Analysis
2 May 19

Uber as a true alternative for personal cars

Uber is adding public transit to its app in London, after its debut in Denver. Is the ridehailing company becoming a transportation aggregator? 7 questions answered.

What happened in London?

Uber adds public transportation schedules and directions to its app in London. As from now Uber riders in London will get not only a proposed route with an Uber car, but with public transportation as well. So, riders will get a time and cost comparison between driving private and driving public. 

Why London?

It is kind of ironic that Uber chooses London to launch its service in the European market, since the London City transportation authority revoked Uber’s licence to operate in the city in 2017. Yet, the company re-entered the London market in June 2018 after applying for a new license. 

Why public transit?

Initially Uber was only a ridehailing company. Yet, we are seeing Uber move into other mobility segments as well, such as the acquisition of Jump Bike to offer bike sharing.  

The added feature can be seen as ‘part of Uber’s broader effort to become a one-stop shop for all modes of transportation’, according to The Verge. Londoners will not only get suggestions for bus or train rides, but also all kind of public transit, from train, tram, shuttle, boat, light rail and even commuter rail services across Greater London. 

“As part of our objective to become a leader in mobility, our commitment to transit remains strong as ever. We want to work with cities and partners across the globe to help make transit better by extending transit's reach, and by giving users new ways to plan their transit journey and eventually pay their fare through the Uber app,” said Uber’s spokesperson. 

Will Uber smooth traffic?

The move of the company comes at a good time, since there is the criticism that ridehailers such as Uber actually add to traffic congestion and compete with public transport. Various studies in the US have related the decline in public ridership with the increasing presence and usage of ride hailing companies.

An argument that Uber initially indirectly confirmed by calling public transport among its competitors. Yet, by adding this feature to its application, Uber might actually address the criticism by (1) bringing people towards public transportation instead of taking them out, and (2) by becoming the first and last mile of the transportation solution rather than the entire mileage driven, hence addressing traffic congestion. 

Why now?

The feature comes at a good timing in London, right after the introduction of the Ultra Low Emission Zone, which might restrict a certain amount of even Uber vehicles to enter the city centre of London as well.
In addition to the ULEZ, since last month private for-hire vehicles, such as Uber, are no longer exempt from the daily congestion charge for driving in central London, which is about 11,50 GBP a day for all non-zero emission vehicles. Zero emission vehicles could still enter the centre for free. 

The last two remarks may make it no surprise Uber takes of this service in London as first European city. 

Why does this matter for the world? 

London is not the only city where Uber is expanding its options. Uber started a similar service in Denver, Colorado, earlier this year, where real-time public transit information was provided thanks to the platform services of Moovit. A partnership with mobile ticketing company Masabi unlocked the possibility to buy train tickets via the Uber app as well. And The Verge claims that Uber hopes to expand the service to various other cities in the following months. 
“Various partnerships across the globe, like in Denver and London are examples of our collaborative and inclusive approach to public transportation,” an Uber spokesperson told us.

What shall the future bring? 

Does this move of Uber mean that the ridehailer is expanding its services towards becoming a mobility aggregator rather than ride hailer solely? And will the service expand towards other countries / cities? For the moment the extra feature in the London app only makes a route suggestion, but does not allow riders to book and pay their public transit ride. However, this is a service Uber would like to include in the app later on as well. 

Hence, Uber, the ridehailing service, might morph into a mobility aggregator. Good to know is that the ridehailer actually might be inspired by other mobility providers who are evaluating into the same direction, including its main rival Lyft. As such Uber can keep its customers in one app, the Uber app, rather than having them to switch between various apps to access various transportation modes. 

In the long-term Uber might become a one-stop shop for all modes of transportation, starting in Denver for its US market and in London for its European market. 

“We want to make it easier for people to getting from A to B, whether that is by car, bike or public transport,” said Uber’s spokesperson, “To eventually become a true alternative for the personal car, we believe users should be able to choose and swap between the best transport option for you in one app.”

Authored by: Fien Van den steen
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