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By Joe Cortright

A good reporter is always supposed to ask five questions: “who, what, when, where and why?” A new report on ride-hailing provides a range of keen insights about the demand for these services, and has important implications for predicting the future of autonomous vehicles.

There’s a new report from Shared Use Mobility Center, published by the Transportation Research Board, with a ponderous title: “ Broadening Understanding of the Interplay Between Public Transit, Shared Mobility, and Personal Automobiles . The report is a over a hundred pages long, and filled with interesting and often arcane detail about who’s using services like Lyft and Uber, where and when they use them and how this is affecting demand for street space and transit. If you’re a real transportation geek, you’ll want to read the whole thing. But if you aren’t (or in the meantime, until you’ve had a chance to read it) we can boil the whole thing down to five words: drinking, parking, flying, peaking and pricing.

The heart of the work is an analysis of trip-making data supplied by ride hailing companies, similar data collected in San Francisco, and surveys of more than 10,000 customers of ride-haling services in five cities: Chicago, Los Angeles, Nashville, Seattle and Washington, DC. The study also explored the question of whether use of ride-hailing services had any impact on transit ridership in these cities.

The slightly longer narrative take on the report is this: Ride-hail demand is driven by drinking (people who want to avoid having drive their own vehicle on Friday and Saturday nights), by the cost of parking (ride-hailing is a more economical alternative to bringing your own car places where parking is expensive). People traveling by air seem to value their time more highly, and may have no access to a personal private vehicle at one end of their flight. Ride-hailing is highly peaked in those times (especially Friday and Saturday nights) and places (downtowns and airports) in which there is demand. Finally, ride hail trips tend to be short (just 2-4 miles), because customers pay for each additional mile and minute.

The report also tells us a lot about where these services aren’t valued.There’s little demand for ride-hailing when parking is cheap or free, when drivers expect to be sober, and for longer trips, and to destinations that don’t have a high density of people and destinations (or an airport).

As a result of these factors (especially pricing, parking and flying), most ride haild trips tend to take place in a small subset of a region’s neighborhoods (especially in and around downtown, where there’s a density of customers and destinations, and where parking tends to be pricey). Take Chicago for example:

There’s a strong economic implication here: The income and value of time of travelers, and the availability and price of alternatives figures prominently in when, where and whether people use ride hailing services. The risks and penalties associated with drunk driving (legal, financial and moral) likely lead many people to choose ride-hailing when they consume alcohol; in addition unlike journey to work trips, social trips may be groups rather than individuals.

People use ride-hailing services “on an occasional basis” and for trips where speed and reliability are important. Few people use it for commuting on a regular basis.

What this suggests is that the markets for ride-hailed vehicles today–and for their successors, fleets of autonomous vehicles tomorrow–are likely to be shaped by many of these same factors. Demand will be highest where people, and trip origins and destinations are densest, where parking is expensive, where and among populations that have a high value of travel time savings (and the ability to pay). Ride-hailing and autonomous vehicles are going to affect some people, some trips, and some places much more than others.

The content of this report is an excellent addition to our knowledge about ride-hailing and its place in the urban transportation system. It’s a shame that much of the most salient content and its implications are buried in the report. (Just a thought: starting the title of your report with the words “broadening understanding of the interplay” is not an attention grabber). More tangibly, while the report’s data implicate parking costs as a key factor in ride-hailing demand, that observation isn’t made in the report and the word parking appears on just 6 of the report’s more than 100 pages. We’ve tried to punch up the findings a bit to that the meat of this report gets the attention we think it deserves.

Feigon, S. and C. Murphy. 2018.. Pre-publication draft of TCRP Research Report 195. Transportation Research Board, Washington, D.C.

The Week Observed, July 6, 2018
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The eighteenth amendment to the Constitution of the United States was proposed to the legislatures of the several States by the Sixty-fifth Congress, on the 18th of December, 1917, and was declared, in a proclamation of the Secretary of State, dated the 29th of January, 1919, to have been ratified by the legislatures of 36 of the 48 States. The dates of ratification were: Mississippi, January8, 1918; Virginia, January11, 1918; Kentucky, January14, 1918; NorthDakota, January25, 1918; South Carolina, January29, 1918; Maryland, February13, 1918; Montana, February19, 1918; Texas, March4, 1918; Delaware, March18, 1918; SouthDakota, March20, 1918; Massachusetts, April2, 1918; Arizona, May24, 1918; Georgia, June26, 1918; Louisiana, August 3, 1918; Florida, December3, 1918; Michigan, January2, 1919; Ohio, January7, 1919; Oklahoma, January7, 1919; Idaho, January 8, 1919; Maine, January8, 1919; WestVirginia, January9, 1919; California, January13, 1919; Tennessee, January13, 1919; Washington, January13, 1919; Arkansas, January14, 1919; Kansas, January14, 1919; Alabama, January15, 1919; Colorado, January 15, 1919; Iowa, January15, 1919; NewHampshire, January15, 1919; Oregon, January15, 1919; Nebraska, January16, 1919; North Carolina, January16, 1919; Utah, January16, 1919; Missouri, January16, 1919; Wyoming, January16, 1919.

