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Policymaking in the Public Right-of-Way: Car Sharing

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Patrick Mulhearn
June 21, 2019

Because life isn’t complicated enough already, now we have shared pogo sticks.

Our public rights-of-way—our local roads, sidewalks, and utility infrastructure—are the latest frontier of private industry speculation. And with successful, profitable inroads made in industries ranging from food delivery to, now, pogo sticks, it seems that anyone with a crazy idea for a startup need only look to the right-of-way for the free infrastructure they need to jumpstart their venture.

As discussed previously, all this profiteering has implications for the people who actually pay for this infrastructure: the residents of local jurisdictions (sometimes referred to as, “We The People” or, “Taxpayers,” but basically all of us). While these impacts are apparent when telecommunications infrastructure erupts from the utility pole in front of our house or someone dumps their shared bicycle or scooter on the sidewalk outside our office, it’s less apparent when the impacts are sprinkled throughout our cities and towns disguised as private vehicles.

Car-sharing services—whether owner-driven or shared vehicles—present an opportunity for private profits and special challenges to local governments seeking to regulate the use of public infrastructure. For example, while these services would appear to facilitate a car-free lifestyle, shared vehicles still need to be parked somewhere in the public right-of-way that is convenient to users, and owner-driven vehicles need to be constantly on the roads and continuing to contribute to congestion and vehicle emissions.

Cui Bono?

For owner-driven services such as Uber and Lyft, the benefits to a community would seem to be straightforward: provide an alternative to individual car use at a competitive price while providing a flexible revenue option for entrepreneurial residents. Some research has shown, though, that these services actually increase vehicle miles traveled and congestion, rather than reducing them, and their business practices have been decried for their treatment of their drivers. What this means for governments is that infrastructure impacts are actually amplified by these services and economic efficiencies aren’t really benefitting the people driving all those cars around. In fact, some analysts assert that the reason companies like Uber are profitable is that they prey on their drivers while remaining immune to the regulatory environment that makes traditional taxi companies marginal enterprises.

Shared-vehicle services such as Car2Go and ZipCar function very well in densely urbanized areas and offer users another transportation mode to compliment public transit or bicycle/pedestrian travel. According to ZipCar, half of their subscribers ditched their personal cars after subscribing. And while these vehicles still need curb-space for storage between uses, several people can share one vehicle rather than owning individual vehicles. In order to embrace this new reality, cities like Honolulu, HI, are considering reserved spaces for shared-car storage—similar to a neighborhood taxi stand.

A third mode of vehicle sharing offers car-owners opportunities to rent their vehicle like an AirBnB through a mobile application. These services—such as Getaround and Turo—are less common, but still require a relative amount of population density to be functional. The benefit to the car owner here is that they make revenue off their investment, and their neighbors benefit from not having to own the vehicle they’re using. The same infrastructure and environmental impacts exist, but they’re now shared amongst a localized group of people rather than spread throughout the network.

Each of these modes offers benefits to the users but require significant investment in public infrastructure in order to function. The question for policy-makers, then, is who benefits and how can these benefits be maximized for the greatest number of people. The aggressive growth-at-any-cost philosophy of most startups is incompatible with the deliberative and incremental nature of government. Agencies and public officials should ensure that public benefit be paramount in the regulatory schemes they enact.

Still About the Data

In each of these modes, the core product isn’t transportation, it’s data. Data is the fungible asset in our app-based economy, and these companies are no different from any of their cousins in food delivery or homestays. The real profit is in the user information these companies gather. Uber, for example, is on a path to corporate legitimacy now not because of its IPO but because of its huge trove of data.

Just as with bike sharing companies, this data is also valuable to local governments for planning purposes; but it’s very difficult for localities to compel multi-national corporations to comply with such requests. Uber, for example, has pushed back against attempts to regulate their activities in New York, Seattle and San Francisco. In fact their investment prospectus lists, “The adaptation of our operations to local practices, laws and regulations,” as a risk to their future profitability.

Local governments are frequently cast as the villains in these scenarios, but localities have a legitimate function in the regulation of the public right-of-way. Rather than pushing back against regulations, companies like Uber should engage with regulators to find ways to minimize externalities related to their business practices and also offer some sort of remuneration to mitigate impacts that can’t be minimized. Data-sharing would be an excellent place to start.

Author: Patrick Mulhearn, MPA, is a public policy analyst for the Santa Cruz County, California, Board of Supervisors. He focuses primarily on policies relating to telecommunications and transportation infrastructure and may be reached at [email protected].

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