Podcast
Podcast
- 04 Nov 2019
- Climate Rising
Getting Around: Shaping the Future of Transportation
Adam Gromis: Roads today, laws today, regulations today all assume we will all forever own a car and drive it ourselves, generally drive it alone.
David Abel: I'm David Abel, and this is Climate Rising, a podcast from Harvard Business School that looks at the challenges and opportunities that climate change presents for businesses. Today, we'll be looking at the impact of transportation on climate change. In the United States, emissions from cars, trucks, airplanes, and other transportation account for nearly a third of the nation's emissions, more than any other source. The solutions will require us to change how often we drive cars and the types of fuels we use. They'll require investments in public transportation and, ultimately, autonomous vehicles. They will also likely include more carpooling and ride-hailing services, which could ultimately combine a lot of the potential solutions. Some companies have started making significant efforts to bring about this new world. Uber, now a global behemoth, has more than 110 million users of its service in about 800 metropolitan areas around the world. The company has touted its ride-hailing services as a way to reduce traffic and emissions, but some research has found the opposite has occurred. Do more ride-hailing services mean fewer people using public transportation, biking or walking, or does it mean fewer people buying cars and more people sharing rides using options such as UberPool? How long will it be before their vision of a new transportation system becomes reality, one in which robots ferry us around in zero-emissions cars? Joining us to discuss how ride-hailing services are affecting the climate are Adam Gromis, Public Policy Manager for Sustainability and Environmental Impact at Uber, and Ashley Whillans, an assistant professor at Harvard Business School. Adam Gromis, What does it mean to oversee sustainability at Uber? What do you do exactly, and what are some of the main ways Uber seeks to reduce its climate footprint?
Adam Gromis: The question I'm trying to answer is the one that you posed earlier: Is Uber good for the environment? It's as simple as that. Fortunately enough for me, getting to the answer is more complicated and nuanced enough for them to employ me to try and figure it out. Since we're at HBS today, I decided to break down my work into the five Ms, what I call the five Ms, classic business school framework. First, measurement. Second, materiality. Third, magnification. Fourth, messaging, and fifth, management. What do I mean by that? First, we got to measure-
David Abel: How many miles driven, that kind of thing?
Adam Gromis: Miles driven, even coming up with a carbon footprint calculation. Second, materiality. Which one of those things matter most to environmental stakeholders and which matter most to the business? Third, of the things that are most material, how do we magnify the ones that are net positive, net contributors, and what do we do to mitigate or minimize the ones that are net negatives? Fourth, messaging. First, to the corporation itself, what are the key metrics to monitor and manage to?
David Abel: Meaning persuading your bosses that this is something that they should continue employing you.
Adam Gromis: Right. It falls right into the fifth one, which is management. Ultimately, what you'd hope for, over the long run, is that you would manage to the key metrics and incentivize the organization to pursue optimal outcomes for those key metrics so long as they are in line with what shareholders expect and what's good for the business.
David Abel: Ashley Whillans, you study how people make trade-offs between time and money and the efficacy of incentives to change behavior. What does your research suggest would be the best incentives ride-hailing companies should provide to get more people to use their carpooling services to reduce the number of cars on the road?
Ashley Whillans: I will level set expectations here by saying that I think I know more about what doesn't work than what works to shift people's behavior in terms of getting them to use these ride-sharing platforms and to commute to work together. I'm a behavioral scientist, and I'm really interested in understanding how can we encourage people to engage in behaviors that are good for their own health and happiness and also have some positive externality for society? Giving to charity is an example of a topic that I've studied but also how to get people to engage in pro-environmental behaviors, and so this is how I became interested in this topic. We know that being stuck in traffic behind the wheel is one of the worst ways to spend one's time. It's the most negative for stress, has been linked to higher incident rates of cardiovascular disease, and it's one of the worst activities for happiness. Really, I come at this from this question of, well, carpooling and ride-sharing, that seems great, solves all kinds of problems. I really became interested in this question because I want to help people help themselves and then help the environment in the process. Trying out some of these small, simple interventions to get people out of driving alone and maybe taking these ride-share platforms or carpooling together is sort of what my student Ariella Kristal and I went about trying to do. We ran a series of seven field experiments with 70,000 employees at a large airport. It was well-connected to transit. There was already a car-pooling service in place. I think maybe the downfall here is that they also had parking that was free. We tried every behavioral science tool in the book. We made personalized ride plans, "This is how you could commute using transit. This is how you could commute using carpool. Here's three perfect matches for you if you want to ride to work with someone that you haven't met before." We even provided free transit passes for a week. Across seven field experiments with 70,000 employees, we were able to produce no meaningful impact. They were still driving alone after we tried all of these things. I can tell you that some of these small behavioral interventions that have worked in so many policy areas, like retirement savings and tax compliance, do not seem to be a profitable pathways, at least in the context that we studied for changing people's commuting behaviors.
