There is an interesting conversation going around in Hudson County, New Jersey, right now to do with real estate, house prices and Uber, the ride-sharing and limousine app.
In pubs, restaurants and cocktail bars, people are seriously discussing moving farther away from Manhattan to less convenient neighborhoods — where houses and apartments tend to be bigger and less expensive — because they have recently discovered Uber.
For some strange reason, Uber seems to be both cheaper and more convenient in New Jersey than it is in New York. Two Uber drivers recently told me why they believe that is: There is an oversupply of drivers in New Jersey, and an under-supply in New York, these drivers say.
We’ll explain why in a moment, but the effect of that imbalance is interesting.
Uber can be expensive to use — everyone dreads “the surge,” when prices go up due to high demand. But in New Jersey, surges seem to be less frequent and less extreme than they are in New York.
This makes Uber cheap to use in New Jersey, even cheaper than getting a taxi. You can frequently save money using Uber. (My New York colleagues tell me they believe Uber is generally more expensive than a taxi, but all this data is anecdotal.)
And that, potentially, could change the real estate geography of Hudson County, the pseudo-metropolis of 635,000 people that sits opposite Manhattan on the western bank of the Hudson River. Until now, the most desirable places to live in Hudson have been Jersey City, Hoboken and to a lesser extent Weehawken. That’s due to the fact that those cities sit right next to the Holland and Lincoln tunnels, and on top of the N.J. Transit train and PATH subway lines that go in and out of New York. Ideally, commuters want to live near a train or bus stop into the city.
But because Uber has made getting around in Hudson County so much quicker and more comfortable, people are considering moving farther out to previously less desirable neighborhoods, like Jersey City’s Heights and Greenville areas. Until now, they have both required long walks or uncomfortable bus rides for residents who need to get to Manhattan. A daily $US6 Uber ride to the nearest PATH adds up to just $US1,500 a year in commuting costs for a Heights or Greenville resident. That would be easily offset by the cheaper mortgage or rental fees you’d pay to live in the Heights’ high-ceilinged, big-roomed buildings, which have clifftop views of the New York skyline, or Greenville’s full-house abodes.
This is all great news for the good people of Jersey City, Hoboken and Weehawken, of course. But why is Uber doing them this favour?
It turns out that any driver who is licensed to drive a taxi or limo in New York is automatically licensed to do the same in New Jersey, drivers have told me. But New Jersey drivers are not cross-qualified to drive in Manhattan, I am told. Many New York drivers thus end up driving for Uber across the river in Jersey, but Jersey drivers cannot go to New York. (Even if this is not the reason, I can confirm that many New York drivers end up driving for Uber in New Jersey.) The obvious result: There are always Uber cars available in Hudson County.
That oversupply of drivers fends off surge prices even when it is raining.
Whether it will reshape the real estate market is a different question. But the fact that people are even talking about it shows you the power tech can bring when it comes to reforming public transport options, and reshaping neighborhoods.
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