Transportation
January 9, 2018

Item from Ian: Race and Ride-hailing

Ian: So much for us not having ride-sharing in B.C.   But in many ways, this suggests the pitfalls of any ‘sharing’ company: no regulation which mandates any form of equity.

 

On Monday, as the provincial government discussed the future of ride-hailing in British Columbiaseven illegal ride-hailing services were already up and running around the province.
Five of them were operating in Richmond alone, according to the BC Taxi Association. …
An Audi A4 eventually arrived to pick up its fare. But the driver wouldn’t take this one.
“The driver said the company running the app asked them not to take any Westerners, or, say, non-Chinese riders,” Qi explained.
The City of Richmond is aware that these services are operating in the Vancouver suburb.
City Spokesman Ted Townsend said the company would never receive a business licence.
“There’s no legal framework under which they would operate,” he said.

Price Tags: Representatives, spokespeople and citizens, whether from the business community, Richmond, the Chinese community or the Province, need to get a hold of this issue – whether the transportation and regulatory implications, or the emergence of services which discriminate on the basis of ethnicity.  This kind of thing can be, in the wrong circumstances, explosive. Read more »

From CBC:

According to a study from RethinkX, an independent think-tank in San Francisco, greater demand for electric cars, coupled with increased demand for ride sharing, will eventually eliminate the need for dealerships altogether.
The authors of the report — technology investor James Arbib and Stanford University economist Tony Seba — aren’t the first to prognosticate the death of dealerships, but it is the speed with which they think it will happen that is notable.
They believe it will occur in the next seven years….
They estimate the tipping point will occur once the electric vehicle battery range surpasses 320 kilometres and electric car prices drop to the $20,000-dollar range. Currently, a low-end electric vehicle costs somewhere in the $30,000 range. …
Automotive experts agree that all roads lead to electric, but the road there could be long and winding.
“There are some serious question marks and a lot of assumptions in the report,” said Dennis DesRosiers, an Ontario-based auto industry analyst.  …  DesRosiers likens this report to the mass optimism around hybrid vehicles. When they were introduced 17 years ago, the thinking was they would account for half of the cars sold by 2020.
“The reality is, after 17 years, they account for less than one per cent, with sales in the last four years going down,”  DesRosiers said.
That’s why he doesn’t think dealerships will soon join the list of businesses lost to advancing technology, like video rental stores. …
Arbib and Seba are nonetheless confident of their forecast, and believe that changing attitudes to car ownership will ultimately imperil dealerships.
Again, it all comes down to economics. According to their report, “Using transport as a service will be four to 10 times cheaper per mile than buying a new car, and two to four times cheaper than operating an existing paid-off vehicle by 2020.”
It will basically be cheaper to ride-share than keep a car (or two) in your garage.

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On Tuesday I cracked myself up in prep for an evening with Janette Sadik-Khan (JSK), former NYCDOT Transportation Commissioner and author of Streetfight: Handbook for an Urban Revolution. Here are the highlights.
Whether you livestreamed it under the covers or attended at the Vancouver Playhouse, you probably had at least one moment of inspiration, imagining the delight that street transformation can bring to where you live. What if the City of Vancouver became the largest real-estate developer in town like JSK was for NYC?
Her statistics were all US based but we’re used to that. When we translate their numbers to our population, the information is uncomfortably more relevant than we would like. She included in her slides pictures of Vancouver and local examples to go with them. For those of us who attended her last visit, a few of the NYC successes were the same and still had a stunning, audible impact on attendees; she has more data to back her up now. She is confident and motivating.
Gordon Price is consistently a top-notch moderator and interviewer. He was a gracious Canadian host, animated, and entertaining. He had a great rapport with JSK. Price asked the pertinent questions and got solid answers.
What’s as interesting is who attended. At $5 a ticket, there were all ages and abilities present. I wondered how many business owners or BIA staff were there. Did Nick Pogor attend?
Unfortunately, I didn’t catch all of the electeds who introduced themselves from my perch on the balcony. I was pleased to see Vancouver’s Deputy Mayor Heather Deal front and center, who is also a Councillor Liaison to the City’s Active Transportation Policy Council and Arts & Culture Policy Council, among others. It was announced for the first time publicly that Lon LaClaire is the new City of Vancouver Director of Transportation. He introduced JSK. At least one Park Board Commissioner attended.
There was at least one City Councillor from New Westminster, Patrick Johnstone there – a fan of 30kph. I was tickled that Nathan Pascal, City Councillor for Langley City was there in his first week on the job! I was even more delighted to hear that the Mayor of Abbotsford Henry Braun was there. It symbolizes a shift in decision-makers toward at least open ears and at most safer, healthier city centres in the Lower Mainland.
The first rule of Hollywood is: Always thank the crew.
JSK started by thanking the 4500 within New York City’s Department of Transportation. She acknowledged that they implemented the changes her team tried – often quickly. Being fast and keeping the momentum up is key.
Interview well. Be yourself. Be bold.
When JSK was interviewing for the top transportation job with then NYC Mayor Michael Bloomberg, he asked: Why do you want to be Traffic Commissioner? She answered: I don’t. I want to be Transportation Commissioner.
 
