The emergence of ride-hailing services has already started to change the way that consumers travel, but companies like Lyft and Uber are looking to extend that disruption to the daily commute.
This fundamental shift will reshape urban transportation, and is being driven by changes in the regulation, pricing, and workforce policies of ride-hailing services.
Here are a few recent stories that illustrate this burgeoning trend:
- Lyft will allow riders in all 18 cities where its Lyft Line carpooling service operates to pay for rides through pretax commuter benefits, according to TechCrunch. Uber already offers a similar option for commuters with its UberPOOL service, which lets users pay for ride-hailing trips with pretax dollars on a benefits card offered by human resources providers. This mirrors how many commuters in cities save on mass transit use or parking expenses, and makes ride-hailing more viable as a regular commuting choice.
- State regulators in California are lowering the fees that ride-hailing companies have to pay the state, according to the San Francisco Examiner. Uber, Lyft, and competitors will now only pay .0025% of their annual revenue in the state to oversight bodies, down from .33% today, reports the Examiner. The regulatory commission is lowering fees because the volume of rides is increasing, so it’s able to fund oversight of ride-hailing with a lower percentage of revenue. This allows ride-hailing companies to reduce rates in major markets like Los Angeles and San Francisco, and that could extend to other markets should regulators elsewhere follow suit.
- And Uber is instituting a cap on the number of hours drivers can be behind the wheel, reports TechCrunch. The ride-hailing firm will require drivers to take a six-hour break for every 12 hours they drive in order to avoid overly tired drivers who would be more prone to accidents. Lyft has a similar policy, requiring six hours off for 14 hours of driving. Even though drivers are still independent contractors, they are being held to higher standards now to improve service and safety, a step that could make it more likely that customers will trust them with their daily commute.
Ride-hailing services are angling to take over large portions of daily commutes.They’re poised to become cheaper options for commuters to take advantage of, both through lower direct rates in markets where regulators are cutting fees, and through the use of pretax dollars, which could save consumers up to 30% per ride-hailing trip.
This could lead to a massive transformation of city streets and urban transportation more broadly as workers rely on shared vehicles to get to work instead of personal ones. Cities and companies could eliminate many parking areas, for instance.
And city streets — which are being overcrowded by the influx of ride-hailing vehicles, according to some reports — could become less congested as a ride-sharing fleet moves commuters around en masse, rather than individuals relying on their own cars to get to work. Growth in the share of commuters using ride-hailing could therefore bring major benefits to urban areas, while increasing revenue potential for ride-hailing companies and other mobility services providers.
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