The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Tuesday, January 25, 2022

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 The premise for the research was the promise that Uber and Lyft originally made to justify their business models: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
© Sage Publications, 2020

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That Uber or Lyft Trip May Be Worse for the Planet Than Driving Yourself
By Laura Bliss
September 30, 2021
Bloomberg