Declines in public transit ridership are pushing transportation agencies around the country to pursue partnerships with tech companies to incorporate on-demand, dynamic shared rides into their services.
Proponents of “microtransit” say they could increase the reach of public transportation by extending travel options to underserved areas and into off-hour travel times when bus service is infrequent or nonexistent. Cities also are betting that subsidized microtransit could potentially lure back riders lost to popular app-based services, such as Uber and Lyft. They view it as a creative way to meet growing needs and balance costs.
“We can’t continue to spend huge sums of money on local bus service if it’s not being utilized as well as it should,” said Gabe Klein, a former transportation chief in Chicago and Washington, D.C. “So how do you enhance local bus service to make it more useful to people in the age of on-demand modes? That is where microtransit comes in.”
In Washington, Los Angeles and Detroit, transportation officials are moving in that direction, calling the operation of flexible-route, on-demand microtransit a way to provide residents with better connections to fixed transit. In some cities, microtransit rides could be available as soon as spring while others are already in the experimentation phase.
The surge in “Uber-for-buses” variations in major metropolitan areas has given public transportation agencies a point of reference, although the concept remains one of trial and error.
For the most part, microtransit has been a for-revenue service catering to commuters willing to pay more to travel more comfortably. But the services haven’t always lived up to their promise. Data-driven, pop-up transit services – such as the now-defunct Boston-based Bridj – have failed to generate the ridership to be self-sustainable. Transit advocates say this proves that it is difficult to make it in the business of transportation without public subsidies.
Bridj launched in 2014 in Boston and a year later in Washington, offering sleek 14-seat shuttle-bus rides on routes tailored to meet the travel patterns of its customers. Shuttles were equipped with free WiFi to entice the professional commuter. But while the service was deemed successful among users, the company could not build a sustainable business model and shut down abruptly last year.
“People’s expectations for transportation are changing,” said Joshua Schank, chief innovation officer at Los Angeles County Metro’s Office of Extraordinary Innovation. “Public transportation has to figure out how to accommodate the new expectations in a way that we improve service for existing customers and attract new customers.”
Besides, he said, transit users want the app-based services that have transformed the way people travel.
“We want to provide some kind of on-demand transit service that is affordable, that anyone can use regardless of income, regardless if you have a bank account or a cellphone,” Schank said.
It all comes down to expanding services and keeping them accessible and affordable. Generally, cities are implementing systems that may rely on vehicles larger than a personal automobile, but smaller than a city bus, as well as routes that can be adjusted based on where passengers are located and where they need to go.
In the nation’s capital, officials envision a microtransit system that touches all quadrants of the city, building on a 2-year-old program called Neighborhood Ride Service by Taxis, which was started to eliminate mobility barriers in transportation deserts. Through that program, officials say, they have found a need for transportation in areas with a concentration of seniors. There is also a need among night-shift workers who are often left behind by crowded buses during the city’s second night rush, when service workers start leaving restaurants and retail stores after 10 p.m. Many are willing to pay an extra dollar or so to get a safe ride home.
“It is convenient. It leaves you closer to the house, and you always get a seat,” said Beth Ward, a Howard University Hospital worker who takes the neighborhood shuttle home on a regular basis.
Driver John Scott, 79, has built a clientele of commuters such as Ward who describe the service as the option between an Uber or taxi and the bus.
Scott, a veteran taxi driver, travels a 5-mile stretch down in a van painted in the city’s official red and gray color scheme. Each night, he makes the run from Howard University Hospital to the Target on the D.C.-Montgomery County line, stopping in between to pick up shoppers at the Walmart, and returning as late as midnight for the late-night workers along the corridor.
People can flag Scott just as they would a taxi or they can find him at any of the nine stops along the route. They can pay with cash or credit card. In the wider microtransit network city officials envision, rides could also be booked via an app or by calling a dispatch system.
Sometimes, Scott stops to tell people about the $3.25 fare, but most riders have learned about it through word of mouth or from fliers at beauty shops, community centers and libraries. Some regulars call him to schedule pickup times and others, such as Ward, know just where to find him.
“Is there room for me today?” Ward said on a recent evening before jumping in the minivan. Two other hospital workers were already on board and soon on their way home, with limited stops along one of Washington’s busiest corridors. The ride, Ward said, gives her peace of mind. She doesn’t have to run along a dark stretch of Georgia Avenue after work to catch a crowded bus that may or may not show up.
