Times are changing for Lyft and Uber. As reported in CNBC, investors losing confidence in both companies, and in cities across the United States, alternatives to ride sharing are popping up every day. In addition, there is a growing realization that more ride sharing options means more streets clogged with pollution-emitting cars.

In Chicago, for instance, Mayor Lori Lightfoot recently presented a 2020 budget that includes a hike in fees for the use of ride-sharing services during peak usage times.

She said, “Following our review of congestion data, we’ve determined an increase in our Ground Transportation Tax on downtown ride-share services on weekdays is warranted. This congestion tax would apply during the key hours between 6 a.m. and 10 p.m. when the central business district faces its highest levels of gridlock.”

Meanwhile, in New York, the city has enacted a new rule that limits the amount of time Lyft and Uber drivers can drive through Manhattan without passengers as they look for rides. The “cruising cap” is supposed to reduce congestion in an already crowded city. 

But the bigger challenge to Lyft and Uber is not municipal government: it’s the rise of micro-mobility. 

Ride Sharing Morphs into Micro-Mobility

What does that evolution mean? It means that especially in large cities, citizens, with the encouragement of municipal governments, are finding more ways to get around beyond ride hailing. Ride sharing is rapidly expanding to include more eco-friendly and convenient options such as bikes and scooters. Anyone who has been stuck in a clogged traffic in any major city can understand why. Grabbing an Uber for a short ride from the office to the commuter train in Chicago is a laughably bad idea during rush hour. But riding a bike via shared-service Divvy is not.

In 2018, the City of Chicago formed a task force to lay out a vision for supporting its diverse neighborhoods with mobility services. In March, the task force issued a reportAs I wrote earlier this year, the report stresses the importance of making micro-mobility services more accessible without jeopardizing shared spaces such as sidewalks. Independently, Mayor Lightfoot (then running for mayor) published a report that emphasizes improving rapid transit (including electrifying the city’s bus fleet) and reducing congestion caused by ride-sharing services. Her report demonstrates a commitment to making mobility accessible and affordable to as many citizens as possible, including residents of disadvantaged neighborhoods, where access to rapid transportation is essential. Her report is not just about making Chicago more efficient by providing as many transportation options as possible – she also demonstrates empathy for the underprivileged (especially through her emphasis on bus service) and the working-class citizens (such as taxicab drivers whose livelihoods are threatened by Lyft and Uber). 

The Advent of a New Mindset

The hand-writing is on the wall for Uber and Lyft in Chicago: ride-sharing services don’t call the shots. Chicago’s citizens and their government do. 

It’s unlikely both Uber and Lyft will go away. One of them might. But I doubt both will in Chicago. We may not have an insatiable appetite for ride sharing, but when it comes to choosing between a ride-sharing service and a taxicab, the people have already spoken: taxicabs are not sufficient. In addition, Lyft, perhaps sensing a change in the wind, has already invested in micro-mobility services.

I view the turmoil rocking Uber and Lyft as a sign of a larger, more encouraging transition going on: mobility services are helping businesses, governments, and citizens figure out how to bring about a more sustainable future.

As I blogged earlier this year, sustainability executives are examining how businesses might embrace a circular economy where people and companies reduce waste and decouple growth from the consumption of finite resources. In a circular economy, businesses produce fewer goods and services in favor of renting excess inventory from each other. Services such as Divvy make it easier for people to get from Point A to Point B by sharing bicycles instead of cars. Regardless of how you feel about Uber and Lyft, that’s a shift in mindsets we can all get behind. 

Mike Edmonds

Mike Edmonds

Managing Director, VP Product