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I've seen the future, and the private car is alive and well

By David Seymour 
web posted November 29, 2010

Two years ago the prevalent narrative around cars was that they were dead.  It was unthinkable that beleaguered General Motors would re-list two years later with a heavily oversubscribed initial public offering, as it just did.  At the same time cities from Victoria to Toronto are grappling with traffic congestion.  Market confidence that there'll be more cars and municipal anxiety about accommodating them are two trends on a collision course, but there are good reasons to believe that new technologies will avert disaster.

One such technology is ride sharing, invigorated by mobile phones that are online and GPS capable.  It is claimed that 85 per cent of car seats are empty at any given time that a vehicle is in motion. Just as eBay now rehabilitates idle household junk, empty car seats are a reservoir of unused value now ready to be unlocked by a more efficient communication network. 

Several months ago at a conference for the Association of Commuter Transportation (ACT), ridesharing went viral and reached a critical mass.  The conference hotel was in a remote location in California but many delegates were without their cars, so they pooled the vehicles that were available using an iPhone application called Avego Driver.   

270 delegates organised 529 shared trips over three days, saving an estimated $43 each, and reducing total carbon emissions by around four tonnes (for perspective, a group of 270 average Canadians would normally emit about 37 tonnes every three days).

In order to share a ride with a stranger, you need to know their travel plans.  Then you have to trust them.  If it's going to be more than a passing fad, you need a method of payment that isn't socially awkward.

The real revolution is the GPS capability of more and more mobile phones.  Because the phone "knows" your location, and because your destination can be entered with one touch, all of the matching can be done instantaneously without clunky web forms or manual invitations.

Instead, as soon as the software discovers a driver and rider with compatible travel plans, both receive a proposed pick up time.  They also get a picture and details of the other person and (for drivers) their car.  Another eBay parallel is the use of feedback ratings to encourage good behaviour. Get a few bad ratings on eBay and nobody will trade with you, so people behave well.  There is also a GPS located panic function and the option of selecting only people of your own gender.

It would be easy to dismiss this technology if it was some sort of hippy-esque exercise in idealism, but it incorporates market incentives well. The software automatically transfers real money from the rider's account to the driver's based on the distance calculated by the GPS.  Again, it's a technological breakthrough that allows a previously impractical market transaction to occur with zero effort.

The catch here is that in cities with regulated taxis, this kind of for-profit ride sharing would be seen as illegal competition.  That could change relatively easily, but a bigger change is required in the priorities of transport planning, which has bought too far into the death of cars narrative. 

Large cities such as Calgary, Edmonton and Toronto spend more on transit than they do on roads.  In the case of Calgary, transit accounts for nine per cent of daily trips taken versus cars at 77 per cent; it seems that the funding decisions are actually working against the peoples' revealed preferences.

Technologies such as Avego Driver show that the private car has much life left and great efficiencies to be gained.  Transport planners should stop looking to the private car as an undesirable and dying transport mode, and put private transport options like this one onto their horizon.

Imagine that you are finishing work and off to the cinema.  You take out your smart phone and select your destination.  Pictures of several people making a similar trip comes up on your screen; you scan their profiles and select one (with one touch) to meet you on the corner of the next block in four minutes.  Meanwhile your driver will pick you up and make money from a car seat that would otherwise have been empty and there will be one less vehicle on the road.  It seems just a crazy as eBay would have appeared twenty years ago, but the potential to unlock value is the same.  Let's hope that municipal transport policy can find a place for such innovations. ESR

David Seymour is a Senior Policy Analyst at the Frontier Centre.




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