David Abel: Well, that's uplifting.
Ashley Whillans: Good way to start the conversation.
David Abel: Adam Gromis, some research has found that ride-hailing services have actually led to more traffic and less transit use in major American cities. A professor I was just talking to was telling me how his students who always used to walk now often take Uber. Do you have any evidence that Uber or Lyft reduce the number of cars on the road? Is that a goal of your company, and how is UberPool doing compared to, say, UberX?
Adam Gromis: It's a big question in there, David. Well, partly, it gets back to what Professor Whillans was talking about with the challenge of addressing the incumbency of the personal car. It's just a wonderful way to get around, and it has been for more than 100 years. We're really new to providing transportation technology to the transportation sector. In that regard, we've learned a little from experience, and we learned a lot more from looking at the history of transportation, particularly as it's unfolded in both developed and less-developed markets. Let me just give you a for instance. In the United States, the best government data from the last two years or so puts the combined usage of taxi, limo services, ride hailing, car sharing all together at something around a half a percent of all passenger miles traveled, all the miles that all of us do. Public transit, buses, trains, light rail, things like that, is around 3%.
David Abel: How do those figures translate into urban areas? Because, of course, we have vast stretches of areas where Uber and Lyft don't operate. We're a big country but, in metropolitan areas, these services are ubiquitous, and I imagine they're much higher than a half a percent.
Adam Gromis: Right. Well, and they are. They're three times higher. They're 1.5% or so, 1.7 is according to the same government data from the last two years. If you zoom into major urban and even highly urbanized areas of less dense cities, you'll find taxi, ride hailing, used car sharing is right around less than 2%. Even as you zoom into those areas, at the lowest, you'll see a personal car usage drop to about 75% or so. If you zoom out to the whole United States, more than 90% of all people miles traveled is in personal cars. It's hard to overstate the incumbency of driving yourself.
David Abel: Just to come back to one of the questions I was asking, is a goal of Uber to actually reduce congestion? Is it to reduce miles driven? I mean is that an operating mission?
Adam Gromis: Congestion hurts our business. It's in our best interest to try and be mindful of what we can do to drive efficiency. The business really started with what can we do to add efficiency to an otherwise overbuilt system of mobility? There's about 1.2 billion cars in the world or so, and there's usually one to two people in the car. If you consider a four to five-seat car, that means, at any given moment, there's about 100 million to 200 million empty seats just moving around the world. The basic insight of the business, many years ago, was to say, "What if you could push a button, grab one of those seats going in your direction?" At this point, the question for us is to say, "What can we do to drive more efficiency with our technology?" We recognize that, for decades, VMT, vehicle miles traveled, have been painful for cities. If you look at 1970 compared to today, the total vehicle miles traveled in the US is more than three times what it was. Under a mobility-as-usual circumstance, we expect that to grow another three times by 2050. The question is: what can we do with our technology to provide more of what cities want, the movement of people, lower emissions, while minimizing the need to move vehicles?
David Abel: Ashley Whillans, what kind of policies should lawmakers be considering to either incent or coerce more sustainable practices such as carpooling by these ride-sharing services?
Ashley Whillans: I think that these data emphasize that behavioral interventions might be really challenging in and of themselves to shift commuter behavior. There's actually kind of formal research on what you were already mentioning, that people feel the sense of car pride, that we associate driving with high status and transit use with lower status. That when we think about driving, we think of freedom and autonomy and control. It's very easy and efficient. My data really suggests that behavioral interventions aren't enough, and so where we have seen traction and movement is, one, when you take away the easy option. In terms of organizations, they take away free parking. When you limit the number of spaces available for parking or you make it quite expensive, this seems to be an effective, heavy-handed incentive for people to find alternative modes of transportation because driving becomes the harder, more expensive option.
