Customers love our new invention! You have to start listening to the customer! How often have you heard this line as though it ended any argument? I certainly hear it all the time as an explanation of why “service to your door” will sweep away large parts of the fixed route transit industry.
The answer is: People want all kinds of things that they can’t all have, because those things just too expensive per customer to provide. Wealthier people can have them, but the tastes that wealthy people can afford are a terrible guide to what will work for everyone.
A great example is “service to your door,” when applied to dense cities. There is a different issue when applied to suburbs, to which I’ll return in another post.
As far as we can tell, neither Uber nor its competitors can make a profit, even though they focus heavily on dense cities where the geography is most favorable to them. Startups have lots of good arguments for why we should wait a while for them to be profitable, but Uber is running out of them. We are not waiting for Uber to scale up; it is already huge. We are not waiting for it to become more labor-efficient; it has already squeezed labor so hard that it can’t retain drivers. We are not waiting for more efficiency in communications; the app already works fine. What are we waiting for?
As Len Sherman argued in Fortune recently, the real answer is simpler. Urban transportation is just not a profitable business. Transit isn’t, and taxis and taxi-like services usually aren’t either.
But transit is supremely efficient at one essential thing: it uses scarce urban space efficiently. By contrast, “service to your door” is becoming a new way to strangle our cities with congestion. Congestion is a spatial problem; it will still be there in a coming age of automation.
So yes, everybody would like to have service to their door. But the true price of that, in dense cities, is likely to be something that only relatively wealthy people can afford. Pre-automation, labor is an irreducible cost. Post-automation, in dense cities, there will still be the problem of space. Uber and Lyft are already increasing traffic in dense cities that don’t have room for it. If they suddenly become cheaper, the resulting induced demand would be the death-knell for the functioning of cities.
To its credit, Uber understands that only road pricing will solve this problem even in the post-automation world. This, of course, would push the price of their service back up, and thus out of range for many people. But that would indeed be the true price. Which is why the “service to your door” fad must not be allowed to undermine fixed route transit systems that can work for everyone because they use space so efficiently. (Post-automation, too, we should also think of autonomous taxis competing with autonomous buses, which would be vastly more frequent than buses today.)
Advertising glorifies the tastes of the wealthy, not just to sell to them but to help less wealthy people form unrealistic tastes. “Service to your door” is yet another example of that kind of marketing. And whenever we are told to design things around technologies that only the fortunate can afford, we’re being asked to make a mistake called elite projection. Cities do not work for anyone unless they makes room for transportation that works for everyone. So they must be designed around what works for everyone. They must also be designed around solutions that are financially sustainable, which “service to your door” — when properly priced to account for its inefficient use of street space — is probably not.
But is “service to your door” relevant to suburban needs, or to the distinctly suburban “first mile last mile” problem? I’ll cover that in an imminent post.