OPEN FORUM Forget limiting Uber and Lyft
Congestion pricing is the efficient, fair solution
Bob drives around the city to get to work, run errands and see friends, even though he occasionally hits traffic jams. Given where he lives and the places he goes, it’s just not practical to walk, bike or use public transit.
Jennifer doesn’t have a car. She walks, bikes or takes public transit to get around. Sometimes it’s pretty inconvenient.
Ride-hailing companies like Uber and Lyft have definitely improved Jennifer’s life. Now, she goes places that weren’t practical before, like meeting a friend for lunch on the other side of town. You know, the sort of things Bob has been doing for years.
Bob fumes at the extra traffic from ride-hailing. After all, Bob says, he was here first, so the congestion isn’t his fault. He just wants to make his life great again.
“Bobs” around the country think they have a solution: hobble the technology that has allowed other people to get around more conveniently. A new law in New York City aims to reduce congestion by limiting the number of ridehailing vehicles. Some San Francisco leaders are advocating for similar restrictions.
So, who wants to explain to Jennifer why she shouldn’t get to use the public roads to travel by Uber and Lyft, but Bob should get to use them to drive his own car?
Not me. Because there isn’t a valid explanation.
Sure, Bob can argue that ride-hailing cars clog streets looking for addresses or stopping in traffic to pick up or drop off customers. But they spend less time than Bob looking for a parking space, stopping in traffic to try to squeeze into a parking space, or occupying a parking space. After all, they make money when they are transporting passengers.
In reality, the problem isn’t Uber and Lyft. The problem is that every vehicle on the road slows others, and much more so if the roads are already crowded. Just as with pollution effects, drivers don’t have an incentive to change their behavior, because they don’t bear the congestion cost they impose on others.
Bob had a good run for a while. Only people who could afford cars and parking spaces were using the roads, so the congestion wasn’t too bad. Since the great recession, however, rising vehicle ownership and more people going to work in a growing economy have made traffic congestion worse. Yet, the solution isn’t to prohibit new car owners or to throw people out of work.
Most recently, smartphones have enabled ride-hailing, improving the technology for coordinating rides and evading some monopolistic regulations promoted by the taxi industry. That has allowed a new population to use the roads in mostly the same way drivers have been doing for a century, which has further increased congestion. But the answer isn’t to arbitrarily favor one model of road use (car ownership) over another (car hire).
The answer is to allocate limited space on crowded streets and highways fairly and efficiently among the growing number of people interested in using them. Years of economic and engineering research has shown that congestion pricing — charging more to use clogged routes on which one additional car causes more delays for others — is a really good way to help society make the best use of our roadways.
The money collected can be used to fund the government or improve roads. Or it can just be distributed equitably among all people. My definition of “equitable” would be to allocate more to low-income households who would have the hardest time coming up with the road payments. Your definition may differ.
If we are not willing to price road use, then we need to come up with other regulations that prevent inefficient overuse of the roads without discriminating against travelers who don’t happen to own their vehicles.
Unfortunately, the track record for such non-price regulation of vehicle use reducing congestion — such as highoccupancy-vehicle lanes and odd/even license-plate driving restrictions — is not great.
Restricting ride-hailing, however, isn’t the answer. We shouldn’t make Bob’s driving life great again by undermining Jennifer’s ability to get around.
Severin Borenstein is a professor at UC Berkeley’s Haas School of Business. He has no affiliation with, or financial interest in, any ride-hailing company. In fact, he drives his own car most places he goes.