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DisruptiveInnovationsinRidesharing:OverviewofitsHistoryandRecentTrendsinReal‐TimeRidematching

April17,2013

SusanShaheen,Ph.D.AssociateAdjunctProfessorandCo‐DirectorofTSRC

UniversityofCalifornia,Berkeley

PresentationOverview

• Problem/motivation

• Backgroundanddefinitions

• Historyofridesharing

• Recentdevelopments

• KeyquestionsfromCPUCworkshop

• Factorstoconsider

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Problem/Motivation• EstimatedeffectsoftrafficcongestionintheU.S.in2011(TTI,2012):– Emissions:Additional56billionlbsCO2 emitted– Fossilfueluse:2.9billiongallonsoffuelwasted– Efficiency:5.5billionhoursofextratime– Cost ofdelayandfuel:$121billion(in2011U.S.dollars)

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Background

• Ridesharingapowerfulstrategytoaddressproblemsofcongestion,emissions,andfossilfueldependency– Simpleconcept:fillemptyseats,usevehicleoccupancypotential,reducevehiclesonroadway

• SecondlargesttravelmodeinU.S.at10.7%(ACS,2008)• Distinctionfromtaxis/limos

– Driver’smotivationnot‐for‐profit(i.e.,partiallycoverdriver’scost)

– Passengerhascommonorigin/destinationtodriver

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Definitions• Someexistingdefinitionsforridesharing:

– “Arrangementbetweenpersonswithacommondestination,ordestinations,withinthesameproximity,tosharetheuseofamotorvehicleonarecurringbasisforroundtriptransportationtoorfromtheirplaceofemploymentorothercommondestination….”(FloridaRegulations14‐73.002)

– “Transportationofpersonsbetweenhomeandworklocationsorofpersonshavingacommonwork‐relatedtrippurposeinavehicle….Thisexemptiondoesnotapplyiftheprimarypurposeforthetransportationofthosepersonsistomakeaprofit….”(CaliforniaPUCSection5353(h))

• Commonformsofridesharing:– Carpooling:Groupingoftravelersintoaprivateautomobile– Vanpooling:Typicallycommuterstravelingto/fromacommonemploymentcenter

sharingarideinavan

• Commercial/for‐hiretransportation:Typicallyownandmanagetheirownfleet,employtheirowndrivers

– Taxicabs:Operatewithoutprearrangement,hailatthecurb– Charter‐partycarriers (e.g.,limousinecompanies):Tripsareprearranged

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HistoryofNorthAmericanRidesharing

Phase 1: WWII Car‐Sharing Clubs(1942 ‐ 1945)

Phase 2: Major Responses to Energy Crises(late 1960s ‐ 1980)

Phase 3: Early Organized Ridesharing Schemes (1980 ‐ 1997)

Phase 4: Reliable Ridesharing Systems           (1999 ‐ 2004)

Phase 5: Technology‐Enabled Ridematching (2004 ‐ present)

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Phase1:WWIICar‐SharingClubs

• 1942U.S.OfficeofCivilianDefenseregulation

• Requiredridesharingtoworkplaceswhennootheralt.transportationmeansavailable

• Saveongasolineandrubberforthewareffort

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Phase2:MajorResponsestoEnergyCrises

• Late1960s:Employershand‐matchedemployeeswithneighbors,distributedpersonalizedmatchlists

• 1973‐ 1974ArabOilEmbargo:Shiftfromparkingsupplytoenergyconservation

• Variousfederalpolicies:– 1974EmergencyHighwayEnergyConservationAct– 1975FHWAridesharingguidebooks– 1979USDOTNationalRide‐SharingDemonstrationProgram

• HOVlanes,casualcarpooling(“slugging”),park‐and‐ridefacilities,vanpooling

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Phase3:EarlyOrganizedRidesharingSchemes• Employer‐BasedTripReduction(EBTR)programs

– Mandatoryprogramstocombatcongestioninsuburbanofficeparks

• Example:Pleasanton,CATRO,1984– Airqualitydistrictsfollowed

• Example:SCAQMDRegulationXV,1987– Uncleardefinitionofproblemandunrealistictargets

• Telephone‐BasedRidematching– Pilottelephone‐basedstudies

• “SmartTravelers” of1990s• Highcost,lowuse• Commuterresistance/misunderstandingoftelephone‐based,one‐timematching

– Internet&E‐mailenhancements• Moreparticipation,formbasisofridesharingprogramstoday

Phase4:“Reliable” RidesharingSystems

• Commuterswith“reliable” tripschedules• Reliable=Commuterswithregular,reliabletripschedules

• Privatesoftwarecompaniesbegandevelopingridematching“platforms”

• InitialOnlineRidematching– Prearrangementneeded

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Phase5:Technology‐EnabledRidematching

