Strategic CSR - Uber/Lyft

The article in the url below reports on recent research that conducts a marginal cost-benefit analysis for each person that switches from a private car to only using a ride-hail company. The premise for the research was the promise that Uber and Lyft originally made to justify their business models:

"A decade ago, Uber Technologies Inc. and Lyft Inc. charged into cities with a promise: By reducing personal car trips, ride-hailing businesses could both ease traffic and bolster the use of public transit. What happened was the reverse: A host of pre-pandemic research linked the rise of these services to sharp upticks in traffic and waning ridership on buses and trains."

The results were quite surprising. Even more surprising is that, even if all the Uber and Lyft vehicles become electric, that is still not going to tip the balance:

"Now a new study puts a price on the external costs that come with switching from a personal vehicle to one from a transportation network company (or TNC): about 35 cents per trip on average. And it finds that even a fully electrified fleet of ride-hailing cars may not fully mitigate the extra toll they exact on society compared to driving yourself."

Some detail about the study (see also, here):

"To determine the role that ride-hailing plays in generating these often-hidden effects, [the authors] simulated replacing 100,000 private passenger vehicle trips with TNC trips in six U.S. cities, using publicly available ride-hailing data from New York City, Austin, Chicago and the state of California. Through a review of other studies that have quantified the externalities of driving in general, such as local air pollution, greenhouse gas emissions and traffic deaths, they approximated the dollar amounts that society saves or spends when travelers choose Uber or Lyft over their own automobiles."

Of course, there are some benefits, but the net effect is pretty clear:

"Ride-hailing helps on at least one front, the researchers found: air pollution. … But that benefit was undone by the negative impacts of deadheading, or the time in between trips when drivers are traveling passenger-free to their next pickup."

The overall result?

"All told, switching from a private car to a TNC increased net external costs by 30% to 35%, or about 35 cents per trip. … In other words, even a fully electrified ride-hailing industry — the likes of which Uber and Lyft have both promised by 2030 — would not be enough to make up for the congestion and deaths created by the added TNC miles."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

That Uber or Lyft Trip May Be Worse for the Planet Than Driving Yourself

By Laura Bliss

September 30, 2021

Bloomberg

https://www.bloomberg.com/news/articles/2021-09-30/adding-up-ride-hailing-s-hidden-environmental-costs

Strategic CSR - Buses

Following on from Monday's newsletter, the article in the url below presents the results of some data analysis that I found surprising:

 

"Sometime around 2013, bus ridership across much of the country began to decline. It dropped in Washington, in Chicago, in Los Angeles, in Miami. It dropped in large cities and smaller ones. It dropped in places that cut service, and in some that invested in it. It dropped in Sun Belt cities where transit has always struggled to compete with the car, and it dropped in older Eastern cities with a long history of transit use. By late 2019, through nearly seven straight years of decline, national bus ridership in America was at its lowest level since the mid-1970s, a trend that has left service already weakened as transit agencies brace for a public health crisis."

 

A graphic in the article reveals the extent of the decline in specific cities:

 

 

As always, attempting to work out what caused such a decline is challenging:

 

"The answer probably lies deep in a number of trends: the rise of on-demand technology, the changing nature of work, the evolution of e-commerce, the redevelopment of city centers, the influx of young professionals, and the suburbanization of the poor. Many seismic shifts in urban life are reflected in this one data point — the broad decline of bus ridership. … That's worrisome both for the remaining riders and for cities that will need strong mass transit to meet their climate goals."

 

One variable that needs to be controlled for is overall traffic – commuting traffic, in particular. The article suggests that, throughout the period under study, the economy was strengthening, which means there should have been more workers with more jobs requiring them to commute. But, if commuting traffic was declining at a faster rate than public transportation (perhaps, as younger workers move downtown instead of living in the suburbs) then, relatively, public transportation is capturing a higher percentage of the commuting population, even though overall numbers are declining. If commuting traffic has been flat or increasing, however, that is a more worrying situation:

 

"In Minneapolis, bus ridership began declining in 2014 and has fallen by 26 percent. Some bus trips appear to have shifted to a newly opened light rail line. But Uber and Lyft have expanded in the city over this same time. Bike commuting has increased. The transit agency has also detected an uptick in car ownership in neighborhoods historically well served by buses. And in a strong economy, Metro Transit struggled to replace a generation of retiring bus operators, hampering service. Workers have simply had more options, as agencies around the country have found."

