For a person of color, Uber’s appeal is simple: If you tap it, they will come. The ride-sharing service brought new mobility options to people in transportation deserts like Crenshaw in Los Angeles, Anacostia in D.C., and the South Side of Chicago, easing the stress of getting around a major metro area. But is Uber’s appeal in minority communities an “unintended consequence” or the natural byproduct of a savvy marketing strategy?
Davie Plouffe, a former Obama administration senior adviser and now a chief adviser for Uber, tackled this and other conundrums during a Thursday interview session at the National Association of Black Journalists/National Association of Hispanic Journalists conference in Washington.
During his conversation with Callie Crossley of WGBH Boston, Plouffe admitted, not surprisingly, that Uber’s founders did not sit down with grand plans to connect underserved neighborhoods to major city centers. But Uber and its competitor Lyft have emerged as essential alternatives to taxi services that often discriminate, especially against African Americans, by refusing to stop when hailed or by declining to travel to certain neighborhoods for pick-ups and drop-offs.
Underserved communities provide good business for Uber, which offers solo passenger rides and carpooling trips (which make up 35 percent to 40 percent of all trips). In New York, Uber provided 4.7 million rides in April 2016, a 121 percent increase over the previous year. About 40 percent of its New York rides go to the outer boroughs, Plouffe said. Meanwhile, the Washington, D.C., neighborhood of Anacostia has seen a 700 percent growth in Uber rides year over year. Uber serves nearly 200 cities in the United States.
About 50 percent of trips are one-way, Plouffe says, which indicates that riders rely on Uber as a gap filler and use the service in tandem with taxis and public transportation to get to work, school, or child care. Services like Uber also emerged as a vital last-mile connectors to areas beyond the terminus of a metropolitan area public transportation system and a link for communities that do not have any mass-transit options.
Plouffe’s said his move to Uber clued him into the disparities in transportation options facing minority and low-income neighborhoods. “I admit I didn’t realize as much when I was in government—I am ashamed by that—until I got into the private sector,” he said. “Why should it be that if you live in one part of the city it takes you 30 minutes to get a ride, and if you live in a wealthier area it takes three minutes?
Yet there still are discrepancies in who gets served. A Washington Post analysis found that Uber surge pricing (which kicks in when many people request a car at the same time, as during a weather event like a thunderstorm) sends more cars into wealthy, white, central Washington neighborhoods, where people have shorter wait times, and away from low-income, minority areas that end up with higher wait times.
While an app may not discriminate on where cars go, there are also concerns about Uber’s passenger and driver rating system (passengers can rate drivers and vice versa), which can allow bigotry to seep in. Moreover, the service has a very uneven record of serving people with disabilities. And of course owning a smartphone—not an insignificant investment—is a necessity.
Although Uber fills a niche, skepticism about the business model remains. Once Uber makes the transition from newish transportation disruptor to mature multinational, will Uber continue to offer reliable rides in minority, low-income, and far-flung American communities? The company recently surpassed two billion rides and now serves nearly 500 cities around the world. Plouffe argued that poor and minority areas are and will be a key market for Uber. “There is no doubt that our growth as a business,” he said, “is most acute in underserved areas, suburban areas, and lower-income areas.”
Nonetheless, accessing Uber presents obstacles for people in low-income communities who do not have credit cards, debit cards, or PayPal. Although Uber accepts cash from riders in some African and Asian nations where credit card use is not widespread, cash transactions aren’t coming to the United States anytime soon. Plouffe said that the company now has family accounts to be used by multiple people that one person can pay for, but he sidestepped the question of whether the company would give up its cashless American transaction system. “We have a lot of people coming to us with interesting ideas about that,” is all he would say. Right now, its business model does just enough to keep people in underserved communities tapping on their smartphones for a dependable ride.