Current Trend and the Impact ofRide-Sharing Services:Ride-Sharing services have significantly grown since the introduction ofUber, in 2009. To date, Ride-sharing has attracted over 2 million members inNorth America and close to 5 million globally. Currently, more than half ofAmerican adults have heard of ridesharing apps like Uber and Lyft, with 15% usingthe services.Ridesharing services have some economic benefits. These services increasethe transportation options available to people and businesses and therefore theyare likely to significantly increase consumer welfare.
In addition, ridesharingcould contribute to important externalities, such as congestion and emissions.The impact on overall pollution is an empirical question because there are twocountervailing factors. The first one is that lowering the cost oftransportation is likely to increase vehicle miles travelled, which wouldincrease emissions. However, encouraging higher capacity utilization ratescould reduce emissions per vehicle mile travelled by an individual. Initialsurvey results suggest that overall greenhouse gas emissions could decline, butmuch more research is needed on actual consumer behavior to develop conclusiveestimates.
Traffic congestion occurs when the demand for space is greater than theavailable road capacity. Slower speeds, longer trip times, and increasedvehicular queues are all characteristics of traffic congestion. A significantportion of traffic in big cities, is causes by drivers searching for parking.Ridesharing gets rid of the need for parking spots because people who useridesharing instead of driving no longer need to search for these spots, andthat could reduce congestion.From a different prospective, when we studied the relationship betweenride-sharing services use and number of personal vehicles reduction, we found astrong relationship between increasing ride-sharing use and increasing rates ofvehicle reduction, 9% of ride-sharing services users indicated that they had gotrid of one or more personal vehicles in their household.
So, the morefrequently users use ride-sharing services, the more likely they were to havereduced their household vehicles. From an environmental benefits point of view,the reduction of vehicle ownership reduces total vehicle miles traveled (VMT),but it is currently unclear if the net vehicle miles traveled (VMT) adjustmentdue to the introduction of ride-sharing services has gone up or down. Rider-Sharing Services vs. RegularTaxi Services and Public Transit:Ride-sharing services entry into the market has gradually reduced demandfor traditional taxis. The number of trips by taxis in New York fell by 8%between 2012 and 2014, and the drop was even more severe in San Francisco,where use of taxis declined by 65%.
A study, performed in five major big cities,found that Uber drivers had higher capacity utilization rates than regulartaxis, and this most likely due to Uber’s more efficient ordering and pricingmethods, its larger scale, as well as inefficiencies of regular taxi regulation.Beyond Lower fares, ride-sharing services has several advantages over regulartaxis services. Instead of waiting or calling a taxi service, passengers canrequest a car through one of the ride-sharing services platforms and watch thecar’s progress towards their location. In addition, because payment transactionsare performed electronically, passengers can travel without cash or cards. Inaddition to all that, users can check the profile of the driver beforeselecting them and give their own opinion rating after the ride.
This makesthem feel safer than entering the car of a completely unknown driver. That iswhy ride-sharing services entry has made things more difficult for taxi drivers. Recent research study also foundthat travel demand growth has shifted away from public transit services towardsride-sharing services, we found that shared mobility likely attracts Americansin major cities away from bus services and light rail (6% and 3% net reductionin use, respectively), and may serve as a complementary mode for commuter rail(3% net increase in use). While many suggest that ride-sharing can becomplementary to public transit, current evidence suggests that ride-sharing istaking more people away from public transit in cities rather than addingriders. Ride-Sharing Services User Baseand Where They Are Most Common:The users of ride-sharing services tend to be younger, more educated, andhave higher incomes than the rest of the population. More than (36%) of thosebetween 18 and 29 years of age use ride-sharing services, while only 4% of those65 and older do. The use of ride-sharing service among the college educated isdouble (26%) the use among those without a college degree (13%); and the userate is even higher with those who have advanced degrees than those with abachelor’s degree.
Similarly, people with an annual household income of $35,000or less had an adoption rate of 15%, as compared with 33% of those earning$150,000 or more. Ride-Sharing are primarily available in urban areas, wherehigher population number enables higher frequency of use and utilization ratesof vehicles. That is why one-in-five urban Americans (21%) have used ride-sharingservices, as have 15% of those living in suburban areas, but on the other hand,just 3% of rural residents have used these services and more than half (54%)have never heard of ride-sharing applications. The following chart gives usdetailed information regarding the use of ride-sharing services in both urbanand rural areas according to age, education, and income. The providers of Ride-Sharing services:Theuse of ridesharing platforms is growing rapidly. Since its market launch, Uber has attracteddramatically increased the number of new “driver partners” for the basicridesharing service, from fewer than 1,000 in January 2013 to almost 40,000 new drivers starting in December 2014.
According to a study that was conductedby Uber in 20 cities in the USA, drivers’ major reason for working with Uber isbecause it allows them more freedom and independence. 9 out of 10 drivers saidthat being their boss and having the ability to choose their own schedule wasmain reason why they wanted to drive for the company. Eighty-five percent of thedrivers also said a major reason they work with Uber is to have a greaterwork-life balance. Drivers are mainly males, (7 out of 10) are working tosupport either a child or a parent living at home. In other words, Uber hasbecome a much needed source of income for a lot of Americans.
Those who havenever worked as a professional driver before make $19 an hour on average, whiledrivers who used to drive black cars professional are taking home $27 per houron average.