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The Rise Of The Sharing Economy

Ridesharing Can Save Cities from Traffic Congestion

My first experience with ridesharing came in 2011 when I lived and taught in a low-income barrio of Bogotá, Colombia. No city buses ventured to my neighborhood. To get to and from work, I depended on what I dubbed the “Jalopy Express,” which entailed waiting by the roadside and hailing unmarked clunkers when they passed by. If I was lucky, one would stop just long enough for me to jump in, where I would sit crammed alongside one too many Bogotanos. When I wanted to exit the vehicle, I yelled “¡parada, por favor!” and hardly had both feet out the door before the jalopy sped off.

While Bogotá had some semblance of a public transportation grid in its wealthier northern neighborhoods, those living in the poorer south relied on the Jalopy Express and a few colectivo (private buses) to get around. This nascent form of ridesharing helped to solve the several transportation problems the city was unable or unwilling to solve.

In the United States, though most cities have much more developed transportation grids than those in developing countries, the average commuter still loses 34 hours a year to congestion delays, according to Deloitte. This translates to 4.76 billion hours wasted by all American commuters, and results in $429 million in opportunity costs every day (or $160 billion annually).

And this inefficiency costs taxpayers, Deloitte says. Every twenty-mile commute costs the government one dollar. If you include the cost of congestion, air pollution or lost property values near roadways, the total estimated external cost of driving is between $0.27 and $0.55 per mile.

There is an ongoing public debate over what government should do to alleviate traffic congestion. Some have proposed adding high-occupancy vehicles (HOV) lanes to roads, while others push for expensive public transportation networks. Though variations of both have been implemented in various municipalities, traffic and the cost of commuting continues to increase.

Enter ridesharing. In recent years, Lyft, Uber, Sidecar and many others have gone from cult followings to being nearly ubiquitous in the cities in which they operate. While taxicabs have been particularly vocal about their disdain for what they deem to be “road bandits,” ridesharing could help reduce traffic congestion by making use of empty seats in cars. Harvard Business Review estimates that “shifting about 15 percent of drive-alones to car sharing or ridesharing could save 757 million commuter-hours and about $21 billion in congestion costs annually.” HBR says achieving these savings through traditional means could require billions of dollars of infrastructure investment.

Many in business and government already have thrown their lot in with ridesharing. Earlier this year, Google Ventures and TPG Capital invested $258 million in Uber, and Lyft has received $82.5 million to-date. On September 19, the California Utilities Commission (CPUC) voted unanimously to legalize ride sharing in California.

A San Francisco start-up called Leap Transit is trying to take ridesharing a step further by offering a private alternative to public buses. Through a smartphone app, users can book, track and pay for bus rides. The company already has come under criticism for exasperating San Francisco’s already epic inequality by segregating wealthy techies from, well, everyone else. Leap Transit also makes use of bus stops reserved for Muni, San Francisco’s public bus system, which could lead to public transit delays.

But city officials say there is room for both public and private transportation services.

“We welcome private efforts to sustain public transit in San Francisco as long as they're willing to follow traffic and safety rules," said Paul Rose, a San Francisco Municipal Transit Authority (SFMTA) spokesperson. “There's a need for all of us to share the same roadway."

Based in San Francisco, Mike Hower is a writer, thinker and strategic communicator that revels in driving the conversation at the intersection of sustainability, social entrepreneurship, tech, politics and law. He has cultivated diverse experience working for the United States Congress in Washington, D.C., helping Silicon Valley startups with strategic communications and teaching in South America. Connect with him on LinkedIn or follow him on Twitter (@mikehower).

Mike Hower headshotMike Hower

Currently based in Washington, D.C, <strong>Mike Hower</strong> is a new media journalist and strategic communication professional focused on helping to drive the conversation at the intersection of sustainable business and public policy. To learn more about Mike, visit his blog,<a href="http://climatalk.com/&quot; > ClimaTalk</a>.

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