The Effects of Uber and Lyft in U.S. Cities (2024)

November 30, 2022

By: Sherry Stokes

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Ride-hailing services like Uber and Lyft have redefined mobility and affected travel patterns, car ownership, congestion, the economy, the environment and equity in cities across the globe. A new policy brief series(opens in new window) delves into the implications and opportunities that transportation network companies (TNCs) present.

The series summarizes key findings and recommendations from a compilation of studies conducted by Jeremy Michalek(opens in new window), the lead author, and other Carnegie Mellon University College of Engineering(opens in new window) researchers.

The first brief in the series examines how Uber and Lyft have affected U.S. cities during their transformational growth over the last decade. "That question is important because it helps us understands whether TNCs are providing social benefits in cities and whether cities should have a friendly or more skeptical posture toward them," said Michalek, a professor of engineering and public policy(opens in new window) and mechanical engineering(opens in new window).

The researchers found that TNCs have increased economic growth, employment and wages for intermittent jobs in U.S. cities. However, TNCs are not a reliable way to reduce car ownership. When TNCs entered U.S. cities, car ownership actually increased in car-dependent and slow-growth cities, and TNCs displaced transit ridership most in cities with high income and fewer children. "Overall, Uber and Lyft affect different kinds of cities differently, and that is important to understanding their impact," said Michalek.

The second brief examines traffic implications of Uber and Lyft, finding that they can clean the air but clog the streets. Taking an Uber or Lyft ride instead of a personal vehicle can reduce air pollution costs by 9-13 cents, but the extra driving to and from passengers increases other costs from congestion, crash risk and climate change by about 45 cents. "You create lower external costs to society when you drive your personal vehicle, on average," says Michalek.

This raises the question: Should governments encourage shared rides through TNC ride pooling?

"We found that policies in Chicago intended to increase ride pooling actually worked. However, while pooling can substantially reduce traffic costs, private incentives already encourage pooling at levels that are fairly efficient for society, so imposing much higher pooling rates may come at a cost," said Michalek.

The third brief examines environmental aspects of Uber and Lyft. In response to environmental concerns and public interest, Uber and Lyft have committed to electrify more of their fleets in the coming years. The researchers conducted simulations and found that when TNCs are faced with the air emission costs that their fleets impose on society, they electrify more of their fleets, reducing air emission costs by 10% in New York City and up to 22% in Los Angeles. This suggests that policy interventions to encourage electrification of TNC fleets may be warranted. Yet flexibility is important because the researchers found that the best fleet is typically a mix of electric and gas-powered vehicles.

Finally, the last brief in the series examines the capacity for Uber and Lyft to reveal and potentially address societal inequities. In one of the studies, the researchers examined TNC ridership during heatwaves in New York City in 2019, finding that ridership increased more in high-income neighborhoods than in low-income neighborhoods, suggesting that low-income riders are subject to endure more extreme heat and humidity.

"We've been doing a lot of work on Uber and Lyft over the past six years, and this brief series provides a compact summary of what we have learned and what we recommend — both for cities and for travelers wishing to reduce negative effects of their travel choices on society," said Michalek.

Portions of this policy brief were supported by the National University Transportation Center for Improving the Mobility of People and Goods(opens in new window) (Mobility21) at Carnegie Mellon University.

The Effects of Uber and Lyft in U.S. Cities (1)

The Effects of Uber and Lyft in U.S. Cities (2)

Who's Paying For Your Uber?

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The Effects of Uber and Lyft in U.S. Cities (3)

Should Uber And Lyft Be Electrifying More Vehicles?

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The Effects of Uber and Lyft in U.S. Cities (4)

The Impact of Rideshare Apps

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The Effects of Uber and Lyft in U.S. Cities (2024)

FAQs

The Effects of Uber and Lyft in U.S. Cities? ›

Uber and Lyft had minimal impact on the number of personal vehicles on the roads. Instead, the services became another option as a form of transit or replaced public transportation. Interestingly, in car-dependent and slow-growth cities, these services led to an increase in car ownership.

How does Uber affect cities? ›

Taking an Uber or Lyft can drop air pollution costs by 9-13¢ per trip. But the extra driving creates additional external costs of 45¢ per trip from crashes, congestion, climate change, and noise. To reduce external costs, encourage pooled rides and reduce transit displacement.

