SOURCE: Morningstar

DATE: February 14, 2020

SNIP: Five years ago, Travis Kalanick was so confident that Uber Technologies Inc.’s rides would prompt people to leave their cars at home that he told a tech conference: “If every car in San Francisco was Ubered there would be no traffic.”

Today, a mounting collection of studies shows the opposite: Far from easing traffic, Uber and its main rival Lyft Inc. are adding to congestion in numerous U.S. downtowns.

Officials in San Francisco, Chicago and New York have cited congestion as the main rationale for new fees they recently enacted on Lyft and Uber rides in each of the cities. Other regulators around the country are considering similar fees. Uber and Lyft no longer pledge ride-hailing will reduce traffic, acknowledging that they add to congestion, though they say some studies overstate their role in the problem.

The app makers initially thought their technology would create seamless trips, with four strangers forsaking their own cars for a shared ride. Cutting-edge algorithms, they believed, would steer behavior through pricing and route-matching, letting drivers spend little time between trips. Riders leaving their cars at home would then increasingly hop on buses, bikes or walk in a gridlock-easing ripple effect.

That utopia hasn’t come to pass.

Most users take their own private Lyfts and Ubers, shunning pooling even though it costs them more. Rather than the apps becoming a model of algorithm-driven efficiency, drivers in major cities cruise for fares without passengers an estimated 40% of the time.

Multiple studies show that Uber and Lyft have pulled people away from buses, subways and walking, and that the apps add to the overall amount of driving in the U.S.

A study published last year by San Francisco County officials and University of Kentucky researchers in the journal Science Advances found that over 60% of the slowdown of traffic speeds in San Francisco between 2010 and 2016 was due to the introduction of the ride-hail companies.

In Chicago, the companies have been “creating exponential growth in congestion in the downtown,” said Dan Lurie, policy director in the mayor’s office. Last month, the city started charging a new fee on every ride-hailing trip to mitigate traffic.