The service has become an alternative to the Metrobus 70 line, which isn’t as frequent after midnight. And, if their home is nearby, Scott drops passengers off right at their door.
In Detroit, where the transit system is recovering from the bankruptcy crisis of 2013 and 2014, officials say the city cannot afford to provide frequent bus service to all corners of the city. In partnership with Lyft, the city is about to launch subsidized rides for first- and last-mile trips during overnight hours when fixed routes are less frequent, and in areas where there is low density but still demand for transit.
“In a perfect world where money was no option, we would put fixed-route service everywhere. But that’s not the case that we have,” said Mark de la Vergne, Detroit’s chief mobility officer. “What we are interested in is creating a seamless system for our customers.”
Los Angeles County officials say they hope to supplement the services the agency already runs. One goal, officials say, is to give existing customers a better trip; the other is to win over people who avoid public transportation because it is not as convenient as they want it to be.
“Maybe this option provides something that makes them switch,” Schank said.
But transportation officials acknowledge it may take them a few tries to find the right fit. Each city needs a microtransit solution tailored to its needs, said Rahul Kumar, vice president of revenue at TransLoc, a North Carolina-based tech company that works with transit agencies and cities to provide predictive models to simulate rider demand and fleet operations. In each market, TransLoc dives into local data to understand what riders want, determine what corridors may benefit from the service, and what type of vehicles might be most appropriate to use.
As many as 24 transit agencies are expected to launch microtransit this year, experts say. And more may be joining as cities continue to look at innovations in transportation.
“If they can provide people a better service at a lower cost, and it’s more equitable, what’s not to like?” said Klein, the former transportation chief in the District and Chicago.
Uber and Lyft want to replace public buses, Joshua Brustein Bloomberg
In Uber’s early days, it said it wanted to be “everyone’s private driver.” Now the company and its main U.S. competitor, Lyft, are playing around with the idea of becoming the bus driver, too. Uber has partnered with a handful of local public transportation agencies to strike deals like the one in Pinellas Park, which it expanded earlier this month. Later this month Lyft plans to launch a partnership with Centennial, Col., its first deal where a local government will subsidize its rides. The company also said it has helped a dozen transit agencies apply for federal grants that would pay for a portion of Lyft fares in situations where its drivers would effectively become part of the public transportation system.
Over the past several years, ride-hailing companies and local government officials have often had an uneasy, sometimes outright hostile relationship over regulation. The public transportation deals have been an oasis of rapprochement between them. In part, the ride-hailing deals are too small to seem threatening, according to Kyle Shelton, a program manager at the Kinder Institute for Urban Research at Rice University. “It may affect some routes; it may affect service overall; but it’s not going to replace the main lines that carry thousands of riders per day,” he said.
It quickly became apparent that in areas with few riders, paying for part of a private ride was cheaper than running a bus.
As officials grapple with those questions, it’s hard to ignore the real savings for governments — and real revenue for Uber and Lyft. In 2014, Americans spent $15 billion in fares on public transportation at the 850 public transit agencies that share data with the Federal Transit Administration. The operating expenses at those agencies was $42 billion. Much of the remaining 65 percent of the cost of running the systems came from public subsidies.
Suburban areas with less density and lower ridership are particularly expensive to run, making ride hailing an attractive alternative, said Adie Tomer, a fellow at Brookings Institution’s Metropolitan Policy Program. “If they can provide better outcomes for your population and do it at either the same cost if not lower, that’s a win-win for society,” he said. “This could start spiraling very fast.”
Residents in Pinellas Park, a relatively dense working class area, and East Lake, a richer area that had a publicly run van service, complained they’d be stranded. So the transportation agency decided to share the cost of Uber rides for anyone traveling those two routes. Earlier this year it started a pilot program where people received a 50 percent discount for rides, with a maximum subsidy per ride of $3, to help riders connect to the transit system.
