Monday, December 17, 2018

Severin Borenstein on Uber and Lyft congestion

It really does seem like every other car you see in San Francisco these days is a Lyft or Uber (or both – multihoming!) on its way somewhere, or worse yet just cruising around waiting for an order. Adding to congestion on the streets? Taking riders away from more environmentally friendly alternatives? Severin Borenstein admits it may be so. So should we restrict these services? Nah. His solution is mine as well: Congestion pricing!

Many advantages come from pricing the congestion externality: Reduced congestion, of course, but also efficient allocation of the rides that do occur to their highest value, and revenue for the city that can reduce the burden of less efficient taxes or be spent on worthy projects, such as mass transit, services for the homeless, or cash transfers to low-income folks.

But here's a quiz question for you... What's the second-best solution if public officials can't or won't enact a sensible congestion pricing system? A question to ponder, Grasshopper, while you advocate for market-based solutions.

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