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The Shifting Ride-Share Marketplace: Fare Game

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Experts believe that Lyft and Uber will have to raise their fees and fares in the next year.

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Lyft and Uber, which are the two largest ride-sharing services in the United States, say that by 2020, when you use a mobile app to summon a ride from them, a self-driving vehicle might show up to take you to your destination.

That sounds ambitious to us, considering the amount of work that remains to be done on the infrastructure, regulations, safety and technology of self-driving vehicles. However, the two companies are pushing ahead.

Uber rolled out prototype self-driving vehicles in 2016 in Pittsburgh and in 2017 in Tempe, Arizona, and it has hundreds of engineers who are developing self-driving technology and installing self-driving hardware in Ford Fusions and Volvos. Lyft, General Motors and software developer nuTonomy joined forces in 2017 to develop self-driving technology, and Lyft predicts that by 2025, it will deliver at least 1 billion rides every year in self-driving electric vehicles.

Nine transportation experts tell Consumers Digest that 2020 is too soon for the mainstream-consumer adoption of self-driving vehicles but that Lyft and Uber are making progress, and it’s quite possible that the ride-sharing services will have self-driving vehicles on the roads by then. In June 2016, U.S. House Committee on Energy and Commerce began to consider 16 draft bills that would establish the first federal regulations that allow for self-driving automobiles. If any of those were passed, the bills would supersede state laws, some of which limit the development of self-driving automobiles. (Experts say the draft bills have bipartisan support, but they don’t know when finalized bills would be introduced.)

As of press time, 360 U.S. cities had at least one ride-sharing service, compared with 83 cities 3 years ago. Experts say nearly 80 percent of the U.S. population lives in an area that’s covered by a ride-sharing service. Goldman Sachs says ride-sharing services provide 15 million trips per day worldwide and are expected to provide 97 million trips per day by 2030.

Uber accounts for 75 percent of the ride-sharing market in the United States and covers 234 U.S. cities. Lyft, which accounts for nearly 25 percent of the ride-sharing market in the United States, added its service in 160 U.S. cities in 2017 to bring its total number of cities to 360. (Besides Lyft and Uber, we found 14 smaller ride-sharing services that are in the United States, but none of those services covers more than three cities.)

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Expanding ride-sharing service is good news for consumers, who stand to save money and save time. We found that ride-sharing apps are easier and faster to use than is hailing a taxi and, in almost all cases, significantly less expensive—for the time being. Nationwide, if you use Lyft or Uber, traveling 1 mile typically costs 90 cents to $1.10, while a 1-mile ride in a taxi typically costs $2.25–$2.75, according to Harry Campbell of Therideshareguy.com, which provides a blog and a podcast that cover the ride-sharing industry.

We found in June 2017 that a nonpeak-time ride from the Chicago suburbs to O’Hare International Airport costs $38 in a taxi but typically costs just $25 through a ride-sharing service. (During peak times, you might pay twice as much.) A 9-mile trip in Syracuse, New York, that costs $31.60 in a taxi costs just $15.70 during nonpeak times via Lyft or Uber. What’s good news is that both companies now disclose the total cost of your ride before you get into the car.

Joseph Schwieterman of DePaul University’s Chaddick Institute for Metropolitan Development says it’s great that consumers have more transportation options than ever before: public transportation, ride-sharing services and taxis.

“The long-range question is, can everyone coexist?” Schweiterman says.

That’s a good question. If you follow the news, then you know that Uber suffered through a turbulent first half of 2017: a viral boycott that led about 500,000 users to delete their Uber account; allegations that Uber engaged in intellectual-property theft, cheated drivers out of pay, tracked users without their consent and used software to evade government regulations; and a corporate environment that was so toxic that the company lost its president, senior vice president of engineering and CEO within 5 months.

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