Adam Gromis: Might I add to that that there's good research to show that this is in city’s best interest, too? There's a fantastic researcher down at UCLA named Donald Shoup, and he's looked a lot at free parking. It costs cities greatly to offer free parking because there is an expense associated with all that space and to keep it there, and they're foregoing a lot of possible revenue. Free parking not only adds these inefficiencies that you're talking about, but it could be a thing that, if changed, could be good for cities.
David Abel: Adam Gromis, it seems Uber is constantly battling with regulators. What are some areas where you might welcome regulation, if that is even conceivable, as part of an effort to reduce emissions across all ride-hailing services?
Adam Gromis: Regulation is really important on a lot of these topics that we're talking about because they're multi-stakeholder problems. I'm looking at two places right now which I think are at the bleeding edge of policy innovation. First, in California, Governor Brown, when he was still governor last year, signed into legislation the Clean Miles Standard. This will require Uber and Lyft and others in our category to provide enough information to the state in order to make transparent what our carbon emissions per passenger mile are. I think that's the right metric. It, if done right and if done thoughtfully, can be compared across modes. It gives us all a great target to aim at and an option for finding ways to reduce it, either getting more people in each car or cleaning up each car or finding ways that we can reduce, say, the empty miles that drivers need to do in an on-demand service to provide you with a car and a ride. Second, is London. In London, they have a road-pricing scheme. They've had a congestion charge for years. This has been world famous because it's one of the few cities in the world that is doing congestion charging.
David Abel: Now New York is…
Adam Gromis: New York just passed, which is very exciting. In London, so for 10 years they've done the congestion charge, meaning, at peak hours of commute, you've got to pay, I think it's £11.50, to enter the central business district of London. They're adding to that an ultra-low emission zone standard. If you drive a diesel car this year, you have to pay an additional £12.50 if it's at the same time as the congestion charge, but at all times, the emissions charge applies. Over time, they're going to ratchet that up and include more and more cars so that, by some time in the next five years, you have to be driving a battery electric vehicle to not pay the charge. What they've done is they've sent a very strong signal to every user of a vehicle in London that says, "Look, we're going to pay for performance," basically. Uber has, over the last couple years, supported road pricing schemes like that. They include all users. They send consumers a strong signal. This is how we're going to reward the good actors, and this is how those are who are contributing to impact are going to pay.
David Abel: Is congestion pricing something that would be beneficial economically for Uber? I mean if you bar other people from taking cars, you maybe incent them to use your services if you're paying that price. Is that sort of part of the idea?
Adam Gromis: Well, road pricing, just to be clear, a road pricing scheme would not necessarily bar anybody, but you're right to mention that, for instance, road pricing schemes are regressive in nature. They tend to hurt those of lower incomes and small businesses more disproportionately to others, and so it's really important that policymakers consider safety nets and other ways to support low-income users and participants. That's really important for schemes like that, and we would be in support. Generally speaking, it's good for our business to have a smart policy that rewards efficient movement. We are confident that we can work hard to create good technology that drives efficiency. It's a good thing to compete over efficiency. That's good for everybody.
David Abel: Ashley Whillans, what are the pros and cons of the increasing reliance on ride-hailing services? Do you see this as a prelude to more people, especially in cities, giving up cars?
Ashley Whillans: Yes. I do really think it depends on how positive peoples’ experiences with the services are. I have several research projects designed to make ride-sharing, carpooling platforms more fun, more social, more enjoyable. If something feels good and people see the impact of it--that it's a fun social experience--they're more likely to do it again in the future, and it creates these habitual feedback cycles. I think, in the absence of really figuring out both how to incentivize people enough to start using it and then making the experience positive enough that they're willing to not just drive alone in their cars but coordinate with other people in their workplaces and in their communities, in the absence of really solving both of these issues, I think there is obviously the possibility that more of these sort of... The increased availability of rides on the road, Uber, Lyft, others, just will create more cars on the road, more people driving from point A to point B alone and easier. Maybe they don't own cars, but maybe they're still contributing to the congestion problem nonetheless.
