Auckland Transport is seeking proposals for a ride-sharing system to help address Auckland's transport woes. The public transport agency is scoping a trial platform to support an on-demand ride-sharing service, including apps for both the driver and the customer. Essentially this would be a local government run version of Uber.
This is potentially an important step in the local battle against the monopolistic ride-hailing platform of Uber which offers poor job security, poor worker rights and sucks money out of the local economy. It is clear now that the technological efficiencies of mobile based ride sharing are outpacing the traditional taxi industry. However, this does not mean that we must settle for offshore platform monopolies like Uber dominating the market.
However, it is important that this Auckland app is framed in the right way so that it ensures conditions of work, pricing and saftey features are addressed properly. These are just some of the concerns that have led to cities such as London attempting to ban Uber from operating in their environs.
Many progressive cities around the world are exploring similar localised publicly owned approaches in order to combat both increased congestion and the growing market dominance of Uber and competitors such as lyft. Many US cities are integrating ridesharing services such as Uber with local transport agencies.
There are, unsurprisingly, already criticisms of this Auckland Transport approach such as the right wing lobby group Auckland Ratepayers Alliance. Their recent Press Release argues that AT should stay out of this business and leave it to the likes of Uber.
For a start, the alliance miss the fact that AT is seeking experienced partners to run this service. Nothing is preventing Uber or other operators from submitting a proposal.
More importantly the lobby group claims:
“The only point of difference is that Auckland Transport’s service will transport multiple users at once – presumably to keep costs down. But considering existing operators have declined to offer multi-user rides, there’s unlikely to be enough demand for the service to cover its costs.”
This logic is dead wrong. In fact that is an important point of difference especially given the congestion on Auckland roads and the need to reduce carbon emmissions. Furthermore, many international operators (including Uber) are now moving in this direction of multi-passenger ridesharing. The only reason the likes of Uber have not done so already is that it was more profitable for them to keep it to single rides when they had complete market dominance.
The Lobby group also claims: “Even Uber hasn’t managed to turn a profit, losing $5 billion internationally last year alone. So, who will foot the bill for this service’s ongoing losses, not to mention the up-front cost of application development? Inevitably, ratepayers will be forced to subsidise the app to keep it afloat.”
This again is incorrect. There certainly is big money in ridesharing. Uber’s actual Turnover is massive. The only reason they have failed to turn a profit is their monopolistic growth quest which saw them plowing all profits into opening up new markets in order to control the global market and snuff out emergent local players. This approach which copies the likes of Amazon in the book industry is well established. However, it appears for Uber it has failed due to fierce resistance from local competitors in India and other developing nations who have managed to keep Uber from dominating the market. This and law suits and bans such as that of London have lead to record losses in 2017 and internal personnel shuffles at Uber.
In otherwords, The very fact that Uber has not been profitable is due therefore to local ridesharing apps such as this one. Uber’s strategy in 2018 is said to be focused on consolidating in existing territories with a more US focus and fighting against competitors such as Lyft, as well as somehow improving their terrible image.
Let’s hope that this trial could be the start of a more decentralised and ethical local approach in New Zealand which could slow or reverse the market domination of Uber here. Municipal ride sharing in all major New Zealand centres would provide better jobs for drivers, better customer service and ensure some of this spend remains in the New Zealand economy.
Finally the Lobby group states:
“Governments, especially local governments, are bad at running businesses, and shouldn’t try to compete with established firms. Auckland Transport should stick to its core services – improving roads, ensuring buses show up on time, and so on.”
This is pure neoliberal ideology. It hardly warrants an answer, however transport is a core service. It is clear the future of transport will feature ridesharing apps so it would be crazy for a public agency to stay out of this market.