Inching Along...

By Hart Schwartz | January 2016

Sitting in traffic in a pay-by-the-minute Car2Go, I found myself frustrated and yelling, "It's unbelievable that people actually live like this!" First, because I knowingly got into the situation I was in, and second because, well, I was frustrated by the standstill.

It was 5:30 pm on a weekday, and I had to commute across Austin during an obviously high traffic time of day. A ride that normally takes 22 minutes ended up taking more than hour. The congestion part is easy to explain: Austin's population has grown significantly in recent years, and it's one of the fastest-growing metropolitan areas in the United States. The influx of more people and vehicles has resulted in massive traffic headaches, as well as an increase in my own headaches.

The implication for the urban mobility services is this: If you are riding in a Car2Go, or any other shared service, being stuck in rush-hour traffic when you're paying by the minute is an inefficient use of both time and money.

Some observers claim that widespread car-sharing or ride-sharing services could reduce vehicles on the road and substantially reduce congestion. But the flipside is perhaps that shared vehicles would only incrementally add to the current traffic gridlock and bring riders onto the road who previously used other means, such as public transportation. The final ownerless scenario sounds appealing, but the steps needed to get there only make the current problems worse in the meantime.

Whether it's car-sharing or ride-sharing, traffic congestion undermines the appeal of these services, particularly in more suburban areas. We know that these types of services thrive in densely populated cities, and that congestion places a built-in limit to the ultimate market size, at least in the short term. Traffic patterns weren't created overnight and the problem will take some time to solve.

Read more from the January Issue of our Fuel for Thought newsletter.

Hart Schwartz is the Research Consultant of Clarify Consulting Research. He can be reached at hschwartz@clarifyconsulting.com.