What impact did Uber have? ›

Uber's entry into the taxi industry disrupted traditional business models. Unlike conventional taxi services, Uber does not own a fleet of vehicles or employ drivers. Instead, it introduced the concept of "ride-sharing," wherein ordinary individuals with a car could sign up as drivers.

How has Uber affected the economy? ›

Because Uber is unlocking a new kind of mobility for many riders and unlocking a new kind of flexibility and independence for many drivers, traditional estimates of pure cost savings or pure income gains on either side would fall short. Uber's contribution to the U.S. economy is $17 billion in gross domestic product.

What was the effect of Uber and Lyft entering the taxi market? ›

Decreased market share

The rise of Uber and Lyft has resulted in a significant decrease in market share for traditional taxi services. As more and more people opt for the convenience and affordability of ride-hailing, traditional taxis have struggled to compete.

How does Uber benefit the community? ›

Uber pledged 10 million free rides and deliveriesto healthcare workers, seniors, and people in need. Since the beginning of the pandemic, Uber Freight has carried over 1 billion pounds of emergency relief equipment and has helped in the distribution of PPE to drivers.

Is Uber good or bad for the economy? ›

As you can see from the data, this report demonstrates that Uber has a net positive contribution to the national economy and at local levels. It is also clear from the study that Uber is part of a dynamic ecosystem: Uber riders rely on many interconnected options.

What is the biggest problem with Uber? ›

Overview:
  • Regulatory Challenges: One of the primary problems faced by Uber is the regulatory landscape. ...
  • Safety Concerns: Ensuring the safety of both riders and drivers has been a significant challenge for Uber. ...
  • Labor Issues: ...
  • Ethical Concerns:
Mar 19, 2024

Is Uber good for cities? ›

Uber Movement provides new resources to urban planners

Making data accessible to urban planners helps give them more resources than ever to design the cities of the future. And that could translate into smarter, more efficient, more enjoyable cities for all of us.

How did Uber disrupt the industry? ›

Uber redefined the ride-sharing category by introducing innovative features such as cashless payments, upfront pricing, and driver ratings. Dara Khosrowshahi, Uber's current CEO, highlighted the company's impact, stating, “Uber didn't just disrupt the transportation industry; it redefined it.

What are the negatives of Uber? ›

Cons
  • Pricing. There's no way to predict how much an Uber ride might cost. ...
  • Driver Cancelations. Uber drivers can cancel rides. ...
  • Not Available in All Cities and Locations. Uber is widespread and located in 900+ cities, but it isn't available in every city or location where you might need it.
Jun 19, 2023

Why is Uber a problem? ›

Uber has been criticized for its strategy of generally commencing operations in a city without regard for local regulations. If faced with regulatory opposition, Uber called for public support for its service and mounted a political campaign, supported by lobbying, to change regulations.

What are the positive externalities of Uber? ›

Uber's positive externalities

In many cases Uber is cheaper and more convenient than the taxis that were an option in such circ*mstances. If that's right, then Uber (and other convenient “rideshare” services) will have reduced the incidence of drunk driving, and the accidents and fatalities resulting.

Is Uber good or bad for society? ›

Taking an Uber or Lyft ride instead of a personal vehicle can reduce air pollution costs by 9-13 cents, but the extra driving to and from passengers increases other costs from congestion, crash risk and climate change by about 45 cents.

What are the risks of Uber and Lyft? ›

Both Uber and Lyft have had their share of reported incidents—Uber alone faced nearly 6,000 reports of sexual assault over a two-year span while Lyft revealed more than 4,000 assaults between 2017 and 2024.

Why are Lyft and Uber losing money? ›

However, the sheer number of operating costs that remain within Uber including the payment of drivers, as well as the marketing scheme to attract riders has skyrocketed leaving the vast amount of ride sales useless in regards to positive profit earnings.

Does Uber take you to different cities? ›

With an Uber account, you can request a ride in any city where Uber operates, 24 hours a day, 7 days a week.

Why are cities banning Uber? ›

Their issue is that because Uber drivers do not have to obtain legal permits, they offer unfair competition to other transportation agencies. Uber did eventually get legalized, but it has been under strict regulations for both vehicles and drivers.

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