TECH WARS | Have You Noticed? Taxis+Uber+Lyft=More Congestion!

Midtown Manhattan traffic averages 4.7 mph,
down from 6.5 mph five years ago. 

Back in 2015, on this blog site, I said that Uber's putting more cars on the road  seemed to be creating more congestion in New York City, 

My friend and co-thinker David Hochman instantly chimed in to say that he had the same perception.

We got some pushback on this idea. We decided to wait for data.

If you saw the same thing, guess what? We were all seeing straight. A few weeks ago, a study concluded that Uber and Lyft are indeed creating more congestion, more trips, more miles. 

Objectively, midtown traffic speed is measured at an average of 4.7 miles per hour, down from 6.5 miles per hour five years ago. Support has grown for rules or charges to discourage cars from coming into the most congested parts of New York City. One approach is a Pigou Tax such as has been introduced for sugary soda and cigarettes.

Sure, part of the congestion problem has been growth of the New York economy. But consider that this effect has been offset by the decline of brick-and-mortar retail stores. These stores have lost out to Amazon and other on-line vendors. Consider also this:

• The lobby of my building in Chelsea is right now being torn apart to make room for packages. Residents are having to walk through the basement entrance.
• Why? Because when the building was erected in the 1960s there was no space allocated for packages and the cabinet space that was added a decade later wasn't sufficient. 
• Now the storage space is being expanded ten-fold.
• Some buildings in Manhattan just a few years old are already overwhelmed with the packages.

These package deliveries require more trucks and they are one source of greater traffic. But the biggest culprit may simply be the number of vehicles on NYC streets that are available for hire:

• The number is now up to 103,000, double the 47,000 figure for 2013, says the Taxi and Limousine Commission. 
• Of these vehicles, 68,000 are affiliated with ride-hailing app companies, including 65,000 with Uber alone. 
• Yellow taxis are capped by city law at just under 13,600, with the idea of limiting congestion. The City's intent has been circumvented. (Full disclosure: I've served as an expert witness for an association of taxi-medallion owners and an association of Airbnb owners.)

New York City now has many more police on traffic duty and is taking another look at congestion-pricing plans that were advocated by Mayor Michael Bloomberg. A plan of this type is being used successfully in London. (A similar plan for Paris met with more opposition.)

New York City seems to be facing a conflict between new technology attractive to many consumers, and the people whose livelihoods and assets are being disrupted:

• taxi owners, 
• drivers, 
• other drivers facing longer delays, and 
• businesses affected by the congestion of heavily trafficked streets. 

The same disruptions are taking place for retail stores, housing renters and others disrupted by the wonders of new technology. The inconveniences have knock-on effects for owners of commercial and residential property.

This conflict is not new. If you come back to this blogsite in the next few weeks, you will find more posts under this hashtag (#TechWars). You will see how the conflicts have played out in many industries where technology has changed. This may serve as a guide to what we may expect during the coming years. The general theme is that the introduction of new technology requires a period during which the technology is tested and during which natural enemies emerge.

For example, using engines on ships was fought by sailors. Railways and cars and tractors were resisted by breeders and outfitters of horses. Photography was resisted by artists. These days, Uber is fought by cities and taxi owners, and by competitors. Yet Uber has a database that could be enormously helpful in planning for new transportation initiatives.

Invention is only half the battle. Getting the technology accepted where it replaces existing industries is the other half. Marconi spent his life battling the wired-telegraph companies, and the telegraph companies were largely successful in slowing down the introduction of wireless telegraphy. Where Marconi's invention succeeded was in a whole new area that he had not foreseen, namely broadcasting.

The period during which new technologies are tested against old ones can be called one of symbiosis. Sometimes the new technology never completely replaces the old one. Gas never completely replaced wood and coal as fuel. Electricity never completely replaced gas. You may be interested in some of the implications of all this... Stay tuned.

Postscript 1 (January 2, 2018): The Wall Street Journal predicts that a plan for congestion charges will be included in Gov. Andrew Cuomo's State of the State speech.

Postscript 2 (January 14, 2018) The New York Times reviews the growing number of private transportation options for commuters.

To subscribe to this blog, or its comments, or to search its contents or to forward this post using G+, see the options at top right.

NYC Tech Industry - How Big Is "It"? Why Is It Important?

Roosevelt Island Campus, NYC, under construction.

A recent study estimates that the New York City workplace includes 291,000 jobs in the city's tech "ecosystem", with 150,000 of the jobs being tech positions in non-tech industries.

Within the tech industries, 58,000 jobs are tech jobs and 83,000 are non-tech jobs, a total of 141,000 jobs.

The study, The NYC Tech Ecosystem by HR&A Advisors, also concludes that 44 percent of the tech jobs do not require a bachelor's degree.

The study takes the correct position that to estimate the number of jobs in the "tech industry", we should include not just companies like Google and Facebook. It also believes that the count should go beyond occupational titles like entrepreneurs, coders, and engineers.

We took an inclusive stance toward the definition of software and IT jobs in the estimates we did for the NYC Comptroller's 1999 report on NYC's Software and IT industry, but it was not as broad as that of the HR&A report. I was the chief economist for the Comptroller at the time of the report, and Henry Etzkowitz was a consultant to the report.

Adding together the NYC and suburban job figures, the Greater NYC total was 47,000 in the software and IT NAICS codes, for the year 1997. This is one-third of the number of payroll jobs in tech firms in the HR&A estimates.