David Abel: I wonder how that changes in a new world without drivers. Adam, I understand Uber is banking on autonomous vehicles for its future, presumably with a fleet of electric vehicles. Can you tell us, is that true? Is that the plan? Is it electric vehicles? Can you sketch for us timetables for when you expect these changes to happen, and do you foresee other innovations such as Uber drone flights or an Uber hyper loop or something like that?
Adam Gromis: Well, if you meet anybody that has a sketch of a timeline or a drone timeline or whatever, let me know. I have lots of questions about the future to ask them and whatever crystal ball they may have. I will say that, from a climate perspective, there's been some fantastic research that has been led out of UC Davis, the International Transport Forum, Lawrence Berkeley National Laboratory, and a few others who are asking the question: what happens if we do sharing technology like ride hailing and car sharing and other things like that plus electrification, plus autonomous? Where does that take us in the world of transportation? It's really important that transportation has some new good ideas, because I think you alluded to it earlier, David. Transportation is one of the most pernicious sectors from a climate standpoint. It's about a quarter or more of the world's global climate carbon footprint. In the United States, it's the number-one contributor. In Europe, it's the only sector we haven't de-carbonized since 1990. It is a problematic sector, and it needs good ideas. Those researchers looked at shared plus electric plus autonomous, and they forecasted it into the future. The results are remarkable, as much as an 80% reduction in climate impact from transportation and perhaps as much as a 90% reduction in the number of vehicles that would be needed to move all of us the same amount that we move today. That's amazing, and there's few other ideas that point to those levels of impact, of positive impact. As I consider the varying ways in which we're seeing increasing electrification throughout the transportation system and increasing automation throughout the transportation system, these are generally good trends as we consumers get used to these things like increasing sharing, sitting next to strangers, which for those of us who have driven a personal car for a long time, it becomes a scary thing. It means that there's going to be some growing pains as we get there and we learn about that. A lot of the experiences that we're having and that others in the space are having today, that researchers are having, are measuring operating things that are intended to be shared in a world built for personal use. Roads today, laws today, regulations today all assume we will all forever own a car, drive it ourselves, generally drive it alone. Cars are built by automakers mostly for the driver. All the cool bells and whistles are right up there next to the driver, driving wheel. The rest, everybody else is just a passenger. Cars are not made for pooling today. Most of the laws and regulations and incentives that are out there are not imagining a world of shared use. Curb design is not built for that. We have mostly free parking or maybe paid parking. All of that is intended for a personal owner of a vehicle. As we rethink what a shared world would look like where we're going to share those vehicles, we're going to share seats next to one another, we're going to electrify those vehicles and ultimately have increasing levels of automation. It will take a redesign of all those things. We'll need to look at things like consumer behavior. We find that, for instance, in order to create Pool and make that possible, we had to send very strong price signals. Pool generally comes at a great discount. We know, from experience, that we need to discount it heavily in order to get people to use it. The trade-off for them, in exchange for the lower price, of course, is they have to wait slightly more. They may have to walk a little bit, and they have to sit next to a stranger.
David Abel: In your estimate, are Uber and Lyft and other ride-hailing services, are they good for the environment or are they not at this point?
Adam Gromis: I think we're on the right path. I think a shared future of mobility can be much more efficient than a personal world of mobility that we've experienced for the last 100 years.
David Abel: Ashley Whillans, finally, as a behavioral scientist, what more do you think ride-hailing services could be doing to improve the environment, and do you see them as a part of the solution or part of our transportation woes?
Ashley Whillans: I think being new to the transportation demand management space, I see the potential. Also, to echo your thoughts here for innovation, we need new ideas. We need rigorous experimental testing so that ride sharing can become part of the solution and to take up more market share to create this shared world, this shared environment where we're thinking about coordinating our commutes in an effective and efficient way. I think we have a lot of room to move toward that goal, but I have seen a lot of excitement and enthusiasm in this space for a lot of cross-talking between industry leaders and researchers, which I think is relatively new in the space. Really, all of us are working together to try to make technology part of the solution and to use the best tools from behavioral science and other econometric methods to really address this critical challenge that affects all of us. I think, when done right, ride-sharing services have a lot of potential, and we all need to work together to make these services more efficient and effective.