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Boeing and Embraer to Establish Strategic Aerospace Partnership to Accelerate Global Aerospace Growth

CHICAGOand SÃO PAULO, July 5, 2018 / PRNewswire / --Boeing (NYSE: BA) and Embraer (B3: EMBR3, NYSE: ERJ) announced they have signed a Memorandum of Understanding to establish a strategic partnership that positions both companies to accelerate growth in global aerospace markets.

The non-binding agreement proposes the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing's commercial development, production, marketing and lifecycle services operations. Under the terms of the agreement, Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake.

"By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies' customers, employees and shareholders – and for Brazil and the United States ," said Dennis Muilenburg , Boeing's Chairman, President and Chief Executive Officer. "This important partnership clearly aligns with Boeing's long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans," Muilenburg said.

"The agreement with Boeing will create the most important strategic partnership in the aerospace industry, strengthening both companies' leadership in the global market," said Paulo Cesar de Souza e Silva, Embraer Chief Executive Officer and President. "The business combination with Boeing is expected to create a virtuous cycle for the Brazilian aerospace industry, increasing its sales potential, production, creating jobs and income, investments and exports, and in doing so, adding more value to customers, shareholders and employees."

The transaction values 100 percent of Embraer's commercial aircraft operations at $4.75 billion , and contemplates a value of $3.8 billion for Boeing's 80 percent ownership stake in the joint venture. The proposed partnership is expected to be accretive to Boeing's earnings per share beginning in 2020 and to generate estimated annual pre-tax cost synergies of approximately $150 million by year three.

The strategic partnership will bring together more than 150 years of combined leadership in aerospace and leverage the two companies' highly complementary commercial product lines. The partnership is a natural evolution of a long-standing history of collaboration between Boeing and Embraer over more than 20 years.

On finalization, the commercial aviation joint venture will be led by Brazil -based management, including a President and Chief Executive Officer. Boeing will have operational and management control of the new company, which will report directly to Muilenburg.

The joint venture will become one of Boeing's centers of excellence for end-to-end design, manufacturing, and support of commercial passenger aircraft, and will be fully integrated into Boeing's broader production and supply chain.

Boeing and the joint venture would be positioned to offer a comprehensive, highly complementary commercial airplane portfolio that ranges from 70 seats to more than 450 seats and freighters, offering best-in-class products and services to better serve the global customer base.

In addition, both companies will create another joint venture to promote and develop new markets and applications for defense products and services, especially the KC-390 multi-mission aircraft, based on jointly-identified opportunities.

"Joint investments in the global marketing of the KC-390, as well as a series of specific agreements in the fields of engineering, research and development and the supply chain, will enhance mutual benefits and further enhance the competitiveness of Boeing and Embraer," said Nelson Salgado , Embraer's Executive Vice President, Financial and Investor Relations.

Finalization of the financial and operational details of the strategic partnership and negotiation of definitive transaction agreements are expected to continue in the coming months. Upon execution of these agreements, the transaction would then be subject to shareholder and regulatory approvals, including approval from the Government of Brazil , as well as other customary closing conditions. Assuming the approvals are received in a timely manner, the transaction is expected to close by the end of 2019, 12-18 months after execution of the definitive agreements.

"This strategic partnership is a natural evolution of the long-standing history of collaboration between Boeing and Embraer on a range of aerospace initiatives over almost three decades," said Greg Smith , Boeing Chief Financial Officer and Executive Vice President of Enterprise Strategy Performance. "It is aligned with Boeing's enterprise strategy of pursuing strategic investment opportunities where they demonstrate real value and accelerate our organic growth plans. This partnership will strengthen the vertical capabilities of Boeing and enhance value for our customers through the full lifecycle of industry-leading products and services."

Boeing and Embraer will benefit from a broader scale, resources and footprint, including global supply chain, sales and marketing, and services network, which will enable them to capture benefits from best-in-class efficiencies across the organizations. Additionally, the strategic partnership will provide opportunities to share best practices in manufacturing and across development programs.

The transaction will have no impact on Boeing and Embraer financial guidance for 2018 or Boeing's cash deployment strategy and commitment to returning approximately 100 percent of free cash flow to shareholders.

Certain statements in this release may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding benefits and synergies of the joint venture and future business prospects, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on current assumptions about future events that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially from these forward-looking statements. As a result, these statements speak only as of the date they are made and neither party undertakes an obligation to update or revise any forward-looking statement, except as required by law. Specific factors that could cause actual results to differ materially from these forward-looking statements include the effect of global economic conditions, the ability of the parties to reach final agreement on a transaction, consummate such a transaction and realize anticipated synergies, and other important factors disclosed previously and from time to time in the filings of The Boeing Company and/or Embraer with the Securities and Exchange Commission.

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