Moneybox

Uber Is Declaring War on… Cars

A row of Jump bicycles outside a train station in San Jose.
What if San Jose transit commuters used Uber’s bicycles instead of that massive parking garage in the background?
Uber

Uber, the company that provides 15 million private car rides a day and is widely suspected to be eroding mass transit ridership in the United States, says it is joining the war on cars.

On Wednesday, the San Francisco–based startup announced it would commit $10 million to lobby for policies that “put the long-term public interest over maintaining the mobility status quo, even when doing so is politically difficult.” Among the guidelines for that spending, according to a manifesto the company signed onto earlier this year: advocating for shared ownership of autonomous vehicles, putting space for people over space for cars, and discouraging single-passenger taxis.

A company publicly repudiating its main product is not something you see every day; it’s as if General Mills announced it would spend millions to discourage people from eating cereal with milk. But it also builds on a message the company has been developing since founder Travis Kalanick’s departure last summer: This isn’t the Uber you used to know. CEO Dara Khosrowshahi, who took over when Uber was known for browbeating public officials, flouting the law, and running ads dissing public transit, wrote in a release on Wednesday: “We are in a unique position to have a meaningful and positive impact on the communities we serve across the globe—a responsibility we don’t take lightly.”

More substantively, the sustainable transportation fund is one of a number of projects Uber announced on Wednesday that indicate its interests in reducing private car ownership, building off its acquisition of the electric bike company Jump and its investment in scooters.

“More people in more efficient vehicles, and out of vehicles altogether, that’s how I’d summarize it,” said Andrew Salzberg, the company’s head of transportation policy and research. In addition to supporting congestion pricing in New York, which would put a toll on all cars (including Ubers) entering Manhattan south of 59th Street, Salzberg says the company will advocate for giving priority to transit on city streets and eventually for revising more engrained car-centric policies like parking minimums, through which cities require commercial and residential developers to build parking spots. “People say things like, ‘We don’t need to invest in transit because Uber and autonomous vehicles are going to make it irrelevant.’ We don’t say that. So we want to make a forceful statement to say the opposite.”

Other initiatives are underway. Uber will share more fine-grained data on vehicle speeds with cities, which will help with traffic planning. It’s working on a portfolio of urban planning reports, beginning with the development of a “curb productivity index” to measure how many people per hour make use of curb space. (A bus stop scores high. Bike-share scores high. An Uber pick-up and drop-off zone also scores high. Long-term car parking scores low.) In Sacramento, the company will install 300 e-bike charging stations around transit stations by the end of the year to promote the bikes as a short-trip replacement for Uber cars. That strategy has been working in San Francisco, where the company’s bikes are eating its car trips.

It would be easy to dismiss all this as an exercise in greenwashing, a handy PR campaign to obscure the fact that Uber is likely putting hundreds of millions of additional car trips on the road and contributing to the country’s largest source of greenhouse gas emissions. Rather than entice Americans to give up their personal cars, Uber and Lyft right now seem to be encouraging them to give up their bus passes. And on top of it all, $10 million really isn’t much—just a quarter-penny for every Uber ride taken last year.

On the other hand, Uber has reason to be wary of its own status quo: If driving and parking your own car continues to be as cheap and easy in U.S. cities as it is now, then there’s a limit to how necessary Uber can ever be. As long as most Americans have free parking at home and at work, what is Uber besides a service for drunks and frustrated, moneyed bus riders? The company’s astounding valuation obscures the fact that only about 1 in 4 Americans has ever used a ride-hailing service, and its pool of regular customers is closely linked to personal car ownership and use.

Moreover, Uber continues to lose money, in part because its fares don’t cover payments to drivers (who still, by many accounts, don’t make a living wage). For years, the solution to that imbalance was thought to be the company’s investment in autonomous vehicles, which don’t require humans to drive them and be paid for it. Deploying AVs was “existential” for Uber, Kalanick often said. But after a fatal collision in Arizona, the company does not seem close to taking drivers off the balance sheet. Unless, of course, it could convert millions of short-distance trips to a cheaper mode of transportation … like bicycles and scooters, whose unit economics appear to be very, very good.

All that, I think, means that Uber is genuinely interested in making American cities easier to get around without a car—and perhaps, to a lesser extent, harder to get around with one. It’s a philosophy born of self-interest, which is why I think it’s sincere. The question is whether cities, after fighting with Uber for years, would like to work together.