As a final reflection, it is important to remember that transport is considered an activity of general interest with a decisive impact on the well-being of citizens and the competitiveness of cities and countries. Such general interest has been one of the traditional reasons for public intervention in transport markets all around the world. Platforms and the transformations brought by platforms should and will not change this.
Platforms might bring substantial benefits in terms of efficiency, cost reduction, and improvement of door-to-door services. Users can be expected to benefit from such improvements in efficiency. However, such efficiencies will not exhaust the challenges posed by the general interest. Affordability and universality of transport services, for example, will continue to be issues.
New challenges will arise, some of which can already be identified. Consider the following simple example. Leonia is a borough just across the Hudson River from Manhattan. It is mostly a residential area, but more than 300,000 vehicles travel though it to connect with the George Washington Bridge to get in and out of Manhattan via Interstate Highway 95. In January 2018, local authorities decided to ban non-residents from using residential streets during rush hour.6 Traditionally quiet residential streets were being used as an alternative to the congested highway, particularly by Uber and Lyft vehicles directed to these streets by navigation devices. Platforms look for the fastest rides with the lowest costs. Their algorithms do not factor in general interest criteria, like respect for residential areas.
The increased efficiencies brought by ride-hailing platforms are actually increasing congestion in the densest urban areas of New York City, Boston, and San Francisco. Low prices attract more passengers and more passengers attract more vehicles. Algorithms do not consider the side effects of their ride-hailing platforms.
In a similar way, BlaBlaCar is detracting passengers from the environmentally more friendly railways, thus increasing the use of private cars for long-distance travel in France. The efficiency in the use of private cars brought by platforms has again increased congestion, damage to the environment, and risks for the safety of travelers, against longstanding public policies.
As platforms reinforce their role as system coordinators of the network of networks, more challenges will emerge. As platforms direct flows of traffic to one transport mode or another, they can reinforce or defy public policies that favor public transportation against private vehicles, environmentally friendly transport options against more polluting options, etc.
It has also been identified that the pressure of the platforms on transport service providers might affect the financing of transport infrastructure (including vehicles, but also roads, railway, etc.). Furthermore, platforms increase competition and reduce revenue for service providers. Commissions charged by platforms to service providers detract funds from the industry. Value erosion and revenue reduction are threats to the funding of the deployment and maintenance of transport infrastructure.7
It is still an open question how public authorities can enforce their policies under this new situation being created by platforms. Platforms are substituting service providers and regulators as coordinators and as managers of the transport system. New instruments have to be identified to ensure that platforms bring efficiencies while promoting the general interest. The general interest has to be included in the algorithm, and such inclusion must be supervised and/or regulated.
- 1 Osborne, H. (2016, Aug. 15). Deliveroo workers strike again over new pay structure, The Guardian, retrieved from www.theguardian.com/business/2016/aug/15/deliveroo-workers-strike-again-over-new-pay-structure
- 2 Krisher,T. (2017, Mar. 3). Uber drivers are growing angrier over price cuts, Business Insider, retrieved from www.businessinsider.com/uber-drivers-are-growing-angrier-over-price-cuts-2017-3
- 3 Goldman, E. (2010). The Regulation of Reputational Information. In The Next Digital Decade. Essays on the Future of the Internet, TechFreedom, Washington, p. 295.
- 4 Schwab, K. (2016). The Fourth Industrial Revolution. Penguin, New York
- 5 Montero, J. & Finger, M. (2021). The Modern Guide to the Digitalization of Infrastructures. Edward Elgar, Cheltenham.
- 6 Foderaro, L. (2018, Jan. 22). New Jersey town aims to keep app-guided outsiders off its streets, The New York Times, retrieved from www.nytimes.com/2018/01/22/nyregion/leonia-gps-navigation-apps.html
- 7 Finger, M., Bert, N., Kupfer, D., Montero, J. J., & Wolek, M. (2017). Infrastructure funding challenges in the sharing economy, Research for the TRAN Committee of the European Parliament, retrieved from www.europarl.europa.eu/RegData/etudes/STUD/2017/601970/ IPOL_STU(2017)601970_EN.pdf