like density and transit service. At the same time, questions about barriers to ridehail service remain. Riders living in majority-Hispanic and majority-Asian neighborhoods took fewer trips than expected all else being equal; lower use in these neighborhoods may reflect unequal banking access, smartphone ownership, or other barriers that inhibit residents from hailing a Lyft. More research is needed to ensure that all travelers can hail a ride.

Ridehailing provides car access in neighborhoods where personal access to cars is lowest. Capping the number of ridehail vehicles could encourage drivers to concentrate on higher-income neighborhoods, where they may anticipate more demand and longer, pricier trips. Taxis have long ascribed to this model, gathering around downtown hotels and businesses where they anticipate high-paying clientele. In doing so, taxis often avoid lower-income neighborhoods where personal car access is lowest, despite data showing that the residents in these areas rely disproportionately on taxis to travel by car. A ridehail cap could similarly encourage drivers to flock to wealthier neighborhoods, raising prices or wait times in less-affluent or less-central neighborhoods. Higher prices and long wait times in these communities could undermine the access benefits that ridehailing has provided to date. Worse, attempts to draw drivers into these areas through tactics such as “surge pricing”, while an incentive for drivers, could put ridehailing out of financial reach entirely for those who need it the most.

Instead of simply capping ridehailing, cities should consider the holistic role ridehailing can play in the broader mobility puzzle and how different regulations will affect cities’ visions for the future. While ridehailing can and should be regulated—such as to maintain safety standards or require data sharing—it is important that cities understand the wider effects of these regulations and implement equitable policies that will improve access for all.

 

NYC at Cap-acity

Photo by Kevin Lee on Unsplash

It is official—after much anticipation, the New York City Council voted to impose a year-long cap on for-hire vehicles and will not issue any new vehicle licenses for the duration of the cap period, although they have made an exception for wheelchair accessible vehicles. (Of which there are not nearly enough.) During the upcoming year, the New York Taxi and Limousine Commission (TLC) will also be tasked with studying whether to adopt vehicle utilization standards or regulations…essentially, they will determine if there should be permanent regulations in place limiting the number of for-hire vehicle licenses issued, much the way that taxi medallions have been regulated for decades. Perhaps unsurprisingly, Uber and Lyft lobbied pretty hard against this bill, arguing that a cap on the number of vehicles will decrease vehicle availability leading to longer wait times and, possibly, higher fares. Despite their efforts, the bill passed 39-6.

According to the NY Times, the number of for-hire vehicles in the city has increased to 100,000, up from 63,000 in 2015 when Mayor de Blasio tried, and failed, to institute a cap. This time around, there was support not just from taxi drivers who have seen the value of their medallions plummet but also many of the independent contractors who drive for the TNCs. (The Independent Drivers Guild was heavily involved in the campaign to pass the bill.) In addition to imposing a cap on vehicles, the NYC Council also voted in favor of giving the Taxi and Limousine Commission the ability to establish minimum payments for for-hire drivers—a big win for drivers.

For a window into the for-hire driver’s view, I suggest checking out the Independent Drivers Guild’s FAQs about the cap, which provides a easy-to-digest summary of what they’re anticipating the cap will mean. (They anticipate the demand for leasing to skyrocket under the cap as new drivers look for ways to acquire vehicles.) The Rideshare Guy, a go-to source of information for rideshare drivers, also posted a summary of the suite of bills that passed yesterday and how to decipher them.

The passage of these bills comes on the heels of a new report published by Bruce Schaller, a transportation consultant and former DOT commissioner, who did some serious data crunching and determined that “Private ride TNC services (UberX, Lyft) put 2.8 new TNC vehicles miles on the road for each mile of personal driving removed, for an overall 180 percent increase in driving on city streets.” He also concludes that TNCs primarily compete with transit, walking, and biking, not other private vehicles. (This does to seem to be in line with a growing body of research that finds that people are using TNCs in place of trips they might otherwise have made by transit, walking, or biking.)

Robin Chase, co-founder and former CEO of Zipcar, thinks we are far too focused on the trips being replaced by TNCs and are missing the bigger picture: 72% of trips taken are taken by private vehicle. TNCs and taxis only account for 1.2% of total trips nationwide. Why aren’t we asking what other modes people might have used for a trip if they hadn’t used a personal vehicle, she wonders. Presumably some fraction of those personal vehicle trips could have been made by walk, bike, or transit. All of this focus on the impacts that TNCs are having on congestion is glossing over the fact that congestion was already an issue long before TNCs arrived, she argues. Instead, we should institute fair user fees across ALL modes, private vehicles included, which is one of Shared Mobility Principles that have been committed to by a growing number of agencies, private companies, and advocacy groups. (Notably, NYC recently enacted a surcharge for taxis and TNCs in Manhattan for rides south of 96th Street, but did not manage to institute the much-discussed congestion zone, which would have required private vehicles to pay a daily use fee during busy times—with the idea that the funds would help raise money for the subway.)

It will be illuminating to see how the vehicle cap plays out in NYC over the coming year, and what findings the TLC arrive at. But one thing does seem clear…there may be enough political support to cap TNCs in NY but the private vehicle will live to see other another day without a congestion fee or a cap.

 

AVs and Real Estate – A Guide to Potential Impacts

We have gotten a number of questions about how AVs could be affecting real estate and thought it would be good to do a post that covers some of this.  Below is a brief list of issues to consider.  Look out for an upcoming post that will add e-commerce and sharing economy impacts as well.

