D.C.’s ride-hailing market has exploded over the past three years, more than quadrupling since late 2015 as Metro and taxi ridership have steadily fallen, statistics show, a sign that Uber and Lyft are probably creating thousands of new vehicle trips in the city, officials and analysts say.
Metro hired a consultant last year to build ridership models that take into account the impact of ride-hailing services as part of the agency’s effort to determine the sources of its ridership decline; average weekday ridership is down about 135,000 riders from peaks a decade ago.
Revenue the city collects from a ride surcharge shows how quickly the ride-hailing services have taken off. The app-based services are generating as much tax revenue for the city — about $4.5 million a year — as taxis did in 2015 with a 25-cents-per-ride surcharge. The 1 percent ride-hailing fee generated about $875,570 in 2015. It’s impossible to know how many rides the dollar amounts represent, but they do show sustained growth for the ride-hail services.
“We are talking about a tale of two cities,” said Ernest Chrappah, director of the D.C. Department of For-Hire Vehicles, which regulates taxis and ride-hailing services. “The bulk of the [taxi] trips is no longer there . . . . Most of the time, you push your Uber app or your Lyft app or your Via app.”
The figures at least partly explain why Bowser is turning to the ride-hailing industry to raise money to fund Metro.
Bowser has proposed increasing the tax on gross receipts on “for-hire” vehicle services, passed on to customers as city fees on trips, from 1 percent to 4.75 percent. For the customer, it would mean that a dime charge on a $10 trip would become a 47-cent charge.
The money raised from the tax would cover about 10 percent of the $178.5 million in annual funding the city has pledged for its share of the $500 million a year in dedicated funding for Metro.
Saesha Carlile, deputy budget director in the city administrator’s office, said the District’s revenue projections are purely mathematical — the city does not have specific data on how much business ride-hailing companies are doing on city streets.
“We know what the tax was, we knew where the revenues were, that was the starting point,” Carlile said. “I think we were interested in . . . from a policy perspective, making sure we had a dedicated, sustainable and fair way of funding Metro.”
City budget documents show that the District is expected to raise about $17.3 million from the ride-hailing tax in the next fiscal year, with the amount gradually rising to $19 million by 2022.
And while Chrappah and Carlile say the District does not have data on how many trips ride-hailing services are providing, analysts say the information provides some insight into the extent of their operations.
Researchers and others also worry about the impact that all the extra Uber and Lyft vehicles could have on city traffic, as mounting evidence shows that ride hailing increases congestion. One recent study from a Boston-area planning agency found that 15 percent of ride-hailing trips “are adding cars to the region’s roadways during the morning or afternoon rush hours.”
“While the services are justifiably popular, their growing use may result in negative outcomes for traffic congestion, transit use, and active transportation,” said the study from the Boston region’s Metropolitan Area Planning Council.
That research mirrored data compiled from studies in multiple cities that show that 15 to 30 percent of ride-hailing customers would have otherwise taken mass transit if they weren’t using Uber or Lyft.
The actual average cost of an Uber or Lyft in the District is unknown; the companies declined to provide the data. But the figure is a critical piece of information in trying to determine how many rides the services are delivering daily.
At 10 cents for a $10 trip, for example, the $4.5 million in surcharge revenue would reflect that ride-hailing companies are delivering about 45 million annual trips in the city.
Bruce Schaller, former deputy commissioner for traffic and planning in New York, said 45 million trips would square with expectations for a city the size of Washington, with the number of accessible jobs and restaurants in the region. Schaller, who led a study titled “Unsustainable” on the growth of ride-hailing services, plugged it into a model that showed a comparable ratio of trips to demand-driving factors such as jobs and restaurants in New York and San Francisco, too.
The average trip in New York is about $18, he said, but Uber and Lyft have incentivized ride hailing through steep discounts on their ride-splitting services, so the District would be expected to be cheaper — in the $10 to $12 range.
At $10 a trip, Uber and Lyft would average about 123,000 trips per day here, about 6 percent of the 2 million daily motor vehicle trips that occur within the District, according to the Metropolitan Washington Council of Governments, though the figures are an inexact comparison. That’s about 28 percent fewer than the number taken in San Francisco, the ride-hailing mecca that is also about 22 percent larger than the District, population-wise.
Schaller’s model puts the District squarely between New York and San Francisco in terms of reliance on ride-hailing services. Taxis are still the dominant mode of vehicle-for-hire transportation in Manhattan, his data showed, where ride hailing makes up about 38 percent of the market. The District comes in at more than double the share of Uber and Lyft trips — 79 percent — based on the ride-hailing revenue, while San Francisco is most reliant on the services at 92 percent.
Whether the actual number of trips is 40 million or 50 million, or something else, however, Schaller said the revenue figures illustrate an obvious reality.
“You just see this rocket lift off,” Schaller said of the ride-hailing market.
And because the rate of growth outpaces the losses on the taxi side, he said, many of the new rides represent trips that are either cannibalizing transit ridership or would not have previously been taken at all, a probable concern for transit planners.
Uber has shared limited data with the District Department of Transportation through Uber Movement, an information-sharing platform that showcases insights such as vehicle travel time and demand. At a joint event with Bowser in Northeast Washington this month, the company also announced a unique data-sharing program through SharedStreets, a collaboration between the National Association of City Transportation Officials and the Open Transport Partnership. Under the pilot, which is beginning in Washington, Uber will share its data on curb use to help cities deal with congestion and sustainability goals.
“Better understanding curb utilization can help cities around the world prepare for a future where more and more of us are accessing transportation through a combination of shared modes, rather than relying on our own vehicles,” the company said in a blog post. District officials welcomed the pilot, which includes DDOT and the department of for-hire vehicles.
But, Chrappah said, there is more data to be gleaned from Uber and Lyft. Asked how many trips the ride-hailing companies his department regulates are responsible for on D.C. streets, he said: “Nobody knows the truth, except the person who has the information,” he said. “The disclosure [of average fares] for public interest is necessary.”