Uber CEO: “History Repeats Itself When We Resist Transportation Innovation”

Thinking Highways
By Thinking Highways February 17, 2016 12:28

Uber CEO: “History Repeats Itself When We Resist Transportation Innovation”


VANCOUVER, BC—Travis Kalanick, founder and CEO of Uber, took the stage at TED 2016 to talk about the “future of human-driven transportation.” How can we use technology to cut traffic, congestion, and parking woes? Kalanick suggested that we have the technology; the problems lie in the current regulatory landscape. And Kalanick believes that history is on his side.

There was “an Uber before there was Uber,” Kalanick said during his presentation today. He referenced a service called the jitney, a ride-sharing endeavor that was popular more than 100 years ago (the word “jitney” was slang for “a nickel” at the time). In 1914, an enterprising LA man grew tired of long trolley lines and simply put a sign on his car advertising five cent rides. It exploded. As difficult as it is to believe, Uber does as many rides in LA per day in 2016 as the jitney did in 1915, Kalanick said.

Clearly it was something people really wanted, but the jitney wouldn’t last. The urban transportation monopoly at the time was the trolley industry. Trolley owners and operators hated jitneys, and they lobbied across the country to slow down the spread of the service. Although LA’s nascent jitney service climbed to 50,000 rides in a single day, trolley operators were eventually successful in shutting it out. The ride-sharing pioneer died out entirely in just five years.

How did something so popular simply vanish? Regulations were clearly designed to hurt jitney businesses. In some cities, for example, a driver was required to drive 16 hours a day to be eligible to run a jitney. Other cities required two registered drivers per vehicle. According to Kalanick, such rules were arbitrary and largely aimed at shutting out jitneys.

Kalanick is no stranger to industry battles. In many cities across the world today, Uber is both loved and denigrated. In fact, Uber has been trying to crack Vancouver for years. But there is steadfast local resistance, so much so that I’ve found even raising the topic of Uber in a taxi from the airport to the Waterfront is asking for a lecture. This week, Uber formally announced that it would hold off on coming to British Columbia until the area could settle its regulatory issues.

Kalanick believes that obstructionism is preventing us from solving hard problems. In the US, we spend 7 billion hours per year sitting in traffic. A fifth of all our carbon footprint stems from cars. Meanwhile, 96 percent of the time, our cars sit idle, often in dedicated spaces that are otherwise unused. Kalanick showed a slide of the famous Marina City on the Chicago river, noting that we even build skyscrapers for cars. The Uber CEO views this practice as an unsustainable waste of resources, and it’s hard to deny that the US needs to do something about urban congestion.

Critics of Uber often point to existing mass transit solutions, but Kalanick says that “mass transit hasn’t yet figured out how to get to everybody’s doorstep.” Even New York, which has an extensive and generally excellent mass transit system, sees 2.5 million cars per day crossing its bridges and tunnels. Meanwhile, Uber’s success in the city is proof that people are willing to pay for a service that will reach their door.

Cost remains important to users, of course. The UberPool service, which has taken the “press a button and get a ride” idea and applied to it ridesharing, was conceived to lower costs while carrying more riders. And in only a short time, UberPool has exploded in jitney-like fashion. In China, there are 15 million UberPool trips per month. In LA, there are now 100,000 Uber carpooling rides every day. Kalanick says that in six months, UberPool is responsible for reducing CO2 emissions by 14,000 tons. The CEO called it a great solution for urban carpooling.

When we look to suburbs, however, there is an obvious problem—fewer Uber drivers. Enter UberCommute. Kalanick wants to give everyone the option of being a driver and matching up with riders in their suburb. Imagine hopping in your car in the morning, firing up the Uber app, and finding three people nearby who are going to a similar location and are willing to pay you to drive. Sounds great, right?

Regulatory problems are getting in the way, though. The US/IRS standard for the cost of owning and operating a car is 54 cents per mile. Kalanick says that a driver can’t charge more than that, a limitation that is likely hurting the supply of potential drivers. The government should raise this rate to encourage everyday drivers to start sharing their own cars, he said.

What if we could get 50 million people carpooling just by increasing this rate to 60 cents? Kalanick has no data to suggest that such a minor increase would have a tremendous effect, but his point is that we should be willing to try new things. In Kalanick’s view, we should strive to turn every car into a shared car in order to reclaim our cities and drastically reduce our carbon imprint. After all, cities typically dedicate 30 percent of their space to parking. Let’s turn them into parks, he said.

Thinking Highways
By Thinking Highways February 17, 2016 12:28