Will public transit benefit from the rise in carpooling prices?

Moses Nakamura has always preferred to take public transport or a bicycle to get to rideshare services, but he used Lyft when he was late or when he needed to reach a corner of New York without being hit by public transport. . In recent weeks, however, rising prices have distracted him from running.

“After being vaccinated, I started taking the train more often and [rideshare] cars, ”says Nakamura, a software developer who lives in Manhattan. “On several occasions it was attractive to take a [Lyft] because I wanted to go faster somewhere, but after looking at the price, I changed my mind.

Cycling prices have exploded in recent weeks. Vaccinations allow people to resume their normal activities, which in turn generates an increase in demand. Meanwhile, the supply of drivers remains limited, with many having switched to driving for food delivery services during the pandemic. The shortage of makeshift gas in the south and east has also pushed up prices.

The peak has made headlines across the country, from Charlotte to Boston to Chicago. Some transportation experts predict that rising prices could push hesitant users back to public transit, where ridership has fallen in unprecedented and sustained ways.

“People are price sensitive,” says Megan Ryerson, professor of transportation at the University of Pennsylvania. “If taking an Uber costs a lot more than expected, it could encourage more people to use public transport. This moment is a good reminder that these are for-profit businesses, not a utility, and these prices can go up at any time. “

A sustained price spike could be particularly helpful for transit ridership in some of the nation’s largest cities, particularly New York City, where transit was an essential part of life before 2020.

That being said, it’s not a panacea for struggling transit systems. Not everyone returned to work in person. Some are nervous about entering tight spaces with strangers.

“There are probably a lot of people who are still cautious in the subway and I don’t think they will change their minds in any dramatic way because the car prices are higher,” says Arun Sundararajan, professor of technology, d ‘operations and statistics. at New York University.

What is driving the price increase?

Nakamura first noticed the extreme price increase when he tried to book a ride from West 60th Street to South Street on the Lower East Side of Manhattan, which would take around 30 minutes. The cost listed was $ 58.47 before tip, about three times the price he expected. He had a similar experience visiting the Washington, DC area, where an eight-minute ride would have cost $ 30. He chose to take the metro instead and be a little late.

“It was shocking,” says Nakamura. He notes that a cost reduction opportunity in the past was a feature that allowed users to share a ride with a stranger. “It’s not really an option at the moment, so that also makes it more expensive.”

Rideshare companies are well aware of the imbalance between supply and demand. An Uber press representative said the company did not have details of price changes in specific cities. In a disclosure form in mid-April, the company said it was looking to increase incentives to attract drivers. “As vaccination rates increase in the United States, we are seeing consumer demand for mobility recovering faster than driver availability,” the paper reads.

Lyft did not immediately respond to requests for comment.

Will the runners come back?

Following previous declines in public transport use, riders have been inspired to return to trains and buses when faced with price shocks with other types of transport. After a dip in transit ridership during the 1960s and 1970s, riders returned to urban systems and the new Amtrak intercity train once gasoline prices soared. Similar effects were seen due to the rise in gas prices about ten years ago.

But the gains that transportation systems are seeing from rising prices for Uber and Lyft may not be enough to restore pre-pandemic ridership. The oil crisis of the 1970s lasted for years. On the other hand, it is not at all clear how long the dynamic which currently leads to an increase in transport costs will last. The gas shortage created by ransomware, after all, was short-lived.

Transit ridership levels, meanwhile, could face a long-term challenge that even a sustained rise in the price of carpooling might not facilitate. If a substantial percentage of white-collar workers never return to the office and more only return three to four days a week, tariff revenues may not recover. Commuter train systems would be particularly devastated by such a dynamic, but subways, light trains and buses would also suffer – although the $ 30 billion included for transit in the March stimulus package will certainly help. short term.

There is also the question of how long it will take people to feel comfortable again in cramped environments.

“It’s hard for me to imagine that we will return to the crowded subway cars we used to see before the pandemic,” says Sundararajan.

According to Sundararajan, the pandemic accelerated trends were already in motion. Alternatives to public transport in large urban areas were already on the rise, from sharing bikes and scooters to large carpooling companies. In a society where car ownership is the norm, it will always be a challenge for transit systems to gain market share.

No surge in carpooling prices will change that, argues Sundararajan.

“It’s hard for me to imagine that these new big cities or these small towns that might consider transit options could justify the costs,” he says. “The future of public transit does not look bright.”

About Kevin Strickland

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