A Pro-Poor Rideshare Debate Would Be About Prices

In college, I needed a dentist and put it off for weeks. I found one who did free consultations, but a taxi from campus was $30 to $40 each way. That was what I made on a decent shift waiting tables.

I took one of the heavy communal campus bikes, the ones weighted down so nobody steals them, and I stole it temporarily. I was a straight-A student who hated breaking any rule. I rode 40+ minutes on roads with no bike lanes. I had barely ridden a bike as an adult.

Rideshare is infrastructure for people without cars

Policy circles mostly picture Uber as a convenience. A ride means not hunting for parking, or not needing a designated driver after drinks.

That’s not how everyone sees it.

39 percent of Lyft riders don’t own a car. About half use the app to reach public transit. 29 percent use it for errands like groceries. More than a quarter have taken it to a medical appointment.

My dentist problem wasn’t unusual. 5 percent of American adults skipped needed medical care last year because they couldn’t get there. Among adults with neither a car nor transit access, it was 21 percent.

Some of my undocumented friends in DC are avoiding buses right now because of immigration enforcement. They use Uber to minimize time in public spaces.

Rideshare is a lifeline for some low income communities.

A debate focusing only on driver pay leaves out the rider

Cities sometimes write rideshare-specific rules to raise the pay of drivers already making roughly $19-$30. For context, two out of every 5 US jobs pay less than $20.

Pushing the per-minute pay higher doesn’t appear to lead to higher wages.

Seattle required Uber to pay drivers a minimum wage for every minute they were on the clock. Drivers got a higher pay-per-minute but far fewer rides. Their overall pay per hour decreased.

Fares went up 40% and trips decreased 50%. Prices mattered.

A better question is why Uber and Lyft have no cheaper competitors

Some of it is Uber and Lyft’s huge market share from being the first apps. But sometimes rules meant to make these companies pay better and offer benefits make alternative models illegal.

Even though drivers prefer getting 100% of the fare, this is illegal in DC. One low-end competitor, Empower, is banned because the DC government requires that the rideshare company be the provider of the liability insurance. Drivers are not allowed to buy their own.

Insurance only makes up about 5% of a DC Uber fare, so it can’t explain Empower’s 20-40% lower prices. At an Empower protest, one rider said Empower is really the only affordable rideshare.

Rideshare is not a luxury good. We should prioritize lower fares.

In an effort to target big tech companies, DC and many blue cities tax individual Uber and Lyft rides. The wealthy and the poor pay the same amount per trip.

A Chicago per-ride tax of $1.13 to $1.75 significantly reduced trips to areas with a high proportion of low income and Black residents.

For riders who lack a car and struggle to get to work, fares are a larger percentage of their income.

Rather than focus on drivers, who tend to be higher income and more organized, we should aim instead for policies that help gig workers and low-wage workers regardless of what sector they’re in. Low fares help many people. Ideally we’d spend the political energy on the bigger, harder things: public transit, and neighborhoods you can walk and bike.

In some states, the liability insurance takes up 30% of the fare. DC has the same $1 million requirement, but insurance is less of the fare. DC is one of five states with the strictest payout rules: you can’t get compensation if you are even just 1% at fault for the crash.