Benefits of Ride-Sharing Not Realized in All Cities

While in Vegas last week for CES, I made a point of taking Uber everywhere and talking to my drivers about their experiences.  Ride-sharing has been touted by providers and urban planners alike as a way to reduce the number of cars on the road, but it turns out that not all economies are created equal.  Here is what I learned.

In 2015 alone, 42.3 million tourists traveled to Las Vegas, accounting for 9.1% of all foreign tourists visiting the united states.  That’s an average of 116,000 tourists a day who fill the strips 62,000 hotel rooms, none of whom bring (or rent) a car.  The strip itself is only 4.2 miles long and no more than a mile across in either direction.  That may tourists in an 8.4 square mile area is a higher population density than Chicago.  And that’s just the tourists!  On an average day!  On top of that, there are 368,900 people working in tourism, mostly on the strip.

All of those tourists are being driven around by any one of the 42,000 cab drivers in the city.  That doesn’t include the buses and airport shuttle services.  According to one of my drivers, nearly 20,000 more cars were added when Uber and Lyft entered the city in September of 2015.  Did the cab industry respond by reducing their numbers in response to lost income?  Another driver directed my attention to the cab in front of us.  That sign on top of the car that lights up and advertises any one of the hundreds of shows and events in the city?  They get $50 a day to advertise on top of each car.  The cab company he used to work for added 400 cars in response to ride-sharing to make up for the lost revenue.  With just the advertising revenue, a company could pay off a $30,000 car in less than 2 years.

So, ride-sharing did not reduce traffic congestion in the most traveled parts of Las Vegas.  Instead, it increased it by nearly 50%.

Also, nobody likes driving for Uber.  There are a handful of peak travel times with surge pricing during the day.  The rest of the time, all those Uber drivers are competing with all those taxi drivers.  With as small as the area is, that means that Uber drivers are up against hundreds of other available drivers at any given time competing for the minimum fare, of which they get to keep $3.75.  My one drivers said he has to get three rides an hour to make minimum wage and that one in three of those goes entirely to gas.   Why don’t they drive for Lyft?  Not enough passengers.  I feel bad.  Why don’t I ride with Lyft?  Not enough drivers.  Lyft, to its credit, was aggressively recruiting users at CES with $50 credits.

Anything else?  Yep!

During peak hours, wait time was horrible.  I was at the Palazzo convention center when one the keynote addresses ended and over 5,000 people walked out of the hotel at the same time.  I spent 40 minutes waiting for an Uber.  The sudden rush of ride-shares and taxis all during normal rush hour created pure gridlock.  My ride was less than a half mile away the entire time.

Flaws in the navigation app were apparent at the designated drop-off point at CES.  I asked to be let off over a block away more than once because the congestion was so bad.  My drivers who had grown up in Vegas or had driven a taxi before ignored the recommended route and drove away from the strip to drop me off in the back where there was next to no congestion.

Lessons learned?  Ride-sharing won’t necessarily reduce congestion in areas dominated by tourism.  The navigation app that Uber uses does not always avoid congestion.  Oh, drivers and passengers alike seemed to not like using Uber while at CES.

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