Silicon Valley Is Having a Meltdown Because It Can’t Use Uber and Lyft at SXSW

How do I move?


Last May, voters in Austin, Texas, backed their city government’s hard line on background checks for Uber and Lyft drivers. Both companies exited the city immediately, putting regular users of the ride-hailing services in a fix—and leaving more than 10,000 drivers high and dry.

What has happened since has been considered a free-market success story, as the absence of the Silicon Valley duopoly made room for a handful of newer alternatives—by August, 10 licensed ride-hailing services had registered drivers with the city. “Austin is showing the world that yes, there is life after Uber,” CNN Money trumpeted on March 8. “And it’s pretty good.”

And then came South by Southwest, which brings about 70,000 people to downtown Austin each March. On Saturday evening, outages hit the new taxi startups, and overwhelming demand cascaded from one broken app to the next, leading to a ride-hail breakdown and conferencewide freakout.

And lo, the elites called out in one voice, and what they said was: Where the hell is my Uber?

“Austin is broken without Uber or Lyft,” tweeted Ryan Hoover, the founder of ProductHunt.

TechCrunch summed up the view from Silicon Valley. “Austin definitely missed its chance to prove that cities are ready to fully-function without Uber or Lyft,” a reporter wrote.

It was a convincing demonstration of how thoroughly Uber and Lyft have pervaded the habits of high-level American executives. According to Certify, a company that analyzes business expenses, business travelers in the fourth quarter of 2016 spent more than half of all ground transportation expenses, including rental cars, on Uber alone. It has been only six years since Uber launched in San Francisco, and already, its absence is like a phantom limb making founders writhe in frustration. In this wholesale class allegiance to a single transportation company, however, these people are outliers. Only 15 percent of Americans had ever used a ride-hailing service as of last year, according to Pew.

The outrage is dumb: Cities don’t function so differently now, by any metric, than they did before the ride-hailing apps debuted five years ago.

But it’s also pernicious. It also illustrates how a happy reliance on Uber has blinded a whole group of influential Americans to a real mobility crisis in the U.S. that is getting worse, not better. For people without a car, the American city hasn’t been fully functioning for more than 50 years. Recent downtown improvements like streetcars and bike shares do little to address the transportation challenge of job sprawl. Bus ridership is plummeting nationwide; ridership on the nation’s second-busiest heavy rail system has fallen by 14 percent. For people who don’t drive, transportation networks are not getting them where they need to go. And no, ride-hailing services, no matter how much they subsidize fares, can’t fill that gap.

Planners like to debate the extent to which the rise of ride-hail and the decline of transit are related. I tend to think transit’s wounds are mostly self-inflicted. But ride-hail takes advantage of those shortcomings, pitching itself to regulators, investors, and consumers as a necessary patch for ailing transportation networks.

And the outburst from SXSW reminds me that so many loud voices don’t just not participate in that conversation about general mobility improvements in cities, they’re not even conscious of its existence. They think a city like Austin could reach “full function” with a handful of multinational taxi companies. They didn’t even think to complain about how Austin’s transit system has cut service in recent years, and ridership has fallen along with it—down an astounding 12 percent in 2016. Looking for a bus isn’t an instinct they have anymore.

It may be naïve, but I’d like to think that the culture of armchair transit experts agitating for better service has some incremental political effect in New York, creating a grassroots knowledge that filters up and out through reporters and political staffers.

I doubt the panelists of South by Southwest would ever have been lining up for Cap Metro bus service, even if the alternative was to call a taxi service. But would it kill them to complain about it? Among large U.S. cities, only San Juan lost more transit riders than Austin last year. That’s a problem that the problem-solvers at SXSW could turn their attention to.