NYC is second only to Silicon Valley in number of
private tech companies acquired in 2012.

As a benchmark for assessing these estimates, Con Edison's 1999 staff for information resources was more than twice the number of software staff (293 vs. 140).

For software firms servicing Con Ed, the ratio of software staff to other information resources was slightly more than five to one (108 vs. 19).

My interview with Etzkowitz a year ago got into the question of technology as an economic development engine. It prompted some private comments to me from David Hochman that I have obtained his permission to share.

He wonders about the use of the term "tech" and "technology" in connection with the driving of economic development. Using the widest possible definition of tech jobs may not necessarily be helpful. See his blog post on this topic. The implications of his line of thinking include the following:

• The broadest definition of technology may be less useful for economic development purposes than a narrower one. Counting too many non-tech jobs in tech industries may make it hard to focus economic-development support. 
• Including too many non-tech jobs doesn't help the NY Tech Council, for example,  define itself as a "technology" council. Lacking a clearer boundary, it is tied down to software, web site and mobile communications functions.
• NYCEDC could fall into a trap of competing with Silicon Valley or Route 128 on the size of the tech work force rather than the quality of its tech initiatives. The challenge should be to get all the wealth creation, job creation and distribution we can out of the assets NYC brings to the global economy.
• NYC's universities could similarly get lost in congratulating themselves on the number of their graduates in tech industries rather than on the extent of their entrepreneurial skills and the next-generation readiness of their graduates. NYC's universities are still not obviously in the front rank in the tech field. The Roosevelt Island experiment is exciting but has as yet borne limited fruit.

The best news is that in Bloomberg's third term the startup innovation providers moved closer to the big, primary driving sectors. Hochman wrote to me:

You are right - this was resisted at first. What changed is that NYCEDC embraced the synergy/symbiosis, whatever you want to call it, and decided to make that the heart of the marketing/promotional campaign. Bloomberg asked NYCEDC to deliver marketing sizzle, and they did so brilliantly, joined by the Partnership for NYC and the NYC Investment Fund. I get at some of this here.

Hochman wasn't aware of the innovation group that met regularly at the NYC Comptroller's Office in the 1990s. However, he did know about the "New York Academic Consortium" of tech transfer officers that Etzkowitz mentioned in my interview with him. It was for many years bogged down in discussions of techniques of deal maximization, rather than on the more basic question of maximizing economic development. As Hochman says:

That's why I separately convened a group with some tech transfer officers but also many other university office directors with different titles and duties such as director of economic development or director of incubation initiatives. For a time we were the only group in the city - that I was aware of - discussing the cultural barriers to success. Only in the last few years have our institutional tech transfer offices become interested in spinoff formation at all, and it's still not the primary driver in offices that bring in so much money from drug royalties.

While I am a fan of the Cornell/Technion initiative on Roosevelt Island, Hochman has a warning about the way in which it was put together:

I am a skeptic... and I certainly disagree with your (tongue-in-cheek) conclusion that you should have tied your policy initiative to a real-estate program. I think that was a very bad outcome. Some of this I hinted at at my initial comments on the applied sciences initiative, but I haven't done the serious commentary I've been planning since Cornell was announced, though I certainly agree with you on the importance of Manhattanville and the role of engineering generally. 

These economic-development issues are not new. Stuart Leslie and Robert Kargon, professors in the History of Science program at Johns Hopkins University, wrote a paper, “Selling Silicon Valley: Frederick Terman’s Model for Regional Advantage”, Business History Review, Volume 70 (Winter 1996), 435-472. Long before Bloomberg launched his program, the paper explores the origins of the Silicon Valley model for regional economic development, and some problems with its replicability. We covered many of these issues  in Chapters IX, X and XI of the 1999 Comptroller's Report.

Leslie and Kargon show how the Silicon Valley model worked. Frederick Terman, Stanford's provost, envisioned a partnership of academia and industry, and trained students to put it into effect. He cultivated an aggressive entrepreneurial culture.

Beginning in the 1960s, business groups set out to move the model to other places, building their own versions of Silicon Valley, in some cases enlisting the help of Terman and his disciples. The authors discuss several examples, including the New Jersey Institute of Science and Technology, led by Bell Labs; the Graduate Research Center of the Southwest and the SMU Foundaton for Science and Engineering in Dallas, Texas; and the Korea Advanced Institute of Science and Technology - of which the Korean example is rated the most successful. The paper shows both the importance of the contributions of local universities and the limits to their ability to generate startups in the absence of a local tech industry that is available to nurture the environment within which startups can thrive.

More recently, in Invented Edens, Robert Kargon has moved on to write, with Arthur Molella, about models of the techno-city, i.e., a planned city developed in conjunction with large industrial or technological enterprises. The authors map the concept as applied in Norris, Tenn., home of the Tennessee Valley Authority and Disney’s Celebration, Fla.

In the early 1990s, the Disney Development Company set out to spend $2.5 billion to develop 4,900 acres in the Reedy Creek Improvement District. The plan -  prepared by Cooper, Robertson & Partners and Robert A. M. Stern - combines advanced energy and communications concepts with extensive parks and trails. Celebration is designed to be the ultimate techno-city and was named the "New Community of the Year" in 2001 by the Urban Land Institute.

The Terman model has served Silicon Valley well. We need to learn all we can from it. But it is not the only path to innovation in technology. New York City and Celebration and other communities need to explore other avenues.