Learning From Uber and Lyft: The Case for Passenger Experience in Transit

Yann Leriche Jun 11 2019

Transportation Network Companies (TNCs) like Uber and Lyft are now established transport providers, offering single ride or shared ride (Uber POOL, Lyft Line) options.

Marketed as new mobility options that would reduce car ownership and congestion in cities, TNCs have not proven to solve these societal problems. Actually, ridesourcing companies have likely increased vehicle miles traveled, and removed, in some places, more people from public transport, biking and walking than they have fed transit with complementary first and last mile trips.

That said, it is undeniable that TNCs have brought important innovations to the mobility sector: a user-friendly interface, ease of payment, service reliability, communication with drivers when needed, efficient real-time information, all in all, a consistently good passenger experience.

How are these elements related? To what extent does the customer experience component drive a person’s decision to use a ridesourcing service instead of public transport services? Understanding the dynamics of TNC appeal, especially versus transit, is key to answer these questions and address the central pursuit in most public transport discussions:

How to increase the transit customer base and stop its ongoing decline in the United States?

Time saving: a key driver in the choice of travel mode

The question to start with is why do people decide to use a TNC rather than public transit? Different studies found that shorter travel times are the primary determining factor of TNC use, and also showed that a significant portion of ridesourcing trips are made for leisure purposes in the evening or late at night when transit services are not operating as frequently. Similarly, a survey showed that a majority of TNC trips could have been made by bus or rail, but the trip would have taken the rider twice as long. Along the same lines, the Shared Mobility Center found that respondents who replaced transit trips with TNC trips mentioned shorter travel times and wait times as the key reasons behind their modal shift.

However, despite these perceptions, actual time savings from TNCs were not always significant, as found in a study of 3,075 fares for 614 trips by Joseph P. Schwieterman and Mallory Livingston from the Chaddick Institute for Metropolitan Development at DePaul University. For example, when researchers compared the average travel times between downtown Chicago and surrounding neighborhoods, travel times are actually quite similar. A trip from downtown Chicago to the Northern neighborhood would take 44 minutes using public transit, while the trip using UberPOOL or Lyft Line would take a rider 49 minutes and 42 minutes respectively. Time savings are more significant with private rides (trips took 29 minutes with Lyft, 33 minutes with UberX). The Chicago Transit Authority therefore remains, in any case, quite competitive for downtown trips.

Are these time savings enough to explain the appeal of TNCs?

Microeconomic theory can shed some light on this question. A traveler’s main goal is to choose the mode of transport that minimizes the full cost of a trip, including both monetary (the metro fare or the UberPool price) and non-monetary (including travel time) factors.

As to the monetary component, a rider’s willingness to pay depends on these factors:

  • Socio-economic characteristics, especially his or her financial means
  • Travel purpose, including a willingness to pay a higher fare for professional trips than for leisure trips
  • Situational factors, such as the time pressure under which his or her trip is undertaken (for instance, going to the airport to get on a plane is associated with a high time pressure)
  • Other experiential factors including comfort, reliability, access to information, perceived quality of the experience from beginning to end, etc.

The non-monetary “time cost” factor corresponds to the disutility of time spent traveling. However, the perceived value of time is highly subjective. Microeconomic research has shown that access time and waiting time are more negatively valued than in-vehicle travel time. In other words, the same amount of time spent walking to a train or bus station, waiting for a train and sitting on a train will be perceived differently, with a more negative perception of the first two activities. Simply put, the time spent walking to a station or stop and waiting are viewed as inconvenient and a strong “waste of time.”

This has concrete consequences. Let’s take the example of a person who wants to go back to a residential neighborhood from downtown after an afternoon out. It would take her 35 minutes using a TNC, while it would take only 20 minutes by metro. However, a ridesourcing car can pick her up right where she is, while the station is a ten-minute walk away. Metro services are quite frequent at that time of day, but she still may have to wait five minutes for her train. Both commutes will take 35 minutes, but the 15 minutes spent accessing and waiting for the train are viewed more negatively than travel time, on average more than twice as negative. With a TNC, there is little to no access time, and efficient real-time information diminishes the perceived “waste” associated with waiting time. Therefore, the rider perceives the time cost of the train ride will be higher. (This comparative advantage of the TNC option may be somewhat eroded by ridesplitting services such as Uber Express Pool, which require users to walk a short distance to access the vehicle).

In the study, Schwieterman and Livingston of DePaul University also determine the monetary cost of saving time by using a TNC instead of public transit. They find that the average traveler pays the equivalent of $42 and $40 per hour of travel time saved on Lyft and UberX respectively, versus $38 and $108 on Lyft Line and UberPool respectively. All these actual costs paid by riders exceed the time-value estimates calculated by the US Department of Transportation[1], which is $14.95 per hour for travelers on personal time (that is, most commuters), and $28.85 for business travelers on average.

Time saving does not fully explain the choices people make

This leads to a simple but important finding: Most of the riders who choose TNCs versus public transport would not do so if the only goal was to save time. The cost to save a few minutes on a ride is indeed much too high for the TNCs to make financial sense, except for a minority of wealthy people that ascribe an elevated value to their time.

This means that most of the customers who make the choice of a TNC service are paying for something more than just time saving. Time is only one factor in the non-monetary cost of a trip; and other factors such as safety, comfort, reliability, access to information and perceived level of service are also key considerations.