  • Parking – if we move towards an even partial model of shared vehicles (i.e. Lyft, Uber, Via, Chariot) there will be a substantial reduction in the need for parking (see earlier posts here and here). Studies have shown this dropping down to as low as only needing 10-15% of current parking spaces (and here). This change would open up a tremendous amount of land for redevelopment (parking is the single largest land use in most cities), hence dramatically increasing supply and – one would think – decreasing land values.  In addition, as parking needs diminish and parking regulations move to requiring less – or no – parking, constructions costs will also drop dramatically.  Parking can cost about 4k$ per spot for on-grade parking and up to 18-20k$ per spot for structured parking, can be a significant proportion of construction costs, and typically requires additional land acquisition.
  • Sprawl – several studies have shown that AVs could increase suburban sprawl as people can drive further, faster and might be willing to accept a longer commute as they can now use their time in the car for things other than driving. If that is the case, there will be an increased pressure on sprawl and the metropolitan footprint would expand dramatically.  Again, this constitutes an overall increase in available/feasible land supply which – given the rules of economics – lead to a drop in land value.  Arguably, this would not be the same everywhere as land that will have all of a sudden become available for development would see large price increases while places that are already close enough or within to cities would see land prices drop due to increased competition.
  • Housing Prices – Given the points above, housing prices should decrease. As land prices and construction costs drop, housing rents and prices will also drop.  This could be a boon for affordable housing concerns across the country (for example, each parking spot included in rent equates to about 225$), but could also cause substantial disruptions to existing markets and developments/projects.
  • End of TODs? – One unknown effect of AVs will be how it changes transit. On the one hand, this new technology could be a boon for transit as it helps solve transit’s perennial first/last mile hurdle. Lyft can get people to the train, light rail, or bus station, increasing catchment areas and boosting ridership.  On the other, riders may simply decide to stay in that Lyft all the way to their destination – especially as the price of the trip drops dramatically as technology replaces the highest cost of the trip – the drivers.  Preliminary reports from New York and San Francisco point to this trend, with transit ridership diminishing as Transportation Network Company (TNC) use skyrockets. Some studies have shown a decrease of up to 43% of transit ridership – potentially the death knell of transit as we know it.  In addition to this concern, is simply the potential atomizing of transit.  What happens when multiple rider/route services such as Via and Chariot (or Lyft-line and Uber Pool –  the carpool versions of Lyft and Uber) grows and we now have 8-12 passenger vans zipping through cities, delivering people directly to where they want to go and not to a bus stop a few blocks or a few miles away. If this happens, the activity/energy clustering and focusing role of transit would diminish as would the price premiums that are associated with transit proximity and transit oriented development.
  • Location, Location, Location? – A looming question with not only AVs but the entire shift to mobility as a service is that mobility will become easier and more affordable. As that happens, the friction of transportation – which is one of the factors that creates the value of location – will diminish.  This does not necessarily mean that current activity centers and draws will reduce in value, but any value based solely on the broader proximity aspects of location may diminish.  This will increase the role of the quality of places and the buzz of related activities in determining location value.

A significant issue to consider in all of this is not only the end state change of AV impacts, but also the transition period.  In terms of real estate, a glaring concern would be projects caught during this time.  Projects that have built parking in consideration of today’s reality may find themselves with decreased parking revenues (that is already happening with Lyft and Uber) and unable to repay long-term mortgages or bonds.  In addition, these projects will be competing with future projects that did not need to build parking and/or benefited from reduced land costs.  The last projects built with today’s constraints – and not future-proofing the coming disruptions – will be the ones most punished by this rapid change.

All of this points to a dramatically shifting landscape for real estate.  A large question is both what direction these changes will take and – as importantly – how quickly will they come about.  Of concern is not only the shifting market conditions, but also the regulations that currently help shape that market and the speed at which those typically change.  What happens if parking utilization needs drop dramatically over a short period of time.  How quickly will parking requirements shift with that? And what kinds of political battles will meet these changes as developers and property owners with existing properties fight these changes to protect their competitiveness.

Looking Beyond the Personal AV to See a Larger Potential for Citywide Connectivity

The shape of our current urban spaces and transportation networks are shaping up to strongly influence the approach cities and countries are taking toward AVs. The American influence on AV developing, not surprisingly, is pushing somewhat toward a personalized vision of AVs. A number of European countries and cities are taking a more public transit-oriented approach to AV development.

A recent article in the New York Times dives into these differing approaches.

“The coming age of driverless cars has typically centered on Silicon Valley highfliers like Tesla, Uber and Google, which have showcased their autonomous driving technology in luxury sedans and sport utility vehicles costing $100,000 or more. But across Europe, fledgling driverless projects like those by Deutsche Bahn are instead focused on utilitarian self-driving vehicles for mass transit that barely exceed walking pace.

The article further points out that AVs in combination with existing public transit systems have the potential to greatly “reduces the complexity required to make the machines navigate across an entire city.”

AV technology has the potential to extend beyond vehicles on roadways, as a number of Dutch cities are realizing. A number of leaders in that country see a future with “driverless boats” that can ferry passengers around the city and potentially “autonomous boats will be able to automatically dock with each other, creating on-demand bridges and walkways whenever necessary.”

AV Micro-Transit Could help TOD and First/Last Mile

One of the larger concerns with the rise of AVs and ride-sourcing services has been its potential drain on transit riders that could  – even with only a draw on few riders –  make transit itself economically infeasible.  This article from the New York Times discusses the development of AV micro-transit 12 person shuttles that might be just the boon transit has been looking for.

These shuttles are being developed in Europe and focus on slow (20 mph), limited range travel.  While these shuttles would never be able to provide desirable alternatives for cross town trips, they are ideal for getting people to and from transit.  Due to the shared destination/origin point of transit, this type of shared mobility on demand would greatly extend the catchment and draw of main line bus and rail transit.  The limited areas it would travel to and from (around a transit stop) make the technology much easier to attain in the near term.  This provides a hopeful version of the future where AVs might actually help transit oriented development instead of destroying it.