A bump in the road for Uber as investors and transit agencies watch; HWR, June 21

Uber founder resigns (NYT)

180 days of change (Uber)

180 Days of Change

Five big venture capital firms that own a big slice of Uber stock forced Travis Kalanick out, reports the NYT. Overall investors have pumped $14 billion into Uber, a company who in a few years time has managed to become a verb and, at times, a cautionary tale about bad Silicon Valley behavior.

Shortly after the announcement, Uber also emailed its drivers, saying tips would soon be allowed. Based on my few Uber rides — including a $41.10 ride for 35.73 miles from the Cincy airport to the outer orbit of the Cincy ‘burbs on Saturday — few are too happy about the money they’re making.

And call me a dumdum, but I don’t get how Uber will ever be profitable if it can’t keep its drivers happy and in abundant supply along with cars that are nice and well-maintained. Yes they’ve done it so far but they also haven’t turned a profit.

As we wrote yesterday, Lyft is pushing for a billion rides a year by the mid-2020s in autonomous electric vehicles – with all the power from renewable sources. That cannot be a cheap thing to implement, even without having to pay annoying human drivers.

My point: the cost of these things have to go up. Unless I’m wildly mistaken, the cheap and plentiful rides that make ride hailing so popular do not seem sustainable. At all.

The transit industry will certainly be watching. There’s little doubt that ride hailing has impacted transit ridership, which fell at Metro last year and was down 2.3 percent across the U.S. in 2016, according to the latest numbers from the American Public Transportation Assn.

Transit agencies are also watching because many — including Metro — see ride hailing as a possible solution for getting people to/from transit stations. Partnerships to date between agencies and the Ubers and Lyfts of the world have been limited but there has certainly been a lot of talk.

So we’ll see. I don’t think ride hailing is going anywhere. But as the old saying goes, when something appears to be too good to be true…perhaps it is and I don’t think cheap rides will last forever. Your thoughts? I am sure there are some pretty good business minds among Source readers.

Urban-style upgrade planned for Warner Center complex as Woodland Hills gets citified (LAT)

As originally envisioned, Warner Center was going to be the San Fernando Valley’s downtown. It hasn’t quite worked out that way with WC more resembling a conventional suburban office park — with lots of sprawling parking lots.

But the city of L.A. has already approved zoning changes to densify the area and there are several developments in the works that will make WC a more live-work-play type of place. That strikes me as a smart move, although all the talk lately of the demise of retail can’t be music to any developers’ ears.

Orange Line service is already in place to WC, of course, although direct service may change to a shuttle type configuration with more stops and connections to Canoga Station.

Speaking of downtowns…

Google downtown village plan gets its first OK (Mercury News)

The plan would remake downtown San Jose to accommodate offices for 20,000 Hooli, I mean, Google employees. The idea has Google partnering with the development firm Trammel Crow (which is in negotiations with Metro on the NoHo joint development project) to build millions of square feet of offices adjacent to the city’s central rail depot.

It could be a pretty choice spot, transit-wise. Downtown San Jose is already served by commuter rail to both San Francisco and the East Bay and there is also light rail.

The BART regional rail system also has plans to extend a line into San Jose by 2026 although it will need federal funding from the New Starts program to do so — and such monies aren’t exactly forthcoming these days. As you may have heard, the Trump Administration has proposed not funding new New Starts projects, including section three of the Purple Line Extension. Stay tuned on that one.

 

 

 

 

 

1 reply

  1. I can’t speak to the economics of Uber / Lyft, waaay not my industry, but from a management perspective their software driven, distributed transport model would appear to have the best chance of solving the “last mile problem”.

    Public transit agencies are by their nature: bureaucratic, plodding, inefficient, and focused on major transport corridors. Getting commuters to public transport stations is a problem too “noisy” for the public transport model to handle, hence they call it the “last mile problem” and largely hand wash themselves of the issue.

    Whether the ultimate solution could be “Johnny cabs” or something similar with more shuttle-like vehicles, the public transit industry should be partnering with the ride-hailing start-ups now. My concern is, like the antiquated taxi industry, public transit leadership is hoping the ride-hailing model fails. That would be unfortunate given public transport is currently irrelevant to the majority of commuters primarily due to the “last mile problem”.