Flash. On plugging gaps normally filled by public and private investment in transport infrastructure and services.



 * Exracts: Article by continues at http://www.bbc.com/news/technology-38252405

The town of Summit, New Jersey, is about 30 miles west of Manhattan. It has a population of around 20,000. While I’ve never been there myself, I can tell you one thing: finding a parking spot at the train station can be a complete nightmare.

So Mayor Nora Radest was planning to do the obvious and build more spaces to accommodate the growing demand. It would have cost around $10m (£7.9m).That’s an awful lot of money, and so instead she took on an interesting experiment. Everyone who has a parking permit at the station is now entitled to a free Uber ride to and from their homes.

“As an alternative transportation option, ridesharing is not new,” explains Summit Mayor Nora Radest. “But our program is the first of its kind in the United States to use ridesharing technology as a parking solution. Our innovation has the potential to shape how municipalities think about and implement parking options in the future.”

“Our innovation has the potential to shape how municipalities think about and implement parking options in the future,” the Mayor said.

  • Indeed it does. Across the US, Uber (and sometimes its rival, Lyft) are being used to slowly plug gaps normally filled by public and private investment in infrastructure and services.
  • In Los Angeles, for instance, residents living in some new apartment blocks are given $100 Uber credit in lieu of a place to park.
  • In Pinellas County, Florida, local politicians realised that in lightly-populated areas it was cheaper to subsidise Uber journeys by 50% than it was to extend a bus route.
  • Also in Florida, Altamonte Springs has all but done away with public transport altogether, instead subsidising all Uber trips in the town by at least 20%.
  • In Washington DC, those in charge of the emergency services were looking at a “creative” way of sometimes using Uber cars instead of ambulances for non-emergencies.

Lawrence Hanley from the Amalgamated Transit Union – which represents public transport workers – told The Verge the speed at which ride-sharing services were replacing existing public services was “like a tsunami”.

‘Staggeringly unprofitable’

As it stands, all the ideas I’ve outlined above make a great deal of sense. Why run empty buses all day when you can just ferry passengers about in more comfort for less money?

But with local authorities turning to Uber instead of investing in the city itself, the question becomes: what happens if Uber goes bust?

An in-depth, ferocious assessment of Uber’s finances by the Naked Capitalism blog concluded that the company was “staggeringly unprofitable”.

The company of course disputes this and argues that like many Silicon Valley companies – with Amazon being the prime example – massive losses are what’s needed in order to speed up growth. is investing heavily in self-driving technology, but it will be years until it is ready

The firm is still a private company, and thus, verified numbers are rare. But one leak at least suggests that in 2015 it made a loss of $2bn on revenues of $1.4bn.

Much of that loss is due to subsidising fares. If you’ve ever got an Uber and wondered how on earth drivers could earn money from such cheap fares, the answer is that it appears you’re typically only being asked to pay about 40% of the total cost. The rest is being paid by Uber so that drivers can make an above minimum-wage living (though often not by much, as many have pointed out).

Pleasing everyone

So where does that leave us?

*Full text article continues at http://www.bbc.com/news/technology-38252405



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