Uber and Lyft Costs: Drivers and Communities Pay the Price

The True Cost of Ridesharing: Beyond the Fare

The escalating costs associated with services like Uber and Lyft have revealed a lack of transparency regarding their underlying business practices. Recent research indicates that the subsidized prices offered to consumers don't represent the complete financial picture, with significant costs being transferred to both drivers and the communities they serve.

Analyzing the Impacts of Transportation Network Companies

A study conducted by Carnegie Mellon University examined the often-overlooked costs and benefits of Transportation Network Companies (TNCs), the term commonly used in academic and official contexts. The analysis focused on quantifying the broader impacts beyond the direct fare paid by riders.

Researchers discovered that rideshare vehicles generally contribute less air pollution per ride compared to personal vehicles. This is attributed to the fact that, as explained by lead author Jeremy Michalek, a vehicle emits higher levels of pollutants during its initial startup phase until the pollution control system reaches optimal operating temperature.

Because rideshare vehicles frequently avoid cold starts and tend to be newer models with lower emissions, a TNC trip is estimated to produce approximately half the pollutants of a comparable trip in a privately owned car. This translates to an estimated value of around 11 cents per ride.

Hidden Costs to Communities

While this may appear positive, the benefits are largely offset by factors such as “deadheading” – driving without a passenger or idling between fares – and the necessity of traveling to passenger pickup locations.

Furthermore, the increased traffic congestion caused by vehicles remaining on the road even when not actively transporting passengers, along with associated accidents and noise pollution, results in an estimated 45 cents per trip in costs to the community. This ultimately creates a net increase of approximately 34 cents per ride, borne by taxpayers or experienced as a diminished quality of life.

Image Credits: CMU

The researchers suggest prioritizing ride-sharing or utilizing public transportation whenever feasible, acknowledging the challenges presented by current pandemic conditions. While fleet electrification could mitigate some issues, it also entails substantial immediate and long-term expenses.

The Burden on Drivers

Drivers are also experiencing the financial strain of this “decentralized” industry model. A survey conducted by the University of Washington’s Marissa Baker among unionized drivers in Seattle revealed a widespread lack of support from the companies they work for.

Concerns about contracting COVID-19 were prevalent, with 30% of drivers believing they had already been infected. The majority reported income loss and having to personally fund personal protective equipment (PPE), with less than a third receiving masks or sanitizer from their respective companies.

Drivers who temporarily ceased working during the pandemic encountered difficulties in obtaining unemployment benefits. It’s important to note that in Seattle, the driver population is disproportionately comprised of Black men and immigrants, groups already facing unique socioeconomic challenges.

“Workers in this type of employment during the pandemic receive very little support from the companies they drive for,” stated Baker. “This population had a high awareness of the potential exposures they could be facing.” Drivers in other cities may face even more difficult circumstances, as Seattle offers additional protections not universally available.

The Value of Independent Research

These studies offer a glimpse into the concealed costs and complex economics of the “gig economy.” Consumers are often presented with a curated perspective from the companies themselves. Therefore, independent investigation, even in the form of surveys or estimations of undocumented costs, is exceptionally valuable in providing a more comprehensive understanding.