Feb 13, 2020 - Technology

When Uber left Austin

Traffic moved faster in Austin after Uber and Lyft left the city.

Reproduced from Tarduno, 2019, “The Congestion Costs of Uber and Lyft”; Chart: Naema Ahmed/Axios

By the numbers: Daytime traffic sped up by about 3.4%, according to a new paper from Matthew Tarduno, a graduate student at UC Berkeley. That's about 0.1 minutes per mile.

Why it matters: Tarduno's paper shows that Uber and Lyft increase the number of cars on the road, exacerbate congestion, and decrease traffic speeds — even if the effects in Austin were relatively modest.

Background: After Austin insisted that Uber and Lyft drivers pass background checks, both companies ceased operations in the city overnight. (They eventually returned after the state of Texas effectively overruled the city.)

The bottom line: Tarduno calculates that while faster traffic is worth $61 million a year to Austinites, that's roughly the same as the value to citizens of having Uber and Lyft (also known as transportation network companies) in the first place.

  • "TNC activity can be viewed roughly as a transfer," he concludes. "The consumer surplus enjoyed by TNC passengers is of similar size to the time loss incident on incumbent drivers."

Go deeper

How Uber, Lyft made traffic worse

Photo: Smith Collection/Gado/Getty Images.

Ride-sharing companies aren't the traffic solution they'd once hoped to be, the Wall Street Journal reports.

The big picture: "Multiple studies show that Uber and Lyft have pulled people away from buses, subways and walking, and that the apps add to the overall amount of driving in the U.S.," per the Journal.

Scoop: Lyft acquires cartop advertising startup Halo Cars

Photo: Drew Angerer/Getty Images

Lyft has acquired Halo Cars, a small startup that lets ride-hailing drivers earn money via ad displays mounted atop their cars. Lyft confirmed the deal but declined to share any details.

Why it matters: Ride-hailing companies are increasingly eyeing additional ways to generate revenue, and Lyft rival Uber has been quietly testing a partnership with New York-based Cargo that gives it a cut of the advertising revenue, as I previously reported.

Uber's AB5-related changes haven't been great for California riders

Photo: Smith Collection/Gado/Getty Images

Prices and wait times have gone up for Uber passengers since the ride-hailing began making changes last month because of a new state law that makes it harder to classify workers as independent contractors, Uber CEO Dara Khorowshahi told analysts on Thursday.

Why it matters: Uber and other companies like Lyft, Postmates, Doordash have aggressively pushed back on the new law, known as AB5, as it threatens their business models.