 

One shift over this period that was not accounted for in the analysis is the influence of ride-hailing apps, like Uber or Lyft. As I have noted previously, many suspect that part of the business model of these companies is to slowly under-price public transportation (or over-convenience passengers) and, then, after all the buses have been removed from our streets, they will be able to increase prices and riders will have no other choice (see Strategic CSR – Uber):

 

"Studies have been less conclusive on the effect of ride-hailing companies, in part because their user data hasn't been accessible to researchers. But preliminary findings from a continuing project through the Transportation Research Board show that the largest declines in transit ridership at the metro level can be attributed to the introduction of ride-hailing services. And in the largest cities, ride-hailing has affected buses more than rail."

 

In spite of this, I found these results surprising because my idiosyncratic perception is that public transport is increasing. But, I live in the middle of a city, and the fact that the numbers are down across most metro areas in the U.S. is compelling (and concerning). And, if we end up working more at home after this pandemic, we should expect these declines to increase.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The Mystery of the Missing Bus Rider

By Emily Badger and Quoctrung Bui

March 13, 2020

The New York Times

https://www.nytimes.com/interactive/2020/03/13/upshot/mystery-of-missing-bus-riders.html

 

Strategic CSR - Uber

The CSR Newsletters this week are on the topic of transportation, public and private, in and around our cities.

 

One of the many advantages Uber was supposed to bring was the reduction in traffic around our cities. If we all didn't need to buy cars, the argument went, congestion would drop, we could find something more useful to do with all the space taken up by parking spots, we would arrive for appointments on time (because we would not need to search for parking), and, of course, the air would get cleaner as emissions dropped. As noted in the article in the url below:

 

"Five years ago, Travis Kalanick was so confident that Uber Technologies Inc.'s rides would prompt people to leave their cars at home that he told a tech conference: 'If every car in San Francisco was Ubered there would be no traffic.'"

 

Well, file this under the bulging folder of unintended consequences, but you may not be too surprised to find out that it has not worked out quite like that:

 

"Today, a mounting collection of studies shows the opposite: Far from easing traffic, Uber and its main rival Lyft Inc. are adding to congestion in numerous U.S. downtowns."

 

The article begins to quantify the effect of ride-hailing cars on our city streets and it is not good. For example:

 

"In New York, for-hire vehicle trips more than doubled from 2010 to 2018, while travel speed in lower Manhattan slowed 23%."

 

Here are some more select statistics quoted:

• 2.5 miles an hour: "Average downtown San Francisco traffic speed slowdown due to ride-hailing apps between 2010 and 2016."
• About 40%: "The share of time ride-hailing cars in California and New York City cruise without passengers."
• 77%: "Share of ride-hailing trips that are requested for one party only, rather than pooled, in Chicago's downtown."
• 309%: "The rise in ride-hailing trips starting or ending in downtown Chicago between 2015 and 2018."

 

Of course, none of this includes the effect Uber has had on the people who drive these cars for us, the conditions they work under, and whether the rise of contract workers simply exacerbates inequality (e.g., see Strategic CSR – Uber). Now, how do we put that genie back in its bottle?

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The Ride-hail Utopia That Got Stuck in Traffic

By Eliot Brown

February 15-16, 2020

The Wall Street Journal

Late Edition – Final

B1, B6

https://www.wsj.com/articles/the-ride-hail-utopia-that-got-stuck-in-traffic-11581742802

 

Strategic CSR - Uber

The article in the url below does a good job of quantifying the effects of the gig economy on individual earnings:

 

"How much money do Uber drivers really earn? Since launching in 2009, the company has often changed its pricing model, and the amount of money Uber drivers make has shifted as well. Yet the company has become so large, and been studied so much, that a clearer picture has emerged of what a driver can truly expect to make."

 

The data summarized in the article comes from a lending company, Earnest, which drew upon loan data where applicants had reported the income they earn from Uber-like jobs. The results do not include information on whether the income is gross or net; or how many hours it took to earn the income:

 

"Earnest found that the median Uber driver makes $155 a month — third most among the nine gig platforms surveyed. (People working with Airbnb and Lyft tended to earned more.) Meanwhile, the average Uber driver makes $364 a month — fourth most — suggesting some drivers are taking home the lion's share of possible earnings."

