4/17/2013

Disruptive Innovations in Ridesharing:
Overview of its History and Recent Trends in Real‐Time Ridematching

April 17, 2013 Susan Shaheen, Ph.D. Associate Adjunct Professor and Co‐Director of TSRC University of California, Berkeley

Presentation Overview
• Problem/motivation • Background and definitions • History of ridesharing • Recent developments • Key questions from CPUC workshop • Factors to consider

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Problem / Motivation
• Estimated effects of traffic congestion in the U.S. in 2011 (TTI, 2012):
– – – – Emissions: Additional 56 billion lbs CO2 emitted Fossil fuel use: 2.9 billion gallons of fuel wasted Efficiency: 5.5 billion hours of extra time Cost of delay and fuel: $121 billion (in 2011 U.S. dollars)

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Background
• Ridesharing a powerful strategy to address problems of congestion, emissions, and fossil fuel dependency – Simple concept: fill empty seats, use vehicle occupancy potential, reduce vehicles on roadway • Second largest travel mode in U.S. at 10.7% (ACS, 2008) • Distinction from taxis/limos – Driver’s motivation not‐for‐profit (i.e., partially cover driver’s cost) – Passenger has common origin/destination to driver

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Definitions
• Some existing definitions for ridesharing:
– “Arrangement between persons with a common destination, or destinations, within the same proximity, to share the use of a motor vehicle on a recurring basis for round trip transportation to or from their place of employment or other common destination….” (Florida Regulations 14‐73.002) – “Transportation of persons between home and work locations or of persons having a common work‐related trip purpose in a vehicle….This exemption does not apply if the primary purpose for the transportation of those persons is to make a profit….” (California PUC Section 5353(h))

Common forms of ridesharing:
– Carpooling: Grouping of travelers into a private automobile – Vanpooling: Typically commuters traveling to/from a common employment center sharing a ride in a van

Commercial/for‐hire transportation: Typically own and manage their own fleet, employ their own drivers
– Taxicabs: Operate without prearrangement, hail at the curb – Charter‐party carriers (e.g., limousine companies): Trips are prearranged

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History of North American Ridesharing
Phase 1: WWII Car‐Sharing Clubs (1942 ‐ 1945) Phase 2: Major Responses to Energy Crises (late 1960s ‐ 1980) Phase 3: Early Organized Ridesharing Schemes  (1980 ‐ 1997) Phase 4: Reliable Ridesharing Systems            (1999 ‐ 2004) Phase 5: Technology‐Enabled Ridematching  (2004 ‐ present)

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Phase 1: WWII Car‐Sharing Clubs
• 1942 U.S. Office of Civilian Defense regulation • Required ridesharing to workplaces when no other alt. transportation means available • Save on gasoline and rubber for the war effort

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Phase 2: Major Responses to Energy Crises
• Late 1960s: Employers hand‐matched employees with neighbors, distributed personalized match lists • 1973 ‐ 1974 Arab Oil Embargo: Shift from parking supply to energy conservation • Various federal policies:
– 1974 Emergency Highway Energy Conservation Act – 1975 FHWA ridesharing guidebooks – 1979 USDOT National Ride‐Sharing Demonstration Program

• HOV lanes, casual carpooling (“slugging”), park‐and‐ride facilities, vanpooling

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Phase 3: Early Organized Ridesharing Schemes
• Employer‐Based Trip Reduction (EBTR) programs – Mandatory programs to combat congestion in suburban office parks • Example: Pleasanton, CA TRO, 1984 – Air quality districts followed • Example: SCAQMD Regulation XV, 1987 – Unclear definition of problem and unrealistic targets • Telephone‐Based Ridematching – Pilot telephone‐based studies • “Smart Travelers” of 1990s • High cost, low use • Commuter resistance/misunderstanding of telephone‐based, one‐time matching – Internet & E‐mail enhancements • More participation, form basis of ridesharing programs today

Phase 4: “Reliable” Ridesharing Systems
• Commuters with “reliable” trip schedules • Reliable = Commuters with regular, reliable trip schedules • Private software companies began developing ridematching “platforms” • Initial Online Ridematching
– Prearrangement needed

