4/17/2013

Disruptive Innovations in Ridesharing:

Overview of its History and Recent Trends in RealTime Ridematching

April 17, 2013 Susan Shaheen, Ph.D. Associate Adjunct Professor and CoDirector 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

4/17/2013

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)

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 Drivers motivation notforprofit (i.e., partially cover drivers cost) Passenger has common origin/destination to driver

4/17/2013

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 1473.002) Transportation of persons between home and work locations or of persons having a common workrelated 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/forhire transportation: Typically own and manage their own fleet, employ their own drivers
Taxicabs: Operate without prearrangement, hail at the curb Charterparty carriers (e.g., limousine companies): Trips are prearranged

History of North American Ridesharing

Phase1:WWIICarSharingClubs (1942 1945) Phase2:MajorResponsestoEnergyCrises (late1960s 1980) Phase3:EarlyOrganizedRidesharingSchemes (1980 1997) Phase4:ReliableRidesharingSystems (1999 2004) Phase5:TechnologyEnabledRidematching (2004 present)

4/17/2013

Phase 1: WWII CarSharing 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

4/17/2013

Phase 2: Major Responses to Energy Crises

Late 1960s: Employers handmatched 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 RideSharing Demonstration Program

HOV lanes, casual carpooling (slugging), parkandride facilities, vanpooling

4/17/2013

Phase 3: Early Organized Ridesharing Schemes

EmployerBased 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 TelephoneBased Ridematching Pilot telephonebased studies Smart Travelers of 1990s High cost, low use Commuter resistance/misunderstanding of telephonebased, onetime matching Internet & Email 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

4/17/2013

Phase 5: TechnologyEnabled 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 Realtime ridesharing

638 North American Ridematching Services (July 2011)

612carpooling 261 153vanpooling 401

4/17/2013

RealTime Ridematching Services

Match drivers and passengers, based on destination, through a smartphone app before the trip is to take place Typically short, incity trips Cashless payment through app, credit card on file Participants use rating system Differ from dispatch or ehail models that do not require a destination

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 notforprofit? Are the shared trips already along the drivers route? Is it more like p2p taxis?
1

4/17/2013

Recent Developments
Aug:CPUC ceaseand desist ordersfor Lyft,Sidecar, and Tickengo Dec:CPUC beginsOrder Instituting Rulemaking (OIR)to better regulatenew companies Feb:Sidecarexpandsto Austin(acquiresHeyride), Philly,LA;UBERxlaunches Feb:UBERxlaunchesinSF Feb:Austinceaseanddesist forSidecar;Phillyimpounds 3Sidecarvehicles Apr:SFOceaseanddesist forLyft,Sidecar,Tickengo, InstantCab,UBER Apr:StudysuggestsSFadd 600to800moretaxis Apr:Lyftexpandsto Seattle

2012
Nov:PUCimposes $20,000 fineforLyft, Sidecar,andUBER Nov:Sidecar expandstoSeattle Jan:LyftandUBER enterinterim agreementswith CPUCtocontinue operationsduring OIRprocess Jan:LyftexpandstoLA

2013
Mar:LyftacquiresCherry Mar:SidecarexpandstoBoston, Brooklyn,Chicago,andDC Mar:SidecarandUBERxgivefree rides,andLyftdoespublicityat SXSWinAustin
1

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 Judges review and decision
Clarified each partys position Discussed issues of jurisdiction, safety, insurance, competition, and innovation Posed possible regulatory responses to new onlineenabled transportation services

4/17/2013

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 appbased 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?

Factors to Consider
Popularity: Services are filling some need previously unmet Social Dimension: Appeal of social media and peertopeer services Scalability: Reliability requires critical mass
E.g., public bikesharings potential realized with scale and reliability

Evolution: Realtime ridematching may function differently as it grows

Could community drivers enable more realtime ridesharing in the future?

Need framework to categorize spectrum of services (e.g., ranging from ridematching to dispatching, accounting for profit potential and realtime 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

10

4/17/2013

Reference

www.tsrc.berkeley.edu

11