Sign up FAST! Login

Public Transit Should Be Uber’s New Best Friend


Stashed in: New York, Transportation!, Uber, Nate Silver, Transportation, Uber

To save this post, select a stash from drop-down menu or type in a new one:

One of the early conundrums about Uber: it is used more in areas with better access to public transit! This article sheds light on the apparent disconnect.

It's interesting to see 538, which was previously critical of Uber, saying it has a chance:

The biggest potential market is among people who own their own cars: The average American household spends around $8,500 on personal vehicles per year; multiply that by 125 million households, and you have a market worth in excess of $1 trillion per year. Persuading even a small fraction of households to give up their cars for Uber could be very lucrative for the company.

But if Uber is to achieve its goal of becoming cost-competitive with car ownership, it may have an unlikely ally: public transit. A combination of (mostly) public transit along with some Uber rides can be affordable for a wider range of customers than Uber alone.

Two fifths of all public transit happens in New York?!

New York City is the biggest market for public transit in the country — in fact, about 40 percent of all public transit trips in the United States occur in the New York metro area.

This is a reminder that a taxi or an Uber is a big expense:

Given the current fare schedule for yellow cabs, a 5-mile journey in a New York taxi might cost $20, including a reasonable tip and depending on traffic. (Pricing for one of Uber’s lower-cost services, UberX, is pretty similar.) Subway rides cost $2.75, by contrast — about $17 less. If traveling by taxi saves a passenger 15 minutes — a possibly generous estimate given that the subway is sometimes faster than a taxi stuck in traffic6 — that means she must value her time at $68 an hour or more to make taking the cab worthwhile, equivalent to her earning an income of about $140,000 per year from a 40-hour work week. For a well-paid lawyer or banker, that’s nothing, but the median household income in the city is closer to $50,000.

Uber and taxis in New York now do 200 million rides per year. By contrast, the New York subway provided 1.75 billion rides in 2014, about nine times as many. There were also almost 800 million MTA bus rides8 in 2014.

So Uber can be cheaper than owning a car IF you mostly use public transit:

Public Transit Should Be Uber s New Best Friend FiveThirtyEight

You May Also Like: