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Urban Transit (1)

Oct 16, 2016

Will ride sharing overtake car sharing? Will the both of them undermine public transport? Will ride- and car sharing reduce car ownership and lead to dwindling car sales? Trends and paradoxes - the findings presented below were all taken from surveys conducted this year.

Ride sharing vs car sharing vs car rental
Researchers at DePaul University found that taxes on car sharing have spiked nationwide, largely the result of the notion that taxes on car rentals would fall almost entirely on out-of-towners - tourists, business travelers and conference-goers. Nearly a quarter of the country‘s forty largest cities impose retail taxes that increase the costs of a one-hour car share by more than 30 percent. Many impose $2 to $4 transaction fees, which were originally created to generate revenue from conventional car rentals. Together with the increased competition from ride-sharing services, this explains the downturn in car-sharing memberships.

Sherpashare found that in ten U.S. cities it surveyed (Austin, Boston, Chicago, Dallas, Washington DC, Orange County, Los Angeles, San Diego, San Francisco, Phoenix), the average trip distance increased by 13 percent, while the national average trip distance increased by 12 percent. The explanation for this increase? Most of the time, Uber (and Lyft) will launch in a new market and after a few months will expand coverage into surrounding neighborhoods. Uber launches in this manner to ensure an adequate demand of rides in the area covered and enough drivers to meet this demand. While 12 percent may seem a lot, the national average trip distance is 6.4 miles, so 12 percent is only about three-quarter of a mile. Drivers may earn another 50 cents or so from the extra mileage, which amounts to about a 5 percent increase in the total trip fare. What was most interesting was that, while average trip distance has increased by 12 percent, the average trip time only increased by 3 percent. This results in a 9 percent average trip speed increase. This was calculated by dividing the average trip distance by average trip time. The explanation for this increase in speed? This may be a result of the locations of expanded coverage areas - longer trips that involve more use of highways for example, increasing the overall trip speed.

Car sharing vs car ownership
"Your car is arguably one of the most underutilized, polluting, time-consuming and dangerous machines on Earth," says Adam Jonas, head of global auto research for Morgan Stanley. “Consider that cars on average are in operation for only about an hour each day, but they account for 45% of global oil demand." Jonas thinks we are ripe for a dramatic change. Simply use the rate calculator on the Uber and Lyft websites to get projected fares for all the trips you know you’ll be making. If you group most of your visits, so you are in the same parts of the city each day, then ride sharing beats driving a privately owned car or renting a car hands down. You’d think that car sales are on a downward slope, right?

While the commonly held notion is that ride sharing (and to a lesser extent car sharing) will mean automakers will sell fewer vehicles, instead competing in the mobility-as-a-service market, analysts at Deutsche Bank AG think that auto sales could actually rise as a result of ride-sharing. The analysts confirmed that the growth of on-demand mobility via private vehicles could initially shrink the number of cars on U.S. roads by more than 25 million, and that this will be most pronounced in densely populated areas. But the flip side is that this reduction in the number of vehicles may be offset by a much shorter lifespan of ride-share vehicles that tend to be more heavily utilized to transport people, as vehicle scrapping is determined by miles driven. Each on-demand vehicle tends to travel more miles than the privately owned vehicle it replaces. The increase in mileage is mostly due to the distance ride-share vehicles cover between individual passenger trips. The analysts found, for example, that close to 50 percent of the miles that Uber X drivers made in New York City are without carrying passengers. Of course, what Deutsche Bank says, can be offset by apps that assist the chauffeur in planning his trips more efficiently. EVs may also prove to be a game-changer in this; see picture. KPMG projects that the number of two-car households will drop to 43 percent during the next 25 years as on-demand services such as Uber and Lyft grow and more people move to urban areas. Ride-share vehicles are projected to increase to 10 million by 2040, according to KPMG.

Autonomous cars
The Boston Consulting Group predicts that autonomous vehicles could have a greater impact on vehicle sales than car sharing. The number of U.S. families with two or more cars is declining in major cities, thanks in part to ride sharing services. ZipCar founder and former CEO Robin Chase says that self-driving vehicles enable cities to reinvent themselves. Think of mobility that is less polluting and shorter transit times as people will share cars and rides. However, plan this wrongly, and the city may be worse off. "We’ll end up with more congestion, millions of unemployed drivers, and a huge deficit in how we fund our transportation infrastructure", she warns. "Picture zombie cars - those with no one in them - clogging up our cities and our roads, because it will be cheaper to keep them moving than to pay for expensive urban parking, and cheaper to bring retail to a customer than to pay rent on a retail store." Click on NEXT to read how personal transportation may influence community transport.

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