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Ridesharing. The Time is Right.


19 Aug Ridesharing. The Time is Right.

“Sorry; there are no taxis available. Please try again in five to ten minutes’ time.”
Thus responds the operator to many a disheartened Singaporean during their daily commute. The alternative? To traverse by way of public transport’s tight confines on a multiple-legged journey, at the expense of precious time, and most likely, a seat. Perhaps the only redeeming feature of our Singaporean gridlock is that it is Singaporean, involving distances only aslong as our island, at the very worst. And yet, with Singapore’s fast-rising population, the future looks to hold more of the same. Indeed, even with the government’s price-discriminating measures involving increased rush hour ERP pricing and decreased pre-rush hour MRT fares, gridlock remains the order of the morning and the evening for many, due to there being a persistent price-inelasticity of demand for transport during these times of day. And whilst Singapore has yet to be burdened with commuter-pandemonium on the scale of Tokyo’s Shinjuku Station, which accommodates a daily flow of over four million passengers, the productivity losses of the entirety of our commuting labour force, if accrued over the years, would amount to a staggering sum.

In economic terms though, our infrastructural dilemma may be reduced to a simple misallocation of resources. During the morning and evening commutes, roads and public transportation effectively cease to be public goods, because they can no longer be said to be non-rivalrous, meaning that consumption by one user during rush hour oftenmeans negating the opportunity for consumption by another user, whilst during other times of the day the same would not be true. As such, demand for transport during rush hour exceeds supply at the moment, but only because weare drawing on too narrow a supply. Specifically, the misallocated and most overlooked resources at our disposal are right under our noses, or rather, further behind our steering wheels; the unused seats in our cars.

Ridesharing might remedy our current situation of twice-daily gridlock far more easily than you might think. If implemented on a wide enough scale, traffic congestion, parking scarcity and fuel consumption may be reduced, to state the obvious. Theoretically, it should be easy for us to tap into the existing misallocated supply of transport; consider that in this market, supply and demand rise simultaneously, that is, during the commute. As the number of exasperated taxi-callers and jaded public transport-users dramatically increases during rush hour, so too does the number of drivers, whose road usage is in fact part and parcel of the congestion. It follows that, during the congested commute, the solution (to cutting travel times and matching demand to supply) in fact lies in our shrewd exploitation of the problem itself.

With such a self-contained dilemma, the likes of SMRT and Citicab need not trouble themselves over the possible diminishing of their markets, since the supply of rideshare drivers dissipates with outside of the commute, during which taxi services are thinly-stretched in any case. With well over half a million cars, but merely 28000 taxis in Singapore, ridesharing during the commute might well be a win-win for both Singapore’s commuters and transport services.

Such a service also stands to bridge the price gap between taxi services and public transport. The only means of recruiting a substantial pool of drivers, who are envisaged to themselves becommuting professionals, would be to offer a monetary incentive. Yet, we must consider that there would be next to no opportunity cost for the driver, who need only accept jobs at his whim, which would likely be of minimal inconvenience to his usual journey. Journeys might also be charged exclusively according to distance, since the any precious minutes lost to gridlock are economic losses to both parties involved; both the driver and his passenger. The passenger therefore affords himself a new degree of price-certainty about his daily commute, with travel times being no less capricious than would be the case with any alternative modes of transport. Hence do we potentially have a service which might sensibly be priced midway between taxi fares, for all their booking fees and ERP surcharges, and public transport, for all its sluggishness and cramped confines.

However, beyond the tangible costs and benefits of convenience and payment, there lies the potential for professional gains to be made by both driver and passenger, which stands to exceed any inconvenience of time or price. Due to ridesharing involving a shared destination for both parties, be it the CBD or regional business parks, there exists the opportunity for professional networking to occur, to cross-fertilise the occupational interests of both driver and passenger. Consider the case of the car-owning insurance agent; his occupation is to travel the highways and by ways of Singapore in order to sell coverage to customers. As a driver under a ridesharing scheme, he is able to multitask; to start work before he even arrives at work by soliciting his passengers. A similar usefulness might be had by all mannerof professionals; by bankers, lawyers, accountants, or indeed anyone whose job requires interaction with other professions. A passenger might as such be ableto easily recoup his small payment through the usefulness of conversation had. Likewise would a driver be able to justify his time spent as part of ridesharing if his passenger yielded opportunities over and above the simple rideshare transaction.

In the past, there have existed three main obstacles to ridesharing’s popularity, all of which should be negligible in the present day. Firstly, passengers’ concern for their safety when riding with strangers, or indeed, drivers’ uncertainty of the actions of their passengers may be negated by identification and regulation. All drivers registered with such a scheme should be confirmed as license-holders and owners of the car they drive, whilst it should be necessary for both driver and passenger to provide some form of identification and/or collateral, perhaps inthe form of credit card details, before the ridesharing service is conducted, to reduce any distrust on both sides of the transaction.

Secondly, the scheme is doomed to fail without a sufficient critical mass of participants on both sides, with drivers being necessary first. In this era where our tools of prolific advertising and social media are able to spread word like wildfire, aided especially by the open minds and tech-savvy of generation Y, asymmetric market information is fast becoming a thing of the past. In other words, since many will know, many people will join. What’s more is that ridesharing is an industry involving effectively zero barriers to entry; all that would be required as a driver is a car and some paperwork. In turn, all that would be required as a passenger is some cash and a smartphone with a ridesharing app.

Finally, convenience has proven the most intractable barrier to ridesharing’s widespread adoption. Yet, as aforementioned, through smartphone apps using origin-destination algorithms to closely match passenger to driver, rideshares may be requested at the shortest notice, no longer requiring tedious and inflexible pre-arrangements to have been made between the two parties in person. Twice daily, Singapore becomes a diseased state. Its arteries of infrastructure become clogged with inefficient machines; some mostly-empty, others so full as to nearly burst. The cure? Ridesharing because the time is right.

Mark Huang
Mark is currently serving NS and will be reading English at Oxford University.

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