Microtransit, or privately operated transit, represents an emergent travel mode in select areas of the United States. Is it the future of public transportation or just a passing fancy?



A brief history of transit…

Microtransit is currently in an embryonic stage and offers a potential to significantly change how persons use transit as compared to historical precedents. Below, we briefly discuss the history of bus transit in the United States and evaluate the initial experience of these private transit operators. We then conclude with an assessment of their likely near-term evolution and the extent to which microtransit could ultimately compete with public transit agencies.

The United States transit market has long been under the purview of public agencies responsible for designing routes, purchasing vehicles, operating these vehicles, and maintaining them as a public service. These agencies run the gamut from large transit providers in cities such as New York, Los Angeles, and Chicago to small agencies serving rural regions. The largest transit agencies operate thousands of vehicles on a daily basis. For example, the New York City bus system carries about 2.5 million daily passengers on over 5,000 buses (MTA, 2015). For millions of people in the United States, these public agencies serve as their primary, and perhaps only, means of daily travel.

Public transit systems operate in a complex financial and regulatory environment which constrains many of their choices and activities. Some significant challenges faced by these types of agencies include:

  • A Complex Decision-Making Process- As public agencies, transit agencies must often employ an open and deliberative process for making operational decisions. For example, changing bus routes may require extensive outreach, technical studies, public notice, and formal hearings. As a result, transit agencies may face challenges in meeting service needs on all corridors, providing desired technological amenities, or quickly responding to new markets.
  • Limited Funding- Another challenge is that these agencies often require extensive capital and operating subsidies to maintain daily operations. These subsidies are generally provided through various sources including the Federal Government, regional agencies, states, and local governments. As operations and maintenance costs have escalated for transit agencies, funding has often remained inconsistent, resulting in more crowded and unreliable operations.
  • Regulatory Framework- Transit agencies also operate within a complex regulatory framework which govern issues such as ADA access for vehicles, driver hiring and retention, work hours, service area and other related items. This regulatory framework permeates every decision the agency makes from the simple act of hiring an employee to implementing complex service changes. This regulatory framework also makes it easier for an employee or patron to challenge the agencies decisions through legal action or other similar efforts.

Because of these factors and others, public transit agencies often find it difficult to implement adjustments as internal or external factors change.

More about microtransit…

A new entrant in the field of public transportation is microtransit, defined as a privately operated transit system, which in many cases mirrors the operations of public transit agencies along select routes. Current microtransit providers include,  Chariot, Bridj, Via, Lyft Shuttle and others. Numerous press articles have highlighted these new services.

Microtransit operators have high levels of flexibility in terms of operational decisions since they do not have the funding or regulatory constraints that commonly affect public transit operators as described above. For example, microtransit operators can implement service changes without engaging in an extensive public decision-making process. Overall, microtransit operators can be highly flexible, tailoring their operations to match short-term or long-term changes in travel behavior.

Some common characteristics of microtransit include:

  • Selective service offerings – These service providers have thus far focused on very limited routes or areas. For example, Bridj currently provides service Boston and Kansas City. Similar to Bridj, Chariot, which was acquired by Ford in 2016, currently serves routes in the San Francisco Bay Area and Austin. In San Francisco, these services primarily connect residential areas with the financial district and the SOMA area. Chariot operates along several of Muni’s most crowded routes, such as the 30X.
  • More amenities and services – Many public transportation buses tend to have limited amenities and are designed more for ease of maintenance and high-passenger capacity than other factors. In contrast, many microtransit providers advertise that their buses offer more space for riders, Wi-Fi, and USB outlets.
  • Integration of Big Data – A key component of microtransit is the use of Big Data on existing travel patterns to tailor service to major routes and origin/destination. Microtransit also integrates smartphones into their operational systems. Chariot even allows prospective riders to join forces and crowdsource new routes or route deviations based on the number of sign-ups.

In San Francisco, typical microtransit fares range from $3 to $6 a ride, which are higher than traditional public transit bus fares for similar routes, ($1-$2). The cost difference for microtransit monthly passes is proportionally similar, but without the benefit of providing service 24 hours a day, seven days a week across the City. Microtransit operators also currently do not provide discounts for youth, seniors, or low income riders or other types of subsidies.

Anecdotal evidence suggests that passengers using these microtransit services view them positively. The online review sites for Bridj Transit in Boston are very complimentary. Bridj offered additional service during periods of heavy snowfall, receiving significant positive response from commuters in Boston.

However, actual ridership for these services continues to be limited compared to public transit.

Microtransit operators are not without difficulties. A disability advocacy group threatened legal action against Leap in 2015, alleging violations of the Americans with Disabilities Act, resulting in it discontinuing further operations.

In addition to regulatory and legal challenges, microtransit faces three distinct challenges that may prove difficult to overcome:

  • First, and perhaps foremost, they are perceived by some that they cater to the more affluent. By providing a premium private version of a public service, there is a risk that some agencies, and/or their constituents, may enact barriers or otherwise attempt to impede their progress. One potential synergy might be for the use of microtransit to provide “First-Mile/Last-Mile” service in locations where traditional public transit agency service is not feasible. Microtransit could also provide additional service along selected corridors where the public transit vehicles are at capacity. Within San Francisco, many of the microtransit providers are operating vehicles along the most-congested routes and, therefore, complementing rather than replacing existing service. Microtransit service is likely to be viewed in a more positive light if it acts to complement instead of compete with public bus service.
  • Secondly, it remains to be seen how well this model works outside of its current locations. A service model that is effective for certain routes in Downtown Boston or San Francisco could be difficult to apply in more suburban areas, where land use and geometry factors are more difficult to overcome.
  • Finally, there is the potential for Transportation Network Companies (like Uber and Lyft) to increasingly offer similar type service. Shared ride systems like UberPool and Lyft Line already offer discounted fares based on shared riders. These services are increasingly operating like microtransit: in San Francisco, Lyft Line’s “Hot Spots” encourage passengers to congregate at select intersections in exchange for discounted fares as a means of making operations more transit-like.  And both Uber and Lyft have recently been experimenting with their own version of shuttle service in select cities.

Will microtransit services replace public transit?

So, will microtransit services replace public transit in the future? While no one knows for sure, we can suggest a range of potential outcomes including:

  • Limited niche service: Microtransit is a niche service that operates in locations conducive to their service model. Under this scenario, public agencies would continue to carry the bulk of transit riders, and microtransit services would coexist within their own niche space to serve unique transit needs.
  • Duplicate services: Microtransit expands operations such that many areas have dual-transit systems. Private transit would provide service in select locations while the public transit agencies would focus on core routes and services for those who are unable or unwilling to pay for the private service.
  • Privatization: Successful microtransit services eventually replace certain public transit routes or even systems such that the only transit service in certain areas is microtransit.
  • A passing trend: Microtransit goes away entirely, perhaps due to factors such as excessive litigation, challenges from public agencies, or competition from TNC’s (or even a combination of all of the above).