What happens when a city subsidizes Uber rides?
Photo by Andrew Caballero
Earlier this month, Fortune magazine ran a Reuters piece about a Florida town that is planning to subsidize Uber rides for its residents in the hopes of decreasing road maintenance and public transit costs:
The goal is to integrate the on-demand ride service into the transportation network, get cars off the road and induce people to use mass transit such as SunRail, the two-year-old regional commuter train, said city manager Frank Martz.
Altamonte Springs has budgeted $500,000, partly from local businesses, for a year-long study during which it will pick up 20% of all Uber rides in city limits, and 25% for those to or from its SunRail station.
“It is infinitely cheaper than the alternatives,” said Martz, whose city has a population of about 43,000 and median income of $50,000. “A mile of road costs tens of millions of dollars. You can operate this for decades on $10 million.”
It's an interesting idea, but the premise seems flawed and the execution sounds challenging.
The argument that offering Uber at a lower rate will encourage public transit use is flimsy at best. How many people who have a high enough income to afford Uber (and the accompanying smartphone to summon a car) are going to use that Uber just to get to a bus or train stop, then switch to public transit? Additionally, if Altamonte Springs is still a car-centric environment, designed primarily for transportation via automobile (and Google Earth images indicate that it is), residents are still going to have to take all their usual trips to work, the store, etc. in a car. What difference does it make for the wear and tear on the road whether people are traveling in personal vehicles or in an Uber car?
Furthermore, as the article points out, Uber is only accessible to a certain wealthier slice of the population (who have smartphones and data plans):
Andrae Bailey, chief executive for the Central Florida Commission on Homeless, argued that the homeless and poor who rely on city buses typically don’t benefit from technological solutions because they don’t have easy internet access.
So it's not a holistic solution by any means.
When we shared this article on our Facebook page, we received a wide range of responses. Some commenters found the concept "interesting," another called it "so stupid," and another responded, "absolutely it can work." Perhaps the best response came from Strong Towns member, Mason Wallace who commented: "It's a small Florida city running an experiment. We shall wait and see for the results." Indeed.
(Top image from FreeStocks)