A City’s assets – the public realm – need to reflect current values. Invest in the best use of public space.
JSK on streets: “If you didn’t change your major capital asset in 50-60 years, would you still be in business?”
“We transformed places to park [cars] to places people wanted to be…we created 65,000 square feet of public space with traffic cones.” “Broadway alone was 2.5 acres of new public space.”
JSK talked about the imbalance between the space for cars and space for people. Crowded sidewalks of slow walking tourists that fast-walking New Yorkers were willing to walk in car lanes to pass or avoid. In Vancouver, we already see this imbalance in our shopping districts and entertainment corridors.
She appreciated working for a Mayor who would back her up on her bold suggestions and who asked her to take risks because it was the right thing to do.
 
Consultation + Visualization = Education + Transformation
People find it hard to visualize from drawings and boards. Create temporary space and program it.” Basically: traffic cones, paint, and planters are your friends.
“We need to do a better job of showing the possible on our streets.”
“Involve people in the process…Just try it out. Pilot it.

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We have been talking about the virtual and sharing economies and Vancouver hit a milestone today. In the parlance of Malcolm Gladwell, Vancouverites are “early adapters” to new technologies and ways of doing things. The rampant success of car sharing is a key example. Vancouver is the first city in the world to exceed 100,000 Car2Go members. Given that Vancouver’s population is 603,502 according to the 2011 Census, that means that 1 in 6 are members of this car sharing service.
And there are some fun statistics-the average trip is six kilometers and Vancouverites have driven 33.6 million kilometers since the inception of this company in 2011.
Car2Go has 1,250 Smart cars with another 1,000 vehicles offered by the other three car share companies, Evo, Modo and Zipcar.
I like the convenience of the service, and have many friends that have tried car sharing and liked it so much they sold their car. There are however challenges-for folks living outside of Vancouver and parts of North Vancouver  these cars are not readily available. To make a business out of car sharing, there needs to be higher density and a frequency of users  to make a profit. That required density is something that the other Metro Vancouver municipalities do not have-yet.
The Vancouver Sun article by Matthew Robinson  on  car share delves into the car share business, and also gives a thumbs up to the forthcoming Vancouver bike-share service.

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Ian found this in The Guardian:

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“The freeway is only an ephemeral circumstance where all cars congregate together but the purpose of travel is not the freeway, it’s when someone gets off the freeway to get to their destination,” said Brian Taylor, director of UCLA’s Institute for Transportation Studies. “The focus should be whether or not we can enable those economic and social interactions on the other end in ways that don’t overburden the environment and society.” …
“What we’re seeing is a tremendous willingness of the younger population to really adapt to this, to use these car sharing models as a way of avoiding car ownership,” said Allan Clelland, senior vice president at Iteris, a company developing new transportation technology. …
Meanwhile, those still driving cars are dealing with less traffic thanks to Waze. Experts say the traffic app has eased congestion on freeways and sped travel times for drivers, but also led to a problematic rise in cars moving through residential neighborhoods. This has angered residents, who claim the increased traffic on their quiet roads reduces their quality of life – and the real estate value of their homes – and left cities trying to figure out how to handle another entity rerouting its cars.
“You have a scenario where the government is losing control of its traffic,” said Alexandre Bayen, director of the Institute for Transportation Studies at the University of California at Berkeley.

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Full story here.

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From the New York Times:

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Eric Larsen heads research in society and technology at Mercedes-Benz Research and Development in Sunnyvale, Calif. …

The suburbs are still very important. You hear about people moving back into Detroit, but the urban areas that are growing larger in size are in the South and West, and they are suburban-born. They have downtowns, but they’re empty at night. That has implications for transporting goods and people. …

Young people have had their adulthood postponed by the recession, but most of them will still get married and move to the suburbs. They want children, and they want home-based lives. They like to have space around them. They fill up a car with kids, dogs and stuff from big-box supply stores. That means people will still want big cars. …

… there will be privately shared vehicles. We have a business called Boost, where minivans drive children after school. They are like school buses, but door to door, and parents can track them with a phone app. They have a concierge as well as a driver, because the driver can’t leave the bus and walk the kid right to the door. A 7-year-old needs that. In this case, we’re selling a mobility service rather than a product.

Mostly, we don’t think people will give up their own cars. Americans like to do everything in the cars. They eat in cars, they drink in cars, they have entertainment in cars and they change clothes in cars — people who leave the office at lunch and sleep in their cars, or wait in their cars for an hour at a time for their children.

Driving is really the distracting thing we do in cars. …

What about electric cars?

This part of the model isn’t broken for most car owners. Fracking has been a strong influence, keeping gas prices low. Internal combustion engines are getting better mileage. Natural gas is cleaner burning and is easier to install from a technology point of view. .

Refueling with gasoline is five minutes, once a week. People have anxiety around running out of fuel with electric cars. Tesla is building out a network of fast charging stations. Cities are doing it too, with charging stations at a few spots in city garages. But if electric cars become popular, are they really going to put a charger in every space in the garage? …

Wealthy people want to show that they care about saving the world. The Prius was generally bought by people who could afford a more expensive car. Tesla put that in an even sexier package — you get a high-performance car and it’s green.

One of the challenges is that luxury wants to be heavy, with better seats, more safety features, more stuff in the car. Authenticity matters too. Wealthy people want things that are natural and handmade.

In our AMG model we have an idea of “One man, one engine,” with the name of the person who made the engine on it. Leather will never go out of shoes or handbags, and probably not cars.

There’s a constant back-and-forth. It’s hard to be rich without contradicting yourself.

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Other insights here.

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Peter Ladner is impressed. From The Guardian:

Helsinki’s ambitious plan to make car ownership pointless in 10 years

The Finnish capital has announced plans to transform its existing public transport network into a comprehensive, point-to-point “mobility on demand” system by 2025 – one that, in theory, would be so good nobody would have any reason to own a car.

Helsinki aims to transcend conventional public transport by allowing people to purchase mobility in real time, straight from their smartphones. The hope is to furnish riders with an array of options so cheap, flexible and well-coordinated that it becomes competitive with private car ownership not merely on cost, but on convenience and ease of use. …

All of this seems cannily calculated to serve the mobility needs of a generation that is comprehensively networked, acutely aware of motoring’s ecological footprint, and – if opinion surveys are to be trusted – not particularly interested in the joys of private car ownership to begin with. Kutsuplus comes very close to delivering the best of both worlds: the convenient point-to-point freedom that a car affords, yet without the onerous environmental and financial costs of ownership (or even a Zipcar membership). …

Providers of public transit, though, have an inherent obligation to serve the entire citizenry, not merely the segment who can afford a smartphone and are comfortable with its use. (In fairness, in Finland this really does mean just about everyone, but the point stands.)

It matters, then, whether Helsinki – and the graduate engineering student the municipality has apparently commissioned to help it design its platform – is proposing a truly collective next-generation transit system for the entire public, or just a high-spec service for the highest-margin customers.

I’m not sure what surprises me the most: that Helsinki is taking on a project of this complexity, or that it’s being done by a graduate engineering student.

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Also, this from Fast Company:

In 2050, You Might Want To Be Living In Helsinki

Over the next few decades, Helsinki expects to add around 250,000 new residents. But the more the population grows, the fewer cars will be on city streets as Helsinki transforms itself into a network of dense, walkable neighborhoods that are virtually car-free. …

Helsinki envisions its busy expressways becoming boulevards lined with new housing, sidewalk cafes, bike lanes, and trams and buses. Residents will run everyday errands on foot or by bike; the city hopes that homes, businesses, schools, and stores will all be close enough together that many people might not even have to commute anymore.

But an expanded network of tram and metro stations will connect the entire city. New services, like a “mobility on demand” app that the city is already beginning to test, will make it simple to call up a bus, taxi, or shared car or bike, exactly when someone needs it.

Full story here.

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Unfortunately, with lots of recent transportation debate on Commercial Ride-Sharing, the lack of attention to the underlying economic theories that underpin competitive forces, regulatory dynamics, and innovation cycles is bit surprising.

First off, possibly we could start by explaining why taxis are regulated in the first place. Well, the theory identifies that where industries have a continuously perishable product (i.e. empty seats) and very low marginal costs of production at the point of service delivery, this quickly leads into destructive and fatal competition, primarily for those operators with shallow pockets. The need for both the federal and provincial government to intervene significantly with serious regulatory tools into the Port truckers dispute tells us that caution is needed before the regulatory model in transportation service provision is completely abandoned as UBER, et al, wishes us to think is acceptable.

And for further illustration, I’m currently teaching a transportation economics course this week on the other side of the planet where we use a case study from another transportation sector on exactly this subject, and what happened when the regulator failed to engage to prevent a multi-national corporation and with its deep-pockets to drive competitors out of business, and then just like the theory predicts, the remaining operator restricted output and consequently increases prices, and with the very public threat to new entrants that dare you re-enter and we will squash you too!

