A new Bloomberg report details Uber and Lyft's various partnerships with small local public transportation agencies in the US. In 2014, the local government in Pinellas Park, Florida nixed two of their least-travelled bus lines because of huge budget cuts. To compensate for that loss, the government then struck a deal with Uber to aide residents with the cost of their trips along those routes. The pilot program, reports Bloomberg, gives residents a 50-per cent discount with a maximum of $US3 ($4) per trip. (I can't speak the average cost of an Uber ride in Pinellas Park, but this seems like a very minimal subsidy to me.) Images: Getty
Partnerships like these, so far, exist in sparsely populated suburban areas with low ridership. Adie Tomer, a fellow at Brookings Institution's Metropolitan Policy Program, told Bloomberg that partnering with Uber and Lyft is particularly attractive to these types of local municipalities because of how expensive it is to run public busses. The program in Pinellas Park costs $US40,000 ($52,078), which is a quarter of what it cost them to run those two bus lines. This month, the government has started offering to subsidise all rides in the county that end at one of 20 designated bus and light rail stops. "It's not supposed to be something you'd take instead of the bus; it's supposed to be something you'd take to the bus," Ashlie Handy, a spokeswoman for the Pinellas Suncoast Transit Authority, told Bloomberg. The PSTA has also offered to pay for low-income residents' Uber rides after 9:00PM.
A similar program has been launched in the neighbouring town of Altamonte Springs, as well as one in Centennial, Colorado. The Centennial program will partner with Lyft instead of Uber. Miami-Dade county also hopes to use $US575,000 ($748,621) of a US federal grant for public transportation on Uber and Lyft subsidies.
Although partnering with Uber and Lyft might save local governments money when it comes to public transportation, these programs could lead a number of major issues. They are, first off, inaccessible to anyone without a smartphone -- as of 2015, 64 per cent of Americans own a smartphone. They also don't guarantee accessibility to people with disabilities. Furthermore, they effectively replace good, salaried public sector jobs with contract work. In April, Uber settled two class action lawsuits with its drivers for $US84 million ($108 million) which let the company keep them as contractors instead of employees. Even though $US84 million ($108 million) seems steep, paying out those settlements was completely worth it for Uber.
Had the company been forced to consider its drivers actual employees, it would have been obligated to pay each of them minimum wage and social security. Uber's business model -- "the sharing economy" -- relies on these low labour costs.
Replacing portions of public transportation with Uber and Lyft is a slippery slope, not only because of how it will affect public sector jobs. Public transportation fundamentally exists to serve the subsection of the population who cannot afford to own cars or take cabs. Giving someone $US3 ($4) for part of an Uber ride instead providing busses seems like a pretty shitty deal for any Pinellas Park resident who relies on public transportation. Uber isn't replacing busses, but instead providing an alternative that shifts more of the transportation cost onto individuals. Well, that's capitalism, you might say. Yes, it is, but public transportation is supposed to exist for the public good, not for profit. At the risk of sounding like an first year university student, I gotta ask, shouldn't the government be serving the people not CORPORATE INTERESTS?
There is, inevitably, a startup that offers an alternative option for local governments looking to partner with private businesses. Bridj is a company that runs private bus services that is run a differently than Uber and Lyft; it fancies itself "the world's first pop-up mass transit system" and instead of having vehicles on any set line, "optimise[s] pick-ups, drop-offs, and routing." The company currently operates in Kansas City, Washington DC and Boston and claims that the cost of a ride with its service is between $US2 ($3) and $US6 ($8). Bridj recently sold 10 busses to Kansas City Area Transportation Authority. The KCATA will "staff them with drivers, and set and collect fares," according to Bloomberg, so the service isn't working to eliminate public sector jobs. Bridj's CEO, Matthew George, reckons this a good marriage of public and private interest:
On the one end of the spectrum you have the very traditional mode that we've done for 100 years, and on the other one, you have this Ayn Randian free market free-for-all that doesn't have basic protections in place for the people who are most vulnerable. We've shown that there's something in the middle.
All these programs are still in their infancy, so only time will tell how it all plays out. But entrusting a public service to private institutions that prioritise the pursuit of capitalism over the public good is, nevertheless, a big risk.