Uber’s latest campaign is something a little different from the usual corporate marketing pushes. “Unlocking Cities” is meant to start a conversation on how ride-sharing services can solve traffic and parking problems in urban areas; taking some pressure off the need to constantly build more parking spaces.
The company commissioned a study from the Boston Consulting Group to measure the impact of ride-sharing could have in Southeast Asia. A large portion of this study was done under the assumption that ride-sharing would not replace the existing public transportation networks, but rather operate as a complementary service.
According to the BCG, demand for public transportation in the SEA region outstripped supply some time in the mid-2000s. While some countries have scrambled to address this imbalance, the study concluded that the current amount spent on infrastructure is severely insufficient. According to the report, governments need to spend at least three times as much as they plan to do to avoid future problems.
Ride-sharing’s value proposition in this is to reduce pressure on public transportation networks by offering more mileage from existing assets, i.e. privately owned vehicles.
“The efficient use of some public transport networks is not what it needs to be. That’s what we’re really after. If we were just building a ridesharing busines in a silo, we would have nothing to with where trains ended, bus systems didn’t cover, or where bikes didn’t take you the last little bit up a trail. We have to do that as a coordinated effort,” said Uber Chief Business Officer APAC, Brooks Entwisle.
The idea is that personal vehicles are an inefficient use of roadspace. Every car driven by one person has at least one spare seat; and this creates a lot of wasted room on roads. This inefficiency results in traffic jams and parking issues.
According to Uber, Kuala Lumpur and its surrounding areas only need 60-percent of the current 5.8 million vehicles to properly service the population. On a regional scale, the number of cars on the roads could be reduced by as much as 50-percent and still sustain the needs of the people.
“You need technologies that can make the most of that infrastructure. You can’t just build expressways and trains and just do it forever. First of all, you don’t have the funds. Second of all, if you’re not using them and they’re sitting empty or not being optimised. That’s not something we want to be a part of,” said Entwisle.
The caveat of this is that the number of ride-sharing drivers must hit a critical mass. At the moment, ride-sharing adoption is low in Asia; only 1.6-percent of kilometres travelled across all studied cities. According to the BCG, this number needs to grow to 10-percent by 2022 to maintain current levels of congestion. Needless to say, additional growth would be needed to actually reduce traffic problems.
One note that the BCG touched upon was the inefficient use of public spending thanks to the never-ending need to build more infrastructure. Uber argues that allowing ride-sharing to take on its share of the problem solving would free up governments to spend taxes on other things like education and environmental issues. Which, in theory, represents a win-win situation for everyone.
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