 

Additional studies are also summarized and reveal some fascinating data. There are some great graphics in the article. Here is one comparing earnings across different firms in the sharing economy:

 

https://timedotcom.files.wordpress.com/2017/07/screen-shot-2017-07-05-at-12-14-36-pm.png

 

Here is another that breaks down earnings for Uber/Lyft drivers by age group:

 

https://timedotcom.files.wordpress.com/2017/07/gross-hourly-earnings-for-uber-and-lyft-drivers-by-age-1.png

 

And, here is another one showing earnings for Uber/Lyft drivers, by state and per trip, across the U.S.:

 

https://timedotcom.files.wordpress.com/2017/07/3048563-inline-i-1-uber-lyft-prices.png

 

Other studies reveal the variations among drivers across cities:

 

"For even more background on how much Uber drivers make, consider a 2015 study funded by Uber, which found that in its top-20 cities drivers averaged more than $19 an hour in earnings before expenses. However, a year later, internal Uber figures provided to Buzzfeed showed that after expenses were factored in, drivers in three markets — Detroit, Houston, and Denver — earned only $8.77, $10.75, and $13.17 per hour, respectively."

 

A key question the article doesn't raise, though – does the flexibility offered by such jobs outweigh the relative insecurity/low wages on offer? When I travel in an Uber car, I often ask the driver what s/he thinks about working for Uber. The most common answer I get is that they do not want to be an 'employee' and welcome the flexibility that Uber offers them. If so, are we (society as a whole) best served by letting these people structure their work lives as they wish, or by stepping-in to constrain them 'for their own good'? In other words, in a freely voluntary exchange of labor for money, is the driver working for Uber because s/he has to or because it provides them with the flexibility they otherwise cannot find in other jobs that may pay more (and include benefits), but ultimately are deemed to be less fulfilling?

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Here's How Much Uber Drivers Really Make

By Rob Wile

July 10, 2017

Money

http://time.com/money/4845407/uber-drivers-really-make-per-hour/

 

Strategic CSR - Sharing economy

The article in the url below sheds light on China's sharing economy. On the surface, the sharing economy in China is expanding at a rate that is almost incomprehensible in the West:

 

"Three years ago, bike-sharing didn't exist in China. Today more than 40 companies offer the service. And the top two alone, Mobike and Ofo, handle more than 50 million rides every day, solving the 'last mile' problem of getting people from public transportation to their homes."

 

As a result of this rapid expansion (or perhaps the reason it has been permitted), the Chinese government has now adopted the 'sharing economy' as a centerpiece of the country's economic development:

 

"The state-run press agency, Xinhua, has trumpeted bike-sharing as one of China's 'four great new inventions.' (The other three are mobile payments, e-commerce and high-speed rail.) It may sound absurd to compare a dockless bike to the world-changing inventions of China's past: paper, gunpowder, the compass and movable type. But the boast conveys the importance that Beijing assigns the 'sharing economy' in helping China make the leap from a manufacturing-based to a service-oriented economy. Last year, according to government figures, China's sharing economy accounted for more than $500 billion in transactions involving roughly 600 million people. (An estimated 55 million Americans will use a sharing service this year, according to a CBS report.) And with Beijing planning on an annual 40 percent growth rate, officials are commanding this new economic engine to account for 10 percent of the national gross domestic product by 2020 and 20 percent by 2025."

 

Digging deeper, however, the author highlights the differences between how the sharing economy is defined and how it is practiced:

 

"China's sharing economy has veered sharply away from how the term was originally defined: as a peer-to-peer exchange of underutilized goods and services. In China, 'sharing' now means almost any short-term rental of a product or service activated by a smartphone. Moreover, the things on offer, like Ofo's 6.5 million bikes, are not spread out among individuals but are owned by the tech companies themselves. The same is true for the spoils, from revenue to data. As a result, the ideals that still animate the concept in many other places — the reallocation of unused resources and the community that forms around it — are essentially absent in China."

 

What I found interesting about the article, however, was the underlying reason for the Chinese government's fixation with the sharing economy:

 

"Robin Li, the chief executive of the internet giant Baidu, said last year that 'the idea of a sharing economy is quite similar to that of a communist society,' because both focus on 'distribution according to need.'"