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Phase 5: Technology‐Enabled Ridematching
• Automated ridematching on online websites • 4 key developments:
– Partnerships between ridematching software companies and regions/large employers – Financial incentives for “green trips” – Social networking – Real‐time ridesharing

638 North American Ridematching Services (July 2011)

612 carpooling 261 153 vanpooling 401

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Real‐Time Ridematching Services
• Match drivers and passengers, based on destination, through a smartphone app before the trip is to take place • Typically short, in‐city trips • Cashless payment through app, credit card on file • Participants use rating system • Differ from dispatch or e‐hail models that do not require a destination

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Recent Controversy
• Startups assert they are not transportation companies, but tech companies that provide ridematching platform • Drivers do not need to have commercial license, if they fall under ridesharing exemption of commercial transportation regulations • Ridesharing exemption = no governmental regulation of safety and insurance that taxi/limo companies must follow • Do startups fall under ridesharing definition?
– Are their drivers not‐for‐profit? – Are the shared trips already along the driver’s route? – Is it more like p2p taxis?
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Recent Developments
Aug: CPUC  cease‐and‐ desist  orders for  Lyft, Sidecar,  and  Tickengo Dec: CPUC  begins Order  Instituting  Rulemaking  (OIR) to  better  regulate new  companies Feb: Sidecar expands to  Austin (acquires Heyride),  Philly, LA; UBERx launches Feb: UBERx launches in SF Feb: Austin cease‐and‐desist  for Sidecar; Philly impounds  3 Sidecar vehicles Apr: SFO cease‐and‐desist  for Lyft, Sidecar, Tickengo,  InstantCab, UBER Apr: Study suggests SF add  600 to 800 more taxis Apr: Lyft expands to  Seattle

2012
Nov: PUC imposes  $20,000  fine for Lyft,  Sidecar, and UBER Nov: Sidecar  expands to Seattle Jan: Lyft and UBER  enter interim  agreements with  CPUC to continue  operations during  OIR process Jan: Lyft expands to LA

2013
Mar: Lyft acquires Cherry Mar: Sidecar expands to Boston,  Brooklyn, Chicago, and DC Mar: Sidecar and UBERx give free  rides, and Lyft does publicity at  SXSW in Austin
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CPUC Order Instituting Rulemaking
• OIR intended to create regulations to protect public safety and promote innovation in passenger transportation • Feb 2013: Prehearing conference to determine all parties impacted and involved, discuss scope of rulemaking, and plan workshops • Apr 2013: Participatory workshops to draft report for Administrative Law Judge’s review and decision
– Clarified each party’s position – Discussed issues of jurisdiction, safety, insurance, competition, and innovation – Posed possible regulatory responses to new online‐enabled transportation services

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Key Questions from Workshop
• • • Do InstantCab, Lyft, SideCar, and UBERx fall under ridesharing? Should a monetary cap be imposed on amount drivers can earn? What new regulations should be enacted? Should there even be new regulations?
– Mar 2013: FTC showed concern to Colorado PUC; may impair competition in passenger vehicle transportation services. Recommended a regulatory framework flexible to accommodate new app‐based transportation services

• • • • •

Safety: Are companies’ checks adequate? Regulations needed for standardization and oversight? Licensing: Should there be a new licensing model for privately owned vehicles (or “community drivers”)? Insurance: Some have excess liability insurance, but what are the details? Should proprietary information be disclosed to the public? Do these companies add or remove vehicles, add or reduce emissions?

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Factors to Consider
• Popularity: Services are filling some need previously unmet • Social Dimension: Appeal of social media and peer‐to‐peer services • Scalability: Reliability requires critical mass
– E.g., public bikesharing’s potential realized with scale and reliability

• Evolution: Real‐time ridematching may function differently as it grows
– Could “community drivers” enable more real‐time ridesharing in the future?

• Need framework to categorize spectrum of services (e.g., ranging from ridematching to dispatching, accounting for profit potential and real‐time nature) • What is best way to encourage innovation (e.g., shut it down, constrain it, or promote minimal level of safety)? • Research needed into safety, economic impacts, congestion relief, and emission reduction potential

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Reference

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www.tsrc.berkeley.edu

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