Photo Credit: iStock
Photo Credit: iStock
Regulatory Reform

Uber and Lyft: Expanding Demand for Fare-Based Rides in Cities

Uber and LyftUber and Lyft both take business away from traditional taxis and increase overall demand for transportation-type companies. A study by the city of Portland, Oregon, as reported by Bloomberg Technology, collected data during the city’s trial period for Transportation Networking Companies (TNCs).

The data, as presented, is both startling and expected. As a general trend, the advent of TNCs in a city causes a drop in demand for traditional taxi services. Surprisingly, though, Portland’s data establishes that TNCs bring additional consumers into the fare-based ride system.

According to the data, taxis lost about 1,000 rides per day to TNCs, while overall demand for fare-based rides increased roughly 60% between May 2015 and the end of August 2015. Specifically, Bloomberg and Portland reported that taxis and TNCs provided about 7,800 rides per day in May. At the end of the TNC trial period, taxis and TNCs combined to provide about 12,500 rides per day.

Demand for TNCs increased at a much higher rate than it decreased for taxis. That is to say, demand for taxis decreased, but the demand for Uber and Lyft was higher than the decrease experienced by taxi companies. This means that Uber and Lyft brought a significant number of non-taxi using consumers into the fare-based ride systems.

This is the first detailed study demonstrating both the degree to which Transportation Networking Companies compete with traditional taxis and the number of additional consumers who enter the fare-based ride system because of Uber and Lyft. Based on the numbers, cities and state clearly benefit from the embrace of TNCs and the expanded economic advantages they represent.

In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth