Lyft and Uber Want to Fund Better Roads...for Lyft and Uber

Rideshare companies are investing in public infrastructure, but only when it helps their bottom line.

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Apr 25 2019, 6:33pm

Image: James Schwartz/Flickr

When ridehailing company Lyft went public last month, it also announced an annual $50 million initiative to invest in transportation infrastructure and the cities where it operates, partly through a program called Lyft City Works.

This seemingly altruistic move—a combination of philanthropy and policy—is similar to what all major ridehailing companies have done in the past few years. Uber, for example, funnelled $2 million into advocating for congestion pricing in New York, a move the city hopes will curb traffic and generate revenue to pump into the subway system. And Via stepped in to offer discounted fares to riders when trains shut down.

But while these initiatives can and have moved to improve some public infrastructure, such as carpool lanes and bike lanes, they are also looking to strengthen and grow ridehailing companies’ bottom line. That means lobbying for changes and fixes that will make cities more amenable to the growth of their products.

“At one level it positions them as a ‘friend of’ instead of as a ‘foe of’,” said Shauna Brail, an urban studies professor who studies ridehailing at the University of Toronto. “But it also positions them for profit.”

For example, Lyft and Uber are both part of a campaign called SharedStreets, which the companies said would enable data sharing with cities around the world. This would allow for urban planners to account for ridehailing in redesigning roads and curbsides, creating more space for drivers to drop off and pick up passengers. Lyft also partners directly with cities on this front—for example, it worked with Washington, DC’s department of transportation for designated curbside pickups for ridehailers.

(Unfortunately for both the companies and consumers, there is little evidence that this works. Several studies, in fact, say that ridehailing companies only make congestion and road safety worse.)

One 2018 report by the Metropolitan Area Planning Council in Boston also found that many riders aren’t using Ubers and Lyfts as an alternative to private cars, but rather as an alternative to public transport. “Survey results indicate that 42% of passengers would have used public transit for their trip if ride-hailing services had not been available,” the authors wrote. “In other words, 59% of all ride-hailing trips are adding additional cars to the regional roadway system.”

Some of what ridehailing companies are lobbying for does seem like a win-win situation. Andrew Salzberg, the head of transportation policy for Uber, said one of the priorities for the company is to fix existing infrastructure, be it potholes or subways. “You don’t need to expand roadways, but you can use them properly,” he said. “You can limit congestion just by having more people moving through.”

In that sense, Uber has not just lobbied to make roads better for their cars and drivers, but to share more information with cities, build apps that include public transit options, and to expand bike lanes to limit shorter-distance car trips (Uber also has a huge stake in the bike share market after it bought the company Jump). And Salzberg doesn’t hide the goal: “There’s some self interest there,” he said.

This may not be a bad thing, Brail said. Since these companies are here to stay, she said they are also responsible for investing in the cities where they roll out. “Because these firms are aggressive in their rollouts, and because there is VC money subsidizing everybody’s rides, there’s an opportunity to say this is a company getting millions and billions from us and should give some back.”

But she also pointed out that the “divide and conquer” strategy that Uber and Lyft have been using with cities allows them to forge various deals with specific municipalities that deter the cities from banding together and looking at the impact that ridehailing companies have on their roads. In Boise, Idaho, for example, Lyft developed a plan to get riders to city buses for discounted rates, while in Monrovia, California it offered discounted rides in lieu of public transport altogether, which more cities are starting to choose.

Meanwhile, with both Uber and Lyft expected to file their IPOs, we’re bound to see even more lobbying and policy work from these private companies putting pressure on public infrastructure. In fact, as a University of Pennsylvania Law School publication pointed out, the two companies have employed more lobbyists than Amazon, Walmart, and Microsoft combined in their quest to ease regulations and put more drivers on the road.

As ridehailing companies continue to become a more permanent part of our public transport dialogue, it’s important to recognize that $50 million from Lyft, or congestion pricing support from Uber, is not an innocent push for better transportation infrastructure. It’s a way of influencing the way we walk, bike, bus or hail a ride to work.

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