It quickly became apparent that in areas with few riders, paying for part of a private ride was cheaper than running a bus. The program will cost $40,000 a year, or about a quarter the cost of the two bus lines it replaced, according to the PSTA. The PSTA declined to give statistics about its ridership, other than to describe it as a success. On Aug. 1, the agency began offering subsidies for all rides in the county that end at about 20 designated transit stops. “It’s not supposed to be something you’d take instead of the bus; it’s supposed to be something you’d take to the bus,” said Ashlie Handy, a spokeswoman for the agency. On the same day it expanded the initial program, PSTA launched a separate one to give free Uber rides to low-income residents traveling after 9 p.m., when buses don’t run.
Molly Spaeth, a spokeswoman for Uber, said the company was pleased with the response to the project and would continue to look for ways to work with transit agencies.
Officials in Centennial, a suburb of Denver, will launch a similar partnership with Lyft later this month, marking the first time a government will pay for Lyft rides using public funds. Through the program, Centennial will pay for Lyft rides to and from a regional rail stop from an area that has previously only been covered by a shuttle bus. The existing service costs the city about $20 per ride, according to Cathy Noon, Centennial’s mayor, far more than what it will have to pay for Lyft rides. The city projects it will handle 280 rides per day, or about six times as many rides as it currently handles through the bus service. Bloomberg Philanthropies, the charitable group founded by Bloomberg LP founder and majority owner Michael Bloomberg, gave Centennial a grant in 2014 to work on urban innovation.
Around the same time that Pinellas County launched its pilot, nearby Altamonte Springs, Fla., a suburb of Orlando, began paying for 20 percent of any Uber ride within city limits. For rides that ended at regional rail stations, the rate was 25 percent. City officials said Uber keeps them from sharing ridership numbers but that the program has grown quickly. They’re working to expand to several neighboring towns soon.
In July, Miami-Dade County, Fla., applied for a $3.5 million federal grant to improve public transportation, $575,000 of which it plans to use to subsidize Uber and Lyft rides to two train stations, hoping that doing so will increase ridership at those stations by 5 percent. “Ride-sharing companies will mature in the Miami-Dade market but are unlikely to serve low ridership and low income neighborhoods without public subsidy,” the county said in its application. It is also working to incorporate ride hailing into its own mobile ticketing application.
Miami-Dade’s cooperation with ride-hailing companies coincided with the end of a yearslong fight with them over whether to allow Uber and Lyft to operate. Until a few months ago, Uber and Lyft were against the law, and the city handed out violations to drivers as they picked up fares. Carlos Cruz-Casas, assistant director of the Miami-Dade County Department of Transportation and Public Works, said it was odd to plan the area’s future around ride hailing while also debating whether ride hailing should be legal at all. “It was a friendly relationship,” he said. “They were being fined, but at the same time, we’d say, let’s work together.”
Issues of control are going to test these friendships, said Shelton and Tomer. Local governments are eager for data about ridership that they can use to reconfigure services, and Uber and Lyft tend to see information about demand as trade secrets. If ride hailing does drive down car ownership, as both Uber and Lyft expect it will, that could increase demand for subsidized rides, leaving governments holding the tab for new forms of semi-public transit.
Bridj, a startup that runs private bus service in some cities, is proposing a model that would leave more control with the governments. It has no set lines and instead responds to requests made on its app.
Earlier this year, Kansas City Area Transportation Authority agreed to buy 10 vehicles from Bridj, staff them with drivers, and set and collect fares. Unlike the ride-hailing partnerships, which are largely designed to get people to another form of transit, the Bridj program aims to drop people off where they’re actually trying to go. Instead of sharing in fares, Bridj takes a service fee for the use of the technology that accepts ride requests and directs the vehicles on ever-changing routes.
The Kansas City government gets to keep more control, and Matthew George, Bridj’s chief executive officer, said about three dozen cities have inquired about partnerships since the Kansas City pilot started. The company plans to announce at least four partnerships before the end of the year. George thinks private, on-demand bus lines will prove to be more cost-effective than ride-hailing services that use smaller vehicles because they can move more people at once.
George also criticizes Lyft’s and Uber’s spotty track records of cooperation with local governments, and points out that unlike at those companies, Bridj’s drivers in Kansas City are all union members hired by the transit authority. “On the one end of the spectrum you have the very traditional mode that we’ve done for 100 years, and on the other one, you have this Ayn Randian free market free-for-all that doesn’t have basic protections in place for the people who are most vulnerable,” he said. “We’ve shown that there’s something in the middle.”