• Automatedridematchingononlinewebsites• 4keydevelopments:

– Partnershipsbetweenridematchingsoftwarecompaniesandregions/largeemployers

– Financialincentivesfor“greentrips”– Socialnetworking– Real‐timeridesharing

638NorthAmericanRidematchingServices(July2011)

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401

612 carpooling

153 vanpooling

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Real‐TimeRidematchingServices• Matchdriversandpassengers,basedondestination,throughasmartphoneappbeforethetripistotakeplace

• Typicallyshort,in‐citytrips• Cashlesspaymentthroughapp,creditcardonfile

• Participantsuseratingsystem• Differfromdispatchore‐hailmodelsthatdonotrequireadestination

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RecentControversy• Startupsasserttheyarenot transportationcompanies,buttechcompaniesthatprovideridematchingplatform

• Driversdonotneedtohavecommerciallicense,iftheyfallunderridesharingexemptionofcommercialtransportationregulations

• Ridesharingexemption=nogovernmentalregulationofsafetyandinsurancethattaxi/limocompaniesmustfollow

• Dostartupsfallunderridesharingdefinition?– Aretheirdriversnot‐for‐profit?– Arethesharedtripsalreadyalongthedriver’sroute?– Isitmorelikep2ptaxis?

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RecentDevelopments

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20132012

Aug: CPUC cease‐and‐desist orders for Lyft, Sidecar, and Tickengo

Nov: PUC imposes $20,000 fine for Lyft, Sidecar, and UBER

Dec: CPUC begins Order Instituting Rulemaking (OIR) to better regulate new companies

Mar: Sidecar and UBERx give free rides, and Lyft does publicity at SXSW in Austin

Apr: SFO cease‐and‐desist for Lyft, Sidecar, Tickengo, InstantCab, UBER

Apr: Study suggests SF add 600 to 800 more taxis

Jan: Lyft and UBER enter interim agreements with CPUC to continue operations during OIR process

Feb: Austin cease‐and‐desist for Sidecar; Philly impounds 3 Sidecar vehicles

Feb: Sidecar expands to Austin (acquires Heyride), Philly, LA; UBERx launches

Jan: Lyft expands to LA

Nov: Sidecar expands to Seattle

Mar: Lyft acquires Cherry

Mar: Sidecar expands to Boston, Brooklyn, Chicago, and DC

Apr: Lyft expands to Seattle

Feb: UBERx launches in SF

CPUCOrderInstitutingRulemaking• OIRintendedtocreateregulationstoprotectpublicsafetyandpromote

innovationinpassengertransportation• Feb2013:Prehearingconferencetodetermineallpartiesimpactedand

involved,discussscopeofrulemaking,andplanworkshops• Apr2013:ParticipatoryworkshopstodraftreportforAdministrative

LawJudge’sreviewanddecision– Clarifiedeachparty’sposition– Discussedissuesofjurisdiction,safety,insurance,competition,andinnovation– Posedpossibleregulatoryresponsestonewonline‐enabledtransportationservices

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KeyQuestionsfromWorkshop

• DoInstantCab,Lyft,SideCar,andUBERxfallunderridesharing?• Shouldamonetarycapbeimposedonamountdriverscanearn?• Whatnewregulationsshouldbeenacted?Shouldthereevenbenew

regulations?– Mar2013:FTCshowedconcerntoColoradoPUC;mayimpaircompetitionin

passengervehicletransportationservices.Recommendedaregulatoryframeworkflexibletoaccommodatenewapp‐basedtransportationservices

• Safety:Arecompanies’ checksadequate?Regulationsneededforstandardizationandoversight?

• Licensing:Shouldtherebeanewlicensingmodelforprivatelyownedvehicles(or“communitydrivers”)?

• Insurance:Somehaveexcessliabilityinsurance,butwhatarethedetails?• Shouldproprietaryinformationbedisclosedtothepublic?• Dothesecompaniesaddorremovevehicles,addorreduceemissions?

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FactorstoConsider• Popularity:Servicesarefillingsomeneedpreviouslyunmet• SocialDimension:Appealofsocialmediaandpeer‐to‐peerservices• Scalability:Reliabilityrequirescriticalmass

– E.g.,publicbikesharing’spotentialrealizedwithscaleandreliability

• Evolution:Real‐timeridematchingmayfunctiondifferentlyasitgrows– Could“communitydrivers” enablemorereal‐timeridesharinginthefuture?

• Needframeworktocategorizespectrumofservices(e.g.,rangingfromridematchingtodispatching,accountingforprofitpotentialandreal‐timenature)

• Whatisbestwaytoencourageinnovation(e.g.,shutitdown,constrainit,orpromoteminimallevelofsafety)?

• Researchneededintosafety,economicimpacts,congestionrelief,andemissionreductionpotential

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Reference

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www.tsrc.berkeley.edu