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Uber and the Transportation Revolution

For all of the debate on the ways that Uber and its peer ride-sharing companies affect the labor market for transportation, there seems to be relatively little interest in how the transportation revolution could bring about environmental or social change. Yet, as these services are increasingly shifting their focus from individual trips toward carpooling for riders heading the same ways, these potential benefits are worth consideration, too. According to data compiled by Uber on the first 100 days it operated its carpooling service (UberPool) in China’s fourth largest city, Shengdu, it spared the city an extra 885 tons worth of CO2 that would have been emitted had each traveler ridden alone. From VentureBeat:

The emissions savings is something that anyone who has been to one of China’s major cities should be glad to hear about– China has among the worst levels of air pollution anywhere in the world.

In truth, 885 tons is nothing to shout about in the grand scheme of things. Emissions from the global shipping industry, for example, are said to amount to around 1 billion tons per year. But cars and trucks still account for nearly one-fifth of all emissions in the U.S., and those numbers are likely even higher in fast-growing countries like China.

Remember, this is just one city (albeit China’s fourth-largest, with a population of more than 14 million). The numbers really start to add up when accumulated across hundreds of cities around the world, especially if you take into account huge emerging markets like India.

As Uber continues its push into the often overcrowded cities of developing countries, the emissions savings could be significant. And while one is leery to take the word straight from the horse’s mouth, it seems plausible that the company will make the data available for verification. For a company running a gauntlet of legal and regulatory opposition, sharing these data on the benefits of its service would certainly be in its interest.

Yet, as Tyler Cowen argues at Marginal Revolution, the success of Uber may leave consumers less, not more, happy with their transportation options. As he puts it, if the overall number of vehicles decreases because individuals have less need for personal cars, so will the flow of “available vehicle time.” Thus, the decrease in supply (and increase in demand) will drive prices and wait times higher.

Ultimately, it’s hard to predict how large both Uber’s role and the effect of that role will be in the future of transportation. What is clear, however, is that a fundamental change in the way that people move from place to place is coming, and the potential benefits to society—from emission reduction to savings on infrastructure construction and upkeep—are huge. Still, nearly all of the discussion surrounding ride-sharing is singularly focused on the destruction of the taxi industry, rather than the creation of new, transformative transportation options. While policymakers and politicians may have their eyes on the issue, they’re looking at it the wrong way.

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  • Andrew Allison

    Tyler Cowen is apparently ignorant of the law of supply and demand. As prices increase, more people will be drawn to providing the service.

    • Kevin

      His point is that there’s a lot of stranded capital investments in autos that is driving down the price right now. As this capital,depreciates much of it will not be replaced if prices for rides are low. This will lead to pice increases and supply reduction as compared to the curren situation.

      That said, while his point is logical, I’m not at all sure he’s right about how it will play out.

      • Andrew Allison

        The supply of willing drivers will increase, not decrease, with higher prices.

  • Jim__L

    So, how many tons of carbon were emitted in Shengdu in those hundred days despite the 885 ton reduction? It’s not very fair to compare a local 885 tons to “global shipping”, if that 885 ton number makes a noticeable difference in air quality for that particular city.

    Not everything has to be about saving the world.

  • Boritz

    There is a case here for Uber to sell carbon credits to the organizers of the next climate summit to offset those huge clouds of CO2 the greens generate on a regular basis. The trading of carbon credits is a dream of environmentalists. They can begin by paying Uber. Compliments and thanks to Uber are also in order along with the cash.

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