And so how does the theory fit commercial ride-sharing such as UBER, Lyft, etc. Well, as I have been working recently with the San Francisco airport, I have learned that the taxi industry in San Francisco has been so damaged by this destructive competition that the local market is now dominated by these commercial ride-share services – well, recent public reports indicate that UBER with its vast knowledge of local travel demand patterns, that are aggregated globally to develop aggressive strategies to generate revenues, NOW includes the practice of REMOVING capacity at SURGE times that given the UBER dynamic pricing model means paying WAY more during peak times when few alternatives exist, and with the few remaining independent operators daring not to challenge UBER in any event given the public threats of economic retaliation.

This is exactly what theory predicts will occur without a regulator ensuring market abuse does not occur – in this case, the theory in perishable markets says early predatory pricing will eventually lead to market concentration, especially where market discipline can be enforced through future threats of devastating competitive response. Might sound bit academic, but where is the theoretical analysis advanced in support of Commercial Ride-Sharing that discredits the need for economic regulation in this industry?

And while I fully support disruptive technologies, having lead my own major international program of transportation system change, such tools are no excuse for avoiding the necessary public debate on what will arise over time with their implementation. Let’s have the debate and see what works best before the taxi rules are just thrown out for sake of expediency and lack of willingness to see the many sides of this complex picture.

So from a practical perspective, for those who support Commercial Ride-Sharing, let’s consider the provision in the Vancouver Taxi Licensing bylaw that says NO OPERATOR CAN ACT AS A PUBLIC BUS SERVICE. If the Taxi regulations mean nothing to UBER, what will stop them next from just ignoring this other bit of the Taxi bylaw.

Well, if I was preparing the long-term transportation investment strategy for UBER, I would consider the real ECONOMIC prize is NOT the rather expensive practice of driving automobiles around to pick-up individual travelers, but instead to buy a bunch of cheaper passenger vans and then CHERRY-PICK high concentrations of travelers on the most lucrative transit bus routes. What an easy thing to do with an APP that says “I’m at this location, and is anybody else going to this destination soon” – well, UBER already has this APP and is offering quasi-bus services in limited US markets where no incumbent transit operator exists – but UBER is not going to wait long before it goes after trunk bus services where the pickings will be remarkably easy and highly profitable by avoiding the provision of services to those transit users who get considerable public subsidies now.

This ultimately would then leave the Transit system with the unenviable task of continuing to serve a regional network but without the revenue advantage of carrying lots of travelers on short-haul routes that make significant profits that overcome the many loss making routes.

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David, in a comment on this post – Taxi Crash – links to an article in Techcrunch by John Evans worthy of foregrounding:

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When Old-Economy Jobs Become New-Economy Gigs
… our 21st-century sharing-economy dream is beginning to look worryingly like a 19th-century robber-baron nightmare. When sharing-economy gigs supplement your income from your job, that’s great, everybody wins. But when sharing-economy gigs are your job? That’s different.As the New York Times puts it, sharing-economy workers:

are less microentrepreneurs than microearners. They often work seven-day weeks, trying to assemble a living wage from a series of one-off gigs […] With piecemeal gigs easier to obtain than long-term employment, a new class of laborer, dependent on precarious work and wages, is emerging.

Re-emerging is probably a better word. In the early 20th century, the labor movement won workers eight-hour days, weekends, paid time off, etc. Before then, most labored like serfs, working long hours all week with no job security, no benefits, no vacations, no real prospect of advancement…
…in other words, exactly what you get today when you work at sharing-economy gigs, rather than at, you know, a job. …
Don’t get me wrong. I’m an engineer. I love efficiency and optimization. But it’s hard to simultaneously optimize for both profits and people. Let’s not lose sight of the fact that algorithms which boost the former often tend to be pretty hard on the latter.
… as I’ve put it before: “sharing economy” is mostly spin. It mostly consists of people who have excess disposable income hiring those who do not. It’s hard to shake the feeling that, as in the 19th century, the world of work is dividing ever further between haves and have-nots–sharing-economy customers, and sharing-economy providers.
For haves like us, everything is awesome. And if things are rough for the have-nots, hey, that’s not technology’s fault, right? That’s a simple side effect of supply and demand, combined with, you know, healthy competition.
True, Uber and Lyft are in land-grab mode right now, and drivers are reaping the benefits. But land grabs don’t last forever, and there’s a glut of labor out there. … Once the land grabs are over, most gig workers will be trivially replaceable, or even entirely disposable–and will suffer the consequences. …
So the real question remains: is technology destroying jobs faster than it’s creating them? Are we moving from a Mediocristan world, wherein most people contribute a little, to Extremistan, wherein an ever-diminishing minority uses the lever of ever-improving technology to move the world to their liking, while more and more are excluded from jobs and must fight and scrap to get by with endless dead-end, barely-livable gigs?
That is one of this decade’s most important questions, and if the answer is “yes,” then the sharing economy is no solution. It’s barely even a band-aid.

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