 

The problem with this is that it runs into the reality of human nature that, even in post-Communist contemporary Chinese society, suggests the 'sharing economy' may be more about convenience than 'need,' let alone trust:

 

"The prize for puffery, however, goes to The People's Daily, the Communist Party mouthpiece, which in August celebrated umbrella-sharing enterprises as 'a show of human care, releasing the warmth of the city.' A few weeks after that, nearly all 300,000 umbrellas distributed by a new company called Sharing E Umbrella had been either lost or stolen."

 

In reality, I think the term is also being stretched in the West. Now, it seems, most Uber/Lyft drivers treat the service they provide as a job, rather than 'sharing' an under-used asset with a stranger, while most Airbnbs seem to be investment properties, rather than someone's couch or spare room. Whether this matters, of course, is another thing. At a minimum, the 'community' that underpins the sharing economy suffers and the technology that founded it becomes merely another platform to bring together buyers and sellers. I remember back to the .com boom around the turn of the century when a company's share price would jump if the company changed its name from Widgit Inc. to widgit.com. The same is happening today with cryptocurrencies, while stories abound about excessive capital flooding Silicon Valley startups seeking returns in a low-interest rate world. While this reduces the importance of the stock market as a means of raising capital (a good thing), it is hard to escape the feeling that there are lots of flimsy ideas floating around fueling speculative bubbles.

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

China's Revealing Spin on the 'Sharing Economy'

By Brook Larmer

November 26, 2017

The New York Times Magazine

Late Edition – Final

14

https://www.nytimes.com/2017/11/20/magazine/chinas-revealing-spin-on-the-sharing-economy.html

 

Strategic CSR - Uber

From a CSR perspective, there are not many firms that have had a worse year than Uber. Just to mention a few 'highlights' – there was the #deleteUber campaign; the CEO caught on a dashcam screaming obscenities at one of Uber's drivers; the CEO bowing to public pressure to leave the President's advisory council; the exposure of the firm's sexist culture; the forced resignation of the CEO; and the very public boardroom battle to replace him (resolved, at last, earlier today). I might have missed some things. In short, it has been a bad year. In spite of that, as the article in the url below notes, the company is thriving:

 

"Uber has spent the past eight months reeling from a series of corporate scandals. Yet those have done little to deter people from hailing an Uber for rides. That became clear on Wednesday, when the ride-hailing company shared its latest financials with investors. According to the disclosures, Uber's gross bookings continued to increase in the second quarter, while its losses narrowed. Trip requests from riders also more than doubled over the past year."

 

If we are to believe the business case for CSR, it is hard to know where that leaves us. While Uber is still far from profitable and in spite of all its transgressions, it's performance has improved significantly throughout 2017. Specifically:

 

"In the second quarter, Uber's gross bookings rose to $8.7 billion, up 17 percent from the previous quarter. Uber's adjusted net revenue — or the amount of money earned after paying out its drivers — jumped to $1.75 billion from $1.5 billion over the same period. Ride requests increased 150 percent from a year ago, though Uber did not disclose the number of rides requested."

 

A key part of the framework underpinning Strategic CSR is the idea that firms survive and thrive by creating value for their collective set of stakeholders. If stakeholders do not care how a firm creates and delivers its product (and who it abuses along the way), but only care that the product satisfies their immediate needs, then we will get companies like Uber. In contrast, if stakeholders care about the way a firm conducts itself and seek to reward that behavior, then we will get others kinds of firms with different priorities. Either way, Uber is not the problem here – the firm's set of stakeholders (including its customers) have built a company that reflects their collective interests. If you continue to reward Uber with your loyalty in light of the problems that have been exposed this year (especially as there is a very effective, more socially-responsible competitor in Lyft), then how can we expect the company ever to change its business model? Especially when that model has worked for it so far (and continues to do so).

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/


Uber, Mired in Scandals, Sees Uptick in Bookings

By Mike Isaac and Tiffany Hsu

August 24, 2017

The New York Times

Late Edition – Final

B1

https://www.nytimes.com/2017/08/23/technology/uber-mired-in-corporate-scandals-sees-uptick-in-bookings.html