Uber, But for Carpools

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Carpooling in America has been is on the decline since the 1970s, but a new service from Uber could bring it back.

Hiring an Uber to take you to work every day would normally be prohibitively expensive. But what if the driver didn't need to make much money at all? What if the driver was willing to pick you up for next to nothing? What if they were on their way to work as well?

That's one possible use case for Uber's latest offering, Destinations. It's pitched at existing Uber drivers who want to earn a bit more by picking up another passenger en route. But it has the potential to greatly expand the carpooling market by enlisting everyday solo commuters as very-part-time Uber drivers. Here's The Verge describing the feature last fall:

Starting soon, Uber drivers looking to earn some extra money on their commutes to and from home - especially those who drive part-time - will be able to with the ride-hailing app's new "destinations" feature. Drivers heading in a specific direction can input their destination into the app, and Uber's algorithm will send them ride requests that appear along the way. Requests that would force them to deviate from their route would be filtered out.

The feature is billed as a way to heighten driver flexibility, but it could have much more far-reaching consequences. Uber loves to talk about how many of its drivers are only part time; 61 percent of drivers in the US have full- or part-time jobs outside Uber, the company says. If you never have to deviate from your route, suddenly anyone has the potential to be an Uber driver, regardless of employment status.

Let's say you drive from Seattle to the Eastside every day. Turn on the app, and pick up a couple of commuters who are headed your way. Even if they only pay you a couple of bucks, it more than pays for your gas and gets you access to the HOV lanes. Two passengers a day each paying a dollar each way gets you halfway to the monthly lease payment on a new Nissan Leaf. You get a new car on the cheap, and your passengers get a one-seat ride to the office that's cheaper than the bus.

This kind of ad-hoc carpooling simply wasn't possible in the pre-Uber era. Substantial transaction costs prevent the necessary critical mass of drivers and riders from emerging. While iCarpool and RideShareOnline already exist, Uber could leapfrog them both. The company would enter the market with a huge install base of users who are in the habit of opening the app frequently and have already uploaded their credit cards. Being on-demand also means you don't have to commit to a car pooling buddy who will be ready to leave at exactly the same time you are every day. The timing is good, too, as the proliferation of HOV-3 and HOT lanes incentivize 3-passenger carpools.

If Uber's serious about this - and to be fair, it's not clear they are - they'll need to make it super easy for a SOV driver to become an Uber driver. The barriers to becoming a driver (background check, incorporating as an independent contractor, paying taxes) are probably still too high for the average 9-to-5 office worker to bother.

Update: via Eric Butler on Twitter: UberCOMMUTE exists in China.