Is it a good approach for Altamonte Springs to subsidize Uber rides?

File illustration picture showing the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign

Last week, Uber and the city of Altamonte Springs, a suburb of Orlando in Florida, announced a partnership which is the first case of its kind in the United States. To be specific, Altamonte Springs will offer a 20 percent discount on all Uber trips within city limits starting from March 21. Also, all Uber trips starting or ending at the Altamonte Springs station will receive a 25 percent discount in order to encourage SunRail ridership.

So basically, this project aims to integrate transportation network company (codified in California law), Uber into the transportation network, get cars off the road and induce people to use mass transit.

Will it work?

From a transportation point of view, I would like to say it is likely to work well. A research conducted by UC Berkeley in 2014 supports that ridesourcing company plays a vital role to complement transit and even substitute for longer public transit trips. And based on the data of another ridesourcing provider Lyft, 25% of its trips in San Francisco area are to or from Caltrain stations. In this case, mass transits are benefited to some degree. But still, more researches are needed in order to make a strong point.

Is it right to use city’s budget to subsidize Uber rides?

There are some people opposed to this project just because of budget. But as I see, the transit ticket in the USA is heavily subsidized. The national average subsidies cover around 33% of operating cost of transit. So since the uber rides could act as a role of complement of transit, why could they not get subsidies as transit? Besides, one of this project’s purpose is to test whether it can save millions of dollars in road building and other public transportation expenses just by subsidizing the cost of Uber rides. If the outcome shows pretty great, the budget for Uber rides is quite a small amount compared to the road construction budget saving.

How about public acceptance?

One big issue for this project is, not everybody has a smart phone or even a phone. Advocates for the homeless and poor who rely on buses think this project will not help this group of people because they don’t have easy internet access. However, since the project’s objective is to get cars off the road and induce people to use mass transit, I think the problem for homeless and poor can be solved postponed. From my perspective, the government and Uber company could consider expanding the range of benefits to homeless and poor when this project really works.

In conclusion, I am quite positive to this partnership of city and Uber. But will this project achieve our expectation? It takes time to verify.

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