Ridesourcing: letting vehicles with drivers for short time

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Ridesourcing: letting vehicles with drivers for short time

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Ridesourcing platforms dynamically match supply and demand by allowing travellers to request car rides in real-time from potential suppliers using a smartphone application. In contrast to carpooling (or ridesharing), ridesourcing drivers operate for-profit and usually provide rides on request and not by chance on their own trips, acting very similarly to taxi drivers’ professional activity (Raylea L., et. al., 2016).

The ridesourcing company can leverage smartphones’ GPS to detect the location of users connecting them with the nearest available driver(s), even if the exact address is not known. The companies usually contract with drivers under legal arrangements as contractors and not as employees benefiting from not having to respect the strict taxis’ regulation on taxation, work hours, overtime, etc.

This business concept raises many concerns related to the protection of personal data, the overriding of existing regulations for conventional taxi industry, the working condition of the “independent” drivers that cooperate as contractors of the ridesourcing companies and the safety and security standards that users enjoy.

New services based on alternative and smart combination of the existing sources and new technological products will form the future reality of urban transport, changing rapidly the modal split. Various factors will favour the ridesourcing expansion, such as, among others: the existing size of car market (namely the car ownership rate); cultural aspects, (e.g. increased trust among citizens, socialization, etc.) related to the usage of non-familiar people’s vehicles; the spatial type of city development, for example the less dense cities in USA, the advancements in the security protection systems; the market penetration of smartphones and ICT; the introduction of relevant regulatory framework, etc. The business concept of ridesourcing will be gradually more and more transferable and will spread all over the developed world. Indicatively, Uber, the biggest among the car-hailing apps (such as Lyft, Sidecar and Wingz), is operating in more than 55 countries and more than 300 cities worldwide (Uber, 2016).

The trend of several companies that are copying the business model of Uber, the pioneering ridesourcing company, is referred as “Uberification”.

A business and governance model innovation enabling the short-term letting of vehicles with drivers (e.g. Uber).

A ridesourcing platform or transportation network company connects potential passengers with drivers who provide the travel on their own non-commercial vehicles and for profit. All parties can connect to the service via website and mobile apps (Lyft, Uber, etc.). This business concept raises many concerns related to the protection of individual’s data, the overriding of regulations for conventional taxi industry, the working conditions of the drivers, and the safety and security standards. Ridesourcing could replace some private automobile use, but since it can also induce travel, the impacts on overall kilometres travelled are uncertain. At the same time, ridesourcing sometimes attracts passengers, especially non-car owners, from public transport. It is estimated that the business concept of ridesourcing will be gradually more and more transferable and will be spread all over the developed world.

This emerging mobility scheme can be also seen as a potential supplementary mean of transport for low demand areas and time periods, where and when there is not any Public Transport service provided. In this sense, it can feed the backbone of the transport system, namely the Public Transport, or it can substitute it whenever it is needed. Of course, this kind of services may also act competitively against the Public Transport by attracting some passengers from it.

  • Finance and business models
  • Integration with other services
  • Service models, organization and management

General concept
  • Large urban area
  • Metropolitan areas

Integrated network
  • Attracting more customers
  • Goal-oriented/efficient organization

  • Adaptiveness to evolving markets and customer needs
  • Better experience
  • Improve accessibility
  • Improve comfort
  • Improving customer orientation

  • Flexible economy
  • Innovative technologies
  • Shared economy
  • Transforming household
  • Urban sprawl

The shared economy companies in the transport sector pose multiple challenges to governments that have to deal with issues related to employment, internal market regulations, environment, taxation, consumer protection, etc. (Azevedo F., Maciejewski M., 2015). In particular, the commercial success and massive uptake of services such as Uber trigger a number of questions for regulators both in the USA and in the European Union, the most important among which is whether the regulatory responses to these services take into account the concerns over proper regulation of transport services and consumer safety or constitute a protection of traditional incumbent transport operators (Azevedo F., Maciejewski M., 2015).

The innovation of ridesourcing (such as Uber) has been widely disputed, criticized or supported. The reactions in every country, where such innovative services were introduced are various, either supporting or not. For example, UberX is operating in over 150 cities around the world, among which, in fourteen markets, including California, Colorado, Washington D.C., Seattle, Minneapolis and Houston, governments have successfully implemented ridesharing legislation (Uber, 2014).

There is definitely need for the analysis of mobility, labour and environmental impacts of shared economy transport services and further research in terms of national provisions and regulatory responses (e.g. in California and Colorado a distinct set of rules applying to TNCs was created) (Azevedo F., Maciejewski M., 2015).

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