Transportation Network Companies – The Nexus – Urbanism Next

Transport network companies (TNCs), also known as ridehailing companies, provide on-demand transportation services for passengers. In contrast to taxis and other more traditional for-hire transportation services, TNCs typically do not maintain their own vehicle fleets or operate conventional dispatch centers. Instead, passengers request rides directly from private drivers under contract with a TNC, usually through the use of a smartphone app. Noteworthy examples of TNCs include Uber and Lyft.

The Covid-19 pandemic is causing dramatic changes to the TNC industry. To find out more about these changes, read Urbanism Next's TNC Covid page.

Read Urbanism Next's two new reports in the Covid-19– Impacts to Cities and Suburbs series, Key Takeaways Across Multiple Sectors and Impacts to the Urbanism Next Framework, to learn how the Covid-19 pandemic is changing different elements of urban living, including to transportation, urban design, building design, and e-commerce.

Ride Types – Individual vs. Shared

Typically, TNCs offer two distinct types of ride requests: individual and shared.  The individual option allows one person or a group travelling together to request a ride from origin to destination, similar to how taxis have generally worked. In contrast, the shared ride option allows for multiple unrelated parties with pickup and dropoff locations along a similar route to share a vehicle, usually at a discount from individual rates. Both Lyft and Uber have shared ride options integrated into their platforms, but the availability of a shared ride is dependent on the local context and the relative density of origins and destinations in an area.

Dynamic Pricing

Unlike more conventional transportation services such as taxis and shuttles, which typically charge fixed rates based on destination and distance travelled, TNCs may dynamically adjust their pricing, which is also known as surge pricing, based on ride request volume and driver availability. This can result in rates that are considerably lower than taxis, particularly during periods of low demand. However, the opposite can prove true during periods of high demand, with TNC rates sometimes far outstripping those of taxi or shuttle services operating during the same time period.