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How Uber Is Serving Low-income New Yorkers

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How Uber Is Serving Low-income New Yorkers

September 3, 2015

This artilce originally appeared in NY Daily News.

While a temporary truce has been reached in the spat between Uber and New York City Mayor de Blasio, the debate over the city’s transportation future is far from over. As the city considers limiting the growth of for-hire vehicle fleets, it is focusing only on studying Uber’s effects on Manhattan traffic congestion — and ignoring the significant benefits the service provide outer-borough residents, who are chronically underserved by the existing taxi system.

As most New Yorkers know by now, Uber is expanding rapidly here: The city saw an impressive 450% growth in low-cost UberX rides over the course of last year. In a new report for the Manhattan Institute, I use Uber’s 2014 private ride data (no personal information on individual riders was disclosed) to determine the effects of the company’s increased presence on the city’s lower-income, outer-borough residents.

My analysis finds that Uber’s expansion has benefited low-income New Yorkers — those who live in the bottom half of New York City zip codes by median household income — the most.

The largest increase in UberX rides from January 2014 to December 2014 was seen in zip codes with below-median incomes. Seven of the 11 zip codes outside core Manhattan (below Central Park North) that saw their numbers of rides grow by over 1,000% have below-median incomes.

Over the course of 2014, the historically low-income neighborhoods of Jackson Heights, Astoria, Harlem and Washington Heights all saw increases in UberX trips of over 1,200% — that’s more than 12 fold.

This growth should be encouraged, not capped, as the existing taxi system, even with the creation of the borough taxi program, has consistently failed to meet the needs of many New Yorkers.

And despite the stereotype some have of Uber users as educated whites, use of the service did not vary along racial lines. In the 29 zip codes outside of core Manhattan with one or more UberX pick-up per household during 2014, black households made up an average of 29% of households, while the average for all zip codes outside of core Manhattan was 27%.

Among the top zip codes by rides per household, racial variations in the neighborhoods that primarily comprised them ranged from less than 5% black households in Greenpoint and Park Slope, to over 75% black households in Crown Heights and Harlem.

If a cap on Uber’s growth had been put in place in January 2014, there would have been over 200,000 fewer rides provided by the service for lower-income outer-borough residents in December 2014, as the ride totals in these months for below-median zip codes were 32,000 and 256,000, respectively. These expanded transportation options for outer boroughs should not be removed by city bureaucrats worried about Manhattan traffic.

As it turns out, de Blasio’s argument that Uber’s growth is the primary reason for increased Manhattan congestion is almost certainly an exaggeration. Yellow taxi trips still greatly outnumber UberX trips in New York City. In 2014, there were around 175 million annual yellow taxi trips, and just under 9.5 million UberX trips.

No doubt the gap has closed since then, but it most certainly still exists.

Additionally, compared to yellow taxis, UberX is far less Manhattan-focused. Only 6% of yellow-taxi pick-ups were outside Manhattan and city airports, compared with 22% for UberX.

As alternatives to yellow and green cabs grow, we should expect continued expanded access for low-income neighborhoods. Smartphones and credit cards are increasingly ubiquitous, as is with knowledge of ridesharing possibilities. These trends allow the customer base of Uber and its competitors to grow beyond the early adopters who tend to be higher-income and more technically savvy.

Mayor de Blasio and members of City Council should take note of these realities as they debate their next response to Uber’s growth.

 

Meyer is a fellow at the Manhattan Institute for Policy Research and the author of the new report “Uber-Positive: The Ride-Share Firm Expands Transportation Options in Low-Income New York.” Follow him on Twitter here

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