Ride-hailing apps lead to US transport cuts but ride costs set to rise, argues magazine

Ride-hailing apps are being used as a reason to cut investment in public transport in the US but as the cost of an Uber or Lyft ride goes up, transport authorities will regret this, according to Slate Magazine.

Transportxtra has reported claims by commentators such as The Economist and smartphone app firm MaaS that 'mobility as a service' strategies that entail replacing public transport with a taxi ride for part of journeys will allow more and more people to give up car ownership. But Slate magazine now gives evidence of the Transport Catapult fear that 'mobility as a service' may lead to mode-shift from public transport to taxis.

"[Uber's] profit margin in the year ending September 2015 was a negative 143%... it lost $100m in the second quarter according to investors who spoke to Bloomberg. The company will have to start rising prices," the magazine argues, challenging the argument that allowed plans for $4.6bn investment in Detroit public transportation to be spiked because ride-hailing was "the future".

The journalist says that if transport authorities reduce services - pointing to the scrapping of the East Lake Connector bus in Tampa, and the reduction of Washington Metro services - "that tells people to buy cars" and says ride-hailing can never replace mass transportation.