TNC users pay for a better passenger experience

Non-monetary and non-time related costs of mobility are hard to quantify, and researchers have developed different models to integrate these factors into their analyses to evaluate the full “generalized cost” of a trip, including monetary and non-monetary factors.

Schwieterman and Livingston followed such an approach to better understand the choice mechanisms that lead riders to use public transit or a ridesourcing service. Their findings are qualitatively no surprise: The lower the perceived quality of transit-service, the higher the likelihood of choosing TNC trips over public transit.

Quantitatively — with all the limits that we can attribute to these types of calculations — the results are enlightening:

“Passengers are five times more likely to opt for ridesharing when they perceive the experience of using transit as unfavorable than when it is perceived as favorable”

These results are based on Chicago data, but similar conclusions have been reached by several analyses. A study published by the Boston Metropolitan Area Planning Council showed that riders were willing to pay a substantial premium for the convenience and predictability of TNCs.

Turning wasted time into productive time on transit

Research on public transit also raises a new issue to consider: While commuting time had long been classified as unproductive time, separating one productive activity from the other, it is increasingly perceived by commuters as a precious time to use for work or leisure. Smartphones allow commuters to stay connected and to maximize activities on board, progressively repurposing daily commutes and making them more productive.

Through a survey involving 888 public transport subscribers in the Paris Region, Adoue found that 60% of smartphone-equipped users always performed activities using smartphones, tablets, etc.) while commuting, and 98% reported they did so occasionally. Adoue’s study also highlighted the fact that unreliable cellphone network connection is considered a major discomfort by the majority of public transport users. In Transdev’s recent “digital travelers” survey, 42% of respondents declared they would use public transit more often with the availability of new services such as WIFI technology, trip planners and mobile ticketing.

Of course, the quality of one’s commute will influence his ability to perform an activity on board. It is easier to answer e-mails or read documents while comfortably seated than it is while standing on a crowded bus. Lyons and Urryfound that when a person is able to engage in activities comfortably, the perceived “wasted” time is reduced. This will diminish the relative importance of the value of the time savings which is, as we have seen, a key determinant of modal shift. Ohmori and Harata found that 30 to 75% of Tokyo commuters were ready to pay for a “more comfortable train environment which alleviates the constraints to engaging in activities” (p.558).

The key learnings are thus the following:

  • Riders negatively view waiting time and access time
  • Riders are highly sensitive to the quality of service which has many experiential aspects
  • Riders are willing to pay for more than time savings
  • Riders place a higher value on a trip that allows them to perform other activities while on board

Transit has the opportunity to improve passenger experience and boost its attractiveness

All these elements lay the case for customer experience. Riders do not buy transport, that is, physical movement. They buy accessibility, which covers much more than the movement from point A to B. Accessibility refers to the ease of reaching goods, services and activities, as well as friends and loved ones. An area that may only be reached using a low-quality transport service will be considered less accessible than an area serviced under the same travel-time and monetary conditions by a transport providing a great experience.

Transport Authorities are very conscious of this need: A survey conducted by IPSOS (a global market research firm) for Transdev, in fall 2018, in which 45 Transit Authorities in the US participated, found that 98% of Transit Authorities considered improving the passenger experience among their top priorities over the next few years.

Transdev has developed powerful solutions to enable Transit Authorities to achieve this goal and drive continuous improvement of the passenger experience. For example, our T.ex program has been designed to perform structured audits of the passenger journey to assess all aspects of transit trips. It deploys multidisciplinary teams using various passenger personas to create tangible action plans for improvement. The goal of the audit is to engage and learn from both passengers and staff. It was recognized for an award by the French Association for Customer Relations in 2016. Another example is our data-driven Mystery Traveler program, focusing on the assessment of the service delivery aspects which really matter to passengers. Transdev solutions implemented in Nassau County, Long Island, NY, have enabled an increase in paratransit rider satisfaction levels (percent scoring their “overall satisfaction” at 7 and higher on a 10-point scale) to 89% from 70% in two years.

Nassau Inter-County Express (NICE) paratransit service: percentage of satisfied riders

The secret sauce: Adopting the passenger point of view and rigorously executing proven programs

Passengers already recognize that a mobility experience is both rational, (e.g. frequency of service, punctuality, wait times, smooth transfers, availability of information and alerts, ease of paying for tickets) and emotional (e.g. frustration, anxiety, surprise). Therefore, the only way to truly increase customer satisfaction and ensure the appeal and true convenience of public transit is to ensure a consistently high quality passenger experience in all rational and emotional aspects of their trips.

This requires embracing the passenger point of view and executing rigorous programs that assess the passenger journey, evaluating every physical and digital touch point as to whether it generates satisfaction or frustration.

We have done such step-by-step audits and developed improvement plans for and with our transit clients in many cities across the world, including bus, paratransit and rail.

Some improvements, including more frequent buses, better payment options and improved passenger information, can be expensive, while others do not require significant capital investments (drivers’ attitude, vehicle cleanliness, signs and information, etc.). All of them require discipline in their execution, and help build a culture focused on shared engagement in genuine customer care.

While it takes strong ongoing commitment, we have learned that concerted focus on improvement action plans does make a major difference and can change the dynamics of transit in a city.

We are therefore optimistic and excited about the opportunities ahead for transit to truly improve the passenger experience, increase ridership and be the backbone of our cities’ transport systems.

[1] U.S. Department of Transportation’s Guidance on Value of Time by the US Department of Transportation. Schwieterman and Livingston used the latest recommendations (2015) and converted them to 2018 dollars.