Ride-hailing apps are creating an inefficient and unfair transit system

The Financial Times looks at the longer-terms effects of Uber like companies on transportation systems:

At FT Alphaville we’ve questioned the rationality of glorifying a business model (Transportation Network Companies, ‘TNCs’ like Uber) that undermines decades worth of urban planning work focused on encouraging mass transit options like buses and trains, whilst marginalising petrol-guzzling space-consuming single-occupant cars. It seems backward, to say the least.

But the tech world seems oblivious to the limitations posed by urban geometry, seemingly convinced that app-controlled taxis can overcome the space constraints of London Bridge at 5pm more effectively than non-app controlled taxis. Why this should be the case, however, is never clearly explained.

The main worry is when the investment money runs out:

According to Daus, when the low-profitability factor becomes self evident, the TNC models will have to pivot into cross-subsidisation models, effectively subsidising private transportation to dovetail into other more profitable services (from advertising, data capture or other premium services).

If for some reason people don’t go for it, say because they end up valuing privacy or advertising-free journeys over cheap rides, the TNCs will have to pivot into other service areas to stay afloat. The biggest opportunities then will almost exclusively be centred around winning valuable public contract work for marginal services.

But that isn’t even the most concerning issue. As Daus’ report warns, the real concern is that by the time market figures out how unprofitable the TNC sector is, the damage to fair and equal service provision will already have been done. The following really is the critical takeaway:

Moreover, an alarming result of the proliferation of TNCs is the undeniable adverse impact on people with disabilities, underserved communities, the environment, social responsibility, and the labor force of the so-called “on-demand sharing economy.” This report sets forth disturbing concerns of the unintended consequences for the accessibility and underserved communities due to the TNC business model, and demonstrates that the TNC template is nothing more than a privileged access model that operates to the detriment of those in most need of their services.