David Abel: You heard the word pernicious. That's the way Adam Gromis described the transportation sector, as a whole, in terms of its impact on the environment. Ride sharing isn't enough even with more electric vehicles on the road. Bike and scooter-sharing services have grown quickly as a means to solve the problem of the so-called last mile. That is, finding ways to encourage people to use public transportation by making it easier to get to and from a bus or a train. Are these services working, and should regulators be encouraging more of these private efforts, or should they be doing more to control them? Joining us to discuss the future of urban transportation is Nicole Freedman, a former Olympic cyclist and bike czar of Boston who went on to become head of Boston Bikes and now serves as Director of Transportation in the Boston suburb of Newton. Nicole Freedman, for years, you were known as Boston's bike czar. You now have a broader portfolio after a sojourn in Seattle in a similar job. Tell us what your overarching goals are and what motivates you to do this sometimes politically-fractious kind of work.
Nicole Freedman: I think what I'm really focused on is transportation's impact on climate change. In this region, the transportation sector is the number-one contributor to emissions and, essentially, climate change. It's really what can we do with transportation to reduce those emissions and significantly, so not just 5% or 10%, but how can we take those emissions and halve them in the next decade or decade and a half?
David Abel: After working in different cities and on different coasts, can you tell us about some of the more novel ways cities are approaching these issues? For example, Chicago and Los Angeles, I believe, are working on prototypes of a hyper loop. Cities in India are experimenting with electric Vespas. What else is out there aside from Segways and scooters?
Nicole Freedman: Well, it's less about the novel technology and more about doing it right. There are a lot of cities that are exploring things that could be profoundly impactful. New York City, I think, is the most exciting. They're working on a congestion charge. There's nothing new about the thought of a congestion charge. I studied it back when I was in school, but it is one of the single most powerful tools to get people out of their car to use any of the existing alternatives that we have, whether it's public transit, biking, bike share, scooters, scooter share, you name it. Congestion charge is probably the most powerful tool, so hats off to New York City. Sacramento is taking the lead in everything electric vehicles and really answering that question. They have a pilot EV (electric vehicle) car share out there that they're working on now. They're looking at EV buses. They're even looking at autonomous EV buses on fixed routes. I think we'll see a lot coming out of there that will inform us. I mean, great questions: When we have a new development, how many EV charging spots should we have? What's the demand for EV charging in public locations, especially in the suburbs where people have driveways? What speeds should we be installing, and who are the users of these chargers? Seattle, there's a city that didn't have public transit, really, 20, 30 years ago, and they are taking the lead on buses. It's the fastest growing city in the country. What's phenomenal about that is, despite being the fastest growing city, they had no increase in vehicle trips. All of those people that are coming in, they're getting around without driving, essentially. A big part of that is this phenomenal bus system where they're really making rapid transit for busing, and then also the fare structure for companies and for the city really gets people to use the bus.
David Abel: What needs to be done in cities that isn't being done, measures that could dramatically reduce transportation emissions enough that we could see a substantial reduction in the next decade?
Nicole Freedman: I think there's an answer, and it's an obvious answer. It's just whether we have the political will. It's related to pricing. I always say, as a society, we've been reasonably okay at the carrots, so we can put in bike lanes and encourage people to bike. There's things called transportation demand management where we encourage people to take public transit by maybe subsidizing their passes a little bit. What we haven't been so good at and the direction that we need to go is the sticks. When I talk about pricing that really means charging the full cost of driving and putting that on the driver, the full cost of all of the externalities. I used to joke when I was at Boston Bikes, "Look, if I could do anything for bikes, I would never build a bike lane. I would have a congestion charge, a gas tax. I would remove all the parking and, if any parking remains, I'd charge an arm and a leg for it, but I guarantee you-"
David Abel: That made you very popular in the city, I'm sure.
Nicole Freedman: Well, I always followed it up by, "I will never win anything. I'd never get into an elected position." The reality is if, strategically, we did figure out a way to price parking appropriately and price driving appropriately, we could dramatically reduce emissions and driving almost overnight. Again, New York City, the congestion charge-
David Abel: Where you live in a place like Newton, which is a kind of mix of urban and suburban, people need cars. They have kids. They have groceries to get. I mean there are legitimate needs for cars. What more can be done to try to reduce their emissions, essentially?
