Ride-sharing – Will It Make Property’s Location Less Relevant?

(Image from Getty Images/Fortune)

Back in 2010, I bought my own bachelor pad. Before that, I stayed with my parent because my office and my parent’s house is not that far, around an hour drive (trust me, one hour driving time was and still is considered as acceptable among us). But to cut my driving time even shorter, I decided to buy my own apartment which theoretically could cut my driving time to around 20 minutes to half and hour, depending on traffic of course.

(LRT in Singapore. Image from Singapore Business Review)

Then came the (relatively) bad news. A month after the apartment was legally mine, there was an announcement of new LRT (Light Rapid Transit) development in my apartment area. And one of the proposed (now operational) stations is about 100 meters from my bachelor pad. The construction of the new public transportation facility took about 3 years and there were times where it took me an hour and half from to get to the office due to traffic diversions. Yes, my driving time took longer than previous time when I stayed with my parent. And ridesharing service like Uber wasn’t matured yet and its competitors are pretty much non-existent back then.

(Traffic jam on the 101 Highway, Los Angeles. Image from LA Times)

With benefit of hindsight, I should have bought that unit after the LRT development. But of course, the price would be higher if I bought it after. Oh well, you win some, you lose some. Can’t win everything everytime right? Taxicab? Thanks but no thanks.

And according to INRIX, on average U.S. commuters spent 42 hours in traffic and wasted $1,400 in idling gas in 2016. What about Jakarta? 63 hours in 2017. Bangkok? 64 hours. And the one who won the trophy? Los Angeles with 102 hours*. If only we could convert those carbon monoxide to a real trophy and award it to commuters, it might give us some serious thought about how much time we’ve wasted and how much damage we have caused to our planet. That’d give a new meaning (or maybe even a new one) to a phrase “a picture speaks a thousand words”.

 

Location, Location, Location

(Aerial view of Hong Kong’s residential and commercial buildings)

Why are we attached or attracted to certain property or properties? Is it because of the price? Or maybe the facilities around the area? Or is it because we love the neighbourhood? Or prestige attached to it (telling people that you live in Manhattan probably would sound better than say, Brooklyn. No offense to any Brooklynite as I’m just giving an example). Or maybe the location has a scenic view of it that commands a high price and demand (Monte Carlo would be a great example).

Or is it because of the relative distance to where we do most of our activities (i.e working, schooling, shopping etc)?

Distance from where we live to where we do our daily activities has played a very (if not upmost) important reason when we have pick specific neighbourhood. The distance, along with time taken as well as the possible choice of transportation can make or break certain ‘coolness’ factor of whether or not that specific house will get our worthy attention. Unless you work from home, not many people in their right mind would actually love specific property location if it involves 4 hours of extreme commuting to and from our office on a daily basis. Therefore, you either have to fork out more money for downpayment/monthly mortgage payment to get closer to city centre (or wherever your working place could be) or bite the bullet by getting a house quite a distance from it and suffer the traffic jam for the rest of the working life.

In other words, you can’t have the cake and eat it too.

(Traffic jam in Jakarta, Indonesia. Image from Getty Images/Asia Times)

And it’s not only restricted to commuting to and from our office. We also have to face similar dilemma regarding commuting of our kids to their school (unless they’re home-schooled) or when we need to do our weekly or monthly shopping for our groceries. What about during holidays like in the summer or special festivities? The distance from our home to our kids’ school, hypermarket, our parents house, recreational parks and others have become the contributing factors in choosing our dream home.

And don’t forget that our spouse could be working too, so his or her consideration would need to be taken into as well.

Then a young founders by the name of Travis Kalanick and Garrett Camp founded Uber in 2009 and it continue to give a new meaning to transportation. No longer we are at the mercy of a cab drivers and their tantrum (not all, as I’m sure there are good and professional cab drivers out there), but also we got the mobility service as and when we need them. And since imitaiton is the highest form of flattery, a slew of other ride-sharing startups had started to copy Uber’s business model and upending the value of taxicabs’ medallion, regulations (and surge pricing) be damned.

Like it or not, ride-sharing opens a new dimension in transportation and makes us questions whether  taxicab (and to some extent, public transportation itself) is still relevant. And it begins to make other thing less relevant as well.

The importance of property location.

 

Why Ride-sharing Will Make Property’s Location Less Relevant?

 

Why do we care so much about our distance from home to our i.e office? Obviously because mostly it will dictate time spent during the commuting, as well as what we can do while commuting. It’s great if the public transportations are available everywhere on this planet like in Singapore (one of the reason I love to visit Singapore is because of the efficiency and coverage of their public transportation services, especially MRT and LRT), but a lot of countries are much bigger than Singapore and their population is more scattered than that tiny state.

And Singapore government wasn’t really a big fan of car ownership anyway as the car price in Singapore is one of the most expensive in the world. But for the rest of us, car ownership is like a necessity, maybe just a tad higher than Abraham Maslow’s basic hierarchy of needs (food, shelter and clothing). But with car ownership, comes the dilemma of it like time wasted during traffic jam and air pollution as mentioned above.

But what might happen if and when we no longer deemed unproductive during traffic jam? What if time spent during morning or evening rush hour can be changed to something more meaningful like listening to podcast or reading some books instead of playing some scissors-paper-stone? After all, the concept of ride-sharing means we are just merely a passenger inside a vehicle instead of driving it, right?

If we can get back those hours for some productive things while commuting and still arrive at our destination feeling energetic and psychologically-motivated, what’s the point of having closer and closer real-estate (read:home) to our office? Yes, there are jobs that regardless how efficient ride-sharing is, it’s simply can’t be done while commuting like those working at the factory floor. But for others, life-hacking our way while stuck in traffic jam probably mean some deals can be closed during those hours.

That’s what I called a continuous productivity.

So if we can continue our daily tasks and activities (albeit relatively limited in some cases) regardless of time and energy taken while enduring the life-sucking activity called “stuck-in-a-traffic-jam”, where do we actually live is no longer a concern. We can just buy our dream home regardless how far it might be (of course there’s certain limit to that!) from our office and continue working while commuting. Our dream home is no longer a choice between a small pit but close to city centre or large house but far away from it. And with future transportation has started to tilt towards autonomous-vehicle, perhaps one day we not only have to worry about time spent during commuting but also less headache from traffic jam and honking every now and then as I don’t think the algorithm inside those vehicle are prone for emotional stress and creates a behaviour like reckless driving which could lead to an accident, one of the reason why we have a traffic jam in the first place.

(Instacart personal shopper. Image from TechStartups)

And it’s not only commuting to and from work. Ride-sharing (and delivery services) no longer limits itself of only transporting people. Uber Eats is delivering food. Instacart is delivering groceries from various retailers. HopSkipDrive allows parents to breath easier by transporting their kids to and from school (or other school activities). And if you want to buy something online, there’s always Amazon and Alibaba. The last time I checked, you don’t need to pick it up yourself as it’s delivered to your doorstep.

Having said that, I never said that ride-sharing will make a property’s location would be deemed irrelevant in the future. It will still be a factor (if your potential neighbourhood is under a flight path or crime-ridden, it might give you headache later), only less significant than what we currently presumed. Ride-sharing (autonomous or otherwise) is here to stay, and even the big guy like Ford, BMW and Google (through Waymo) has started to offer it. And never forget the incumbent, Uber. Regardless of recent controversies they’re still a force to be reckoned with, and they’re still betting big on autonomous vehicle.

Maybe ride-sharing has actually enabled us to have the cake and eat it too.

* according to CBS News here

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