The New York Times)
Aug. 10, 2018
Technology has made it easier to identify and manage the optimal supply, but it also depends on which problem you’re trying to solve.
When Uber and Lyft first entered the market, offering a ride-hailing service that would come to include tens of thousands of amateur drivers, most major American cities had been tightly controlling the competition. New York City allowed exactly 13,637 licenses for taxicabs. Chicago permitted 6,904, Boston 1,825 and Philadelphia 1,600.
These numbers weren’t entirely arbitrary. Cities had spent decades trying to set numbers that would keep drivers and passengers satisfied and streets safe. But the exercise was always a fraught one. And New York City now faces an even more complex version of it, after the passage of legislation this week that will temporarily cap services like Uber and Lyft.
The city plans to halt new licenses for a year while it studies the impact of ride-hailing and establishes new rules for driver pay. In doing so, it renews an old question: What’s the right number of vehicles anyway?
The answer isn’t easy because it depends largely on which problem officials are trying to solve. Do they want to minimize wait times for passengers or maximize wages for drivers? Do they want the best experience for individual users, or the best outcome for the city — including for residents who use city streets but never ride taxis or Uber at all?
All of these goals are in tension. If you’re a ride-hailing passenger, you may want cars to materialize at your doorstep instantaneously. But a system that can do something like that probably also has a lot of empty cars waiting around, contributing to congestion and lowering driver wages.