Uber has introduced a levy to fund electric vehicles in London. But who exactly is benefiting?

Bleurgh. Image: Getty.

Uber is introducing a levy of 15p per mile on London users to help fund a transition to electric vehicles and help tackle air pollution. Its goal is to encourage half its drivers to go electric by 2021 and to go fully electric by 2025.

There are a number of benefits to the idea. Moving to cleaner transportation is an important public good with a myriad of general health benefits. It should be an urgent priority for all UK cities. But the question of who pays for this transition is fundamental to whether it is done fairly. As a process, change needs be done in partnership with people, not to them.

So who is actually being asked to foot the bill for this much needed transition? Fresh analysis by the New Economics Foundation shows that while the PR benefits are likely to accrue to Uber, its consumers and drivers will foot the bill in its entirety, while also taking on much of the risk.

Uber estimate that drivers will be eligible for £4,500 in funds to purchase a new electric vehicle after three years of service – the maximum period of time for which drivers can accrue credit. By comparison, the cost of a cheap second-hand electric car meeting Uber’s requirements for UberX costs in excess of £12,000, while a second hand vehicle suitable for UberLux would set drivers back around £45,000.

For those drivers receiving around £4,500, this would still imply the need to contribute thousands of pounds, if not tens of thousands, in personal funds. Even after allowing for a fall in prices for electric vehicles, drivers are being asked to make a minimum contribution of between 55 per cent and 85 per cent towards the total cost of electrification. The remainder of the cost will be met indirectly by consumers – either in the form of higher charges or else being priced out Uber’s services altogether.


Where drivers don’t have access to this sort of cash, the expectation will be that they borrow – which means taking on the risk of debt repayments while earning close to minimum wage. Being able to keep the 15p levy once driving an electric vehicle is unlikely to cover the cost of new interest payments. But failure to use the scheme at all could mean unemployment after 2025.

While drivers are forced into arrears to consolidate their jobs, Uber may also find itself with a considerable surplus from the scheme, as a result of drivers leaving the platform early or choosing not to apply for the grant. Uber has suggested that any surplus will be reinvested into supporting facilities, such as charge points for electric cars. But this means that the cost of moving to green infrastructure is coming at the expense of extra private debt for drivers (which could otherwise have been funded out of the levy). Such a trade-off is simply incompatible with a green transition that is morally just.

The shift in strategy from Uber towards more renewable transport technology is clearly welcome on environmental grounds. Doing so solely at the expense of consumers drivers is not. For any transition to be fair, Uber needs to meet its share of the costs.

Duncan McCann is a Researcher at the New Economics Foundation. He tweets @DuncanEMcCann. You can find NEF’s work on transport here.

 
 
 
 

What Citymapper’s business plan tells us about the future of Smart Cities

Some buses. Image: David Howard/Wikimedia Commons.

In late September, transport planning app Citymapper announced that it had accumulated £22m in losses, nearly doubling its total loss since the start of 2019. 

Like Uber and Lyft, Citymapper survives on investment funding rounds, hoping to stay around long enough to secure a monopoly. Since the start of 2019, the firm’s main tool for establishing that monopoly has been the “Citymapper Pass”, an attempt to undercut Transport for London’s Oyster Card. 

The Pass was teased early in the year and then rolled out in the spring, promising unlimited travel in zones 1-2 for £31 a week – cheaper than the TfL rate of £35.10. In effect, that means Citymapper itself is paying the difference for users to ride in zones 1-2. The firm is basically subsidising its customers’ travel on TfL in the hopes of getting people hooked on its app. 

So what's the company’s gameplan? After a painful, two-year long attempt at a joint minibus and taxi service – known variously as Smartbus, SmartRide, and Ride – Citymapper killed off its plans at a bus fleet in July. Instead of brick and mortar, it’s taken a gamble on their mobile mapping service with Pass. It operates as a subscription-based prepaid mobile wallet, which is used in the app (or as a contactless card) and operates as a financial service through MasterCard. Crucially, the service offers fully integrated, unlimited travel, which gives the company vital information about how people are actually moving and travelling in the city.

“What Citymapper is doing is offering a door-to-door view of commuter journeys,” says King’s College London lecturer Jonathan Reades, who researches smart cities and the Oyster card. 

TfL can only glean so much data from your taps in and out, a fact which has been frustrating for smart city researchers studying transit data, as well as companies trying to make use of that data. “Neither Uber nor TfL know what you do once you leave their system. But Citymapper does, because it’s not tied to any one system and – because of geolocation and your search – it knows your real origin and destination.” 

In other words, linking ticketing directly with a mapping service means the company can get data not only about where riders hop on and off the tube, but also how they're planning their route, whether they follow that plan, and what their final destination is. The app is paying to discount users’ fares in order to gain more data.

Door-to-door destinations gives a lot more detailed information about a rider’s profile as well: “Citymapper can see that you’re also looking at high-profile restaurant as destinations, live in an address on a swanky street in Hammersmith, and regularly travel to the City.” Citymapper can gain insights into what kind of people are travelling, where they hang out, and how they cluster in transit systems. 

And on top of finding out data about how users move in a city, Citymapper is also gaining financial data about users through ticketing, which reflects a wider trend of tech companies entering into the financial services market – like Apple’s recent foray into the credit card business with Apple Card. Citymapper is willing to take a massive hit because the data related to how people actually travel, and how they spend their money, can do a lot more for them than help the company run a minibus service: by financialising its mapping service, it’s getting actual ticketing data that Google Maps doesn’t have, while simultaneously helping to build a routing platform that users never really have to leave


The integrated transit app, complete with ticket data, lets Citymapper get a sense of flows and transit corridors. As the Guardian points out, this gives Citymapper a lot of leverage to negotiate with smaller transit providers – scooter services, for example – who want to partner with it down the line. 

“You can start to look at ‘up-sell’ and ‘cross-sell’ opportunities,” explain Reades. “If they see that a particular journey or modal mix is attractive then they are in a position to act on that with their various mobility offerings or to sell that knowledge to others. 

“They might sell locational insights to retailers or network operators,” he goes on. “If you put a scooter bay here then we think that will be well-used since our data indicates X; or if you put a store here then you’ll be capturing more of that desirable scooter demographic.” With the rise of electric rideables, Citymapper can position itself as a platform operator that holds the key to user data – acting a lot like TfL, but for startup scooter companies and car-sharing companies.

The app’s origins tell us a lot about the direction of its monetisation strategy. Originally conceived as “Busmapper”, the app used publicly available transit data as the base for its own datasets, privileging transit data over Google Maps’ focus on walking and driving.  From there it was able to hone in on user data and extract that information to build a more efficient picture of the transit system. By collecting more data, it has better grounds for selling that for urban planning purposes, whether to government or elsewhere.

This kind of data-centred planning is what makes smart cities possible. It’s only become appealing to civic governments, Reades explains, since civic government has become more constrained by funding. “The reason its gaining traction with policy-makers is because the constraints of austerity mean that they’re trying to do more with less. They use data to measure more efficient services.”  

The question now is whether Citymapper’s plan to lure riders away from the Oyster card will be successful in the long term. Consolidated routing and ticketing data is likely only the first step. It may be too early to tell how it will affect public agencies like TfL – but right now Citymapper is establishing itself as a ticketing service - gaining valuable urban data, financialising its app, and running up those losses in the process.

When approached for comment, Citymapper claimed that Pass is not losing money but that it is a “growth startup which is developing its revenue streams”. The company stated that they have never sold data, but “regularly engage with transport authorities around the world to help improve open data and their systems”

Josh Gabert-Doyon tweets as @JoshGD.