New York Offers Israel Little Hope for a Ridesharing Future

Figures for 2019 show that a yellow cab carried more passengers on average than Via’s app-based fleet

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A vehicle belonging to U.S.-Israeli company Via’s fleet.
A vehicle belonging to U.S.-Israeli company Via’s fleet. Credit: Mark Mcqueen / Via
Meirav Moran
Meirav Moran

Israel is engaged in a large-scale experiment costing tens of millions of shekels to examine the value of shared transportation by the U.S.-Israeli company Via. But in New York, data show that Via’s service does not compare favorably with the more conventional alternative of yellow taxis.

The figures, which were compiled by the New York Taxi and Limousine Commission and obtained by TheMarker, show that Via’s New York service is no more efficient than a yellow cab. On an average weekday in 2019, it carried only one more passenger (24) than a yellow cab (23). In some months – June, September and December – yellow cabs carried one more passenger per day on average than Via vehicles, 22 versus 21.

In Israel, Via’s Bubble Dan subsidiary has been operating an experimental program due to wind up June 20. The aim of the program is to find out whether the shared transportation model is more effective than taxis and other public transportation options, but the results have been kept under wraps.

Via’s fleet of vehicles, which are dispatched and routed to meet changing demand, theoretically should be carrying more riders over the course of the day and should be easing traffic pressure, but the New York data don’t bear that out that conjecture.

In fact, the Taxi and Limousine Commission data understate the relative efficiency of taxis compared to shared transportation. New York sets a benchmark for taxis of one rider at any given time for rides to be counted in its data. However, Via cars are assumed to be carrying their optimal number of four riders. Thus, it’s enough that once or twice a day a taxi picks up two passengers at once and as a result Via’s average falls by 10% in comparison with the taxis.

Only two thirds of the rides Via provides are shared. In other words, when one passenger is dropped off, another one doesn’t immediately come in place of the departed passenger. As a result, Via is often carrying less than the optimal number of passengers. If Via is carrying on average 3.2 passengers in a shared ride, that means on an average week day that it is carrying about half the number of passengers as a yellow cab. If such is the case, the business model can’t generate enough income to make it financially viable, certainly not in the case when it is based on minibuses as the Bubble Dan pilot in Tel Aviv does.

Shared transportation of all kinds has been growing quickly. The number of trips taken in taxis, black cabs and various kinds of shared transportation in New York doubled over the past five years to nearly one million a day at the start of 2020.

During that time, taxis ceded most of the market share to apps-based transportation options, led by Uber and Lyft and, to much lesser extent, Via. They accounted for 60,000 rides a day out of 500,000 in 2014, but by 2020 they made up 700,000 of nearly one million.

However, Via hasn’t kept pace with the growth. In the first years, it accounted for 5% to 6% of the city’s apps-based transportation market and at its peak in the summer of 2017 reached a 7% share. Since then, its share has declined to 3% by the end of last year.

Via has seen the number of app-based reservations drop from 38,000 daily at its peak to less than 23,000 in January. Meantime, Via’s fleet has also shrunk from a peak of about 7,000 vehicles to about 4,000 at the start of this year.

That drop was in response to a directive by the city in February 2019 requiring shared-transportation drivers to be earning the minimum wage. All the apps-based providers therefore cut back their fleets to ensure there was enough demand for the remaining drivers to earn the minimum.

Uber and Lyft reduced their fleets each by 14% within the year. For Uber, that increased its average passenger count by 12%; for Lyft, the increase was 34%. Via shrunk its fleet by a much sharper 42% but its passenger count average fell slightly in 2019.

New York is the perfect environment to test the Via “smart bus” model. Even by the standards of an urban area, it’s densely populated and its residents are accustomed to using public transportation. Relatively few New Yorkers have private cars while personal transportation, such as electric scooters, is banned by law. Manhattan streets are designed in a grid that makes it easy to operate shared-transportation routes.

Yet even in this ideal setting, Via is losing money. Operating costs for its vehicles, including driver pay, is $250 a day, which means that even under optimal conditions the company is losing $100 a day per vehicle.

More recently, Via has been working with smaller cities to provide public transportation services with municipal subsidies. In Arlington, Texas, for example, the company operates about 20 mini-buses with subsidies. In Sacramento, California, Via announced earlier this year it had raised $12 million from a public fund to start a similar service.

On the other hand, a much bigger project in the German capital of Berlin with Via was shut down this year after an 18-month trial involving 130 mini-buses. The city concluded that the service was too expensive and inefficient.

In Israel, the Bubble Dan trial uses mini-buses that pick up passengers from bus stops after they have ordered a ride by app. The vehicles’ routes aren’t fixed but based on where passengers need to be picked and dropped off.

It uses 100 vehicles and employs more than 100 drivers, but unlike New York and other cities, Israel has not revealed much information on how much the service is being used, despite repeated requests by TheMarker.

Via declined to comment on this report.

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