Nicole Freedman: Number one, you still do pricing, and you take the money and you put it straight into public transit. It's so interesting. You go to any transportation conference, and we're looking at all of this new technology, whether it's the scooters, the hyper loop, the autonomous vehicles. Unilaterally, everyone agrees that public transit is still the most efficient and best way to move the most number of people. Price driving accordingly. Take the money in the revenue from that and put it to public transit. Then the other big factor is land use development and how you develop. There's a really great example in Newton, Massachusetts. We have Needham Street, and there is the potential for about 7 million square feet of developed land. It's really underdeveloped right now with one-story buildings and suburban shopping mall style. We have a development that's coming in that is about 1.5 million square feet, so the biggest development in the history of Newton. They're calling it transit-oriented development, but the T is missing, literally the T. It's 1.1 miles to get to the T, so they're proposing a number of shuttles. (Editor’s note: the “T” refers to MBTA, Massachusetts Bay Transportation Authority, and access to public transportation.) As we were talking about Needham Street, we said, "Look, if there were a T stop right behind that new development, there would be no worry about an increase in vehicle trips. In fact, you probably would decrease vehicle trips for the whole area." You need a dense development that's mixed-use and that's near transit. You do that and you can dramatically reduce the percentage of trips. Yes, if you live in a rural area or an area that's less dense, it's a lot harder.
David Abel: Now a story from Mike Toffel, Professor of Environmental Management at Harvard Business School.
Mike Toffel: We've seen such huge demand for ride sharing around the world, but we don't know yet what the net climate impact will be because it's a complicated analysis. It depends on how much ride sharing is pulling people out of their cars, off of mass transit, or from biking or walking. It also depends on how popular carpool services like UberPool become, which can get as many as four customers in different locations to carpool, which can dramatically reduce their emissions. The question becomes, given we're living in the climate change era, what do we do with this information?
As business leaders and as consumers, there are a few key things to look for. First, how quickly can we move vehicles from fossil fuels toward electrification and batteries? We're seeing some progress in electric vehicles or EVs with cars, Tesla being the most obvious example. The recent news of the partnership between Uber and EVgo to promote the shift to EVs among ride share drivers is a good step in this direction. We're also seeing some progress with battery-powered city buses with companies like Proterra and many others, but from a climate perspective, we need EVs to be powered by carbon-free electricity, which means we need to increasingly shift our electricity grids to renewables and maybe nuclear. Overall, the trajectory to get there is higher fuel efficiency in cars. Shifting from fossil fuels to batteries is farther off for other modes of transportation, but we're still seeing investment in some progress with next-generation biofuels powering shipping and aviation. The US Navy is actually at the forefront of this shift. We're also seeing R&D in battery-powered ships and airplanes. With automobiles, the shift to EVs will take time. Meanwhile, we should watch how policy makers and car companies engage on promoting higher fuel efficiency. In the US, there's an ongoing debate about how aggressive regulations should be to require car companies to increase the fuel efficiency of their vehicles. California had already passed fuel efficiency standards that would increase pretty aggressively, and some other states have adopted that standard. When the Trump administration recently announced it wanted to prohibit California from doing that, the auto industry pushed back to argue in favor of maintaining California's standards. That's quite a change because these same auto companies have traditionally been fighting against higher fuel efficiency standards but are now fighting for these higher standards that they already agreed to when the Obama administration bailed them out from nearly going bankrupt. If the transportation sector is going to take climate change seriously, we need to look for both companies and governments to take several actions. First, to promote higher fuel efficiency. Second, to accelerate the shift to electrification and batteries along with a greener electricity grid. Third, to promote climate-neutral biofuels. We're seeing some activity on each of these fronts, but to really bend the curve to address the climate crisis, we need to see a lot more.David Abel: That's it for Climate Rising today. In our next episode, we'll look at the impact of agriculture on climate change.
David Perry: In fact, over the last 200 million years, plants and organisms have evolved so that there are microorganisms that protect plants against pretty much every stress that plant might encounter, whether it's drought or sort of environmental stresses or whether it's disease or insects. They're already in our food supply. All we have to do is concentrate them and apply them where the stresses are to be able to improve the yields of plants, protect them against stress in a healthier and more sustainable way.
David Abel: Thanks for joining us. I'm your host, David Abel. This is the Climate Rising podcast produced by Harvard Business School. You can subscribe on Apple Podcasts or wherever you listen, and please leave us a review. We appreciate the feedback.
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