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What happens if we let Uber become our only option?

January 11, 2018

We often hear these days how Uber and other ride hailing apps are the future of transportation. They take advantage of the power of technology to make getting around convenient and cheap. Perfect, right?

One problem is that Uber is unable to make money. This is a news story time and time again. Recently, it was reported that Uber lost of $3.2 billion through the third quarter of 2017. That puts it on track to be in the red by about $5 billion for the whole year.

Uber is surviving only because of a massive infusion of venture capital cash. While a lot of tech companies start this way before finally turning a profit, many experts are skeptical Uber will ever be able to turn this corner. The vast majority of Uber’s costs are drivers and fuel. Uber thinks it can replace drivers with automated vehicles, but that’s going to be much harder than it anticipates. (Uber has managed to sour its relationship with its driverless car test city, Pittsburgh.) In the meantime, Uber is paying many of its drivers so little that some are unable to cover the costs of buying and maintaining a car.

The traditional taxi industry is struggling as Uber undercuts its prices. Transit ridership is down as people opt for the convenience of a hailed ride. Putting its competitors out of business seems to be Uber’s business model. Once other options are gone, Uber will be free to raise prices as it pleases.

Uber and its peers have undoubtedly brought desperately needed new ideas to the transportation market. The ability to hail a ride at odd hours or from areas that taxis avoided cannot be ignored. We can’t let these new benefits and conveniences blind us to the bigger picture, though.

In many ways, our rapid adoption of Uber and other ride-hailing services is reminiscent of the way we abandoned passenger trains in favor of cars and jets. We let our passenger train system wither until it was reduced to basically nothing, leaving driving and flying as our only options. Now that the novelty of those new modes has worn off, and our highways and airports are crippled by congestion, we’re starting to look back to trains, but it’s difficult and expensive to replace infrastructure we let crumble. We would face the same challenge if we let our buses, trains and taxis be totally replaced by ride hailing apps—or driverless cars.

One of the primary reasons for abandoning passenger trains in the post-war era was that they weren't making money. Well, Uber is here to remind us that even an incredibly successful passenger transportation service has a hard time making money.

We need a balanced transportation system with many options that work together, not dominance by one or two modes or service providers. Around the world, fast, frequent and reliable trains are part of that balanced system, and that needs to be our model for the Midwest and the rest of the country.

Kevin Lee

Ohio State Rail Plan public meeting Jan. 16

Please attend and participate in a public meeting on Ohio's Statewide Rail Plan to be held at 10 a.m. Tuesday Jan. 16 in Columbus. Share your desire for fast, frequent and reliable passenger trains! There is the opportunity for trains to return to Ohio’s agenda after the gubernatorial election this fall.

All Aboard Ohio Chairman Jack Shaner will speak at this meeting on behalf of the organization and present its recent "Immediate Needs" report and will encourage the exciting findings of the Federal Railroad Administration's Midwest Regional Rail Plan to be included in this report.

The meeting will be held by the Policy Committee of the Ohio Rail Development Commission (ORDC) in Room GB at the HQ of the Ohio Department of Transportation, 1980 West Broad Street (US40), just west of its interchange with I-70. A regular ORDC meeting will follow at 11 a.m.

For more information contact Julianne Finnegan of ORDC at 614-728-9497.

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