The question about all these private operators, seeking to create something between large-scale transit and the private car, is this: Are they going to work with high-capacity transit or try to destroy it? There are signs both ways.
If microtransit co-ordinates with conventional big-vehicle transit, we get (a) lower overall Vehicle Miles Traveled, emissions, and congestion, and (b) stronger cases for transit-oriented land use and thus (c) better, more humane and inclusive cities. If they compete with it, drawing away customers from big vehicles into smaller ones, we get the opposite.
If it turns out to be a fight, the playing field would have to be leveled in terms of the overwhelming public sector cost drivers such as workforce compensation and Federal regulatory burden before we have a fair fight. (And I mean leveled upward, toward fair wages and policies that respect the civil rights agenda encoded in Federal transit regulations.)
Consider the latter: Do we need to clarify the Americans with Disabilities Act so that the cost of complementary paratransit (which takes 20-40% of most transit agency budgets) is shared by all private transit companies operating in the space? Will we require private transit to do Title VI equity plans to prove that they do not discriminate against people with a low ability to pay? (That would be interesting, because neglect of low income people is intrinsic to most profitable business models, which is why you've never seen an airline magazine ad that appeals to low-income concerns.) The enormous burdens of Federal regulation — most of it designed to implement a civil rights agenda that's theoretically endorsed by all sides — would have to be shared before we'd know who's really best for which market.
If it were a fair fight, high-volume urban transit (not just rapid transit but also high-volume frequent local bus lines) would continue to prevail where it's the best use of both labor and scarce urban space. My fear is that it's going to be an unfair fight, one that's only made worse when the media frame it as 'little enterprising' upstarts vs 'big, old' agencies. In such an unfair fight, the upstarts can too easily win through means that are destructive to justice and the environment (low wage "contractors", replacing space-efficient big vehicles with smaller ones) rather than through finding the most efficient equilibrium for all the transport needs of a city.
As Jaffe notes, the way forward is a difficult one for upstarts who are used to thinking of transit agencies as enemies. (It can also be difficult for transit agencies and especially their unions, who may have their own defensive and territorial feelings to work through.) The way forward is for less expensive service tools, including the upstarts, to focus on lower-density suburbia where the land use patterns make efficient big-vehicle transit geometrically impossible. The upstarts could even become contractors of the transit agency part of the time — paid to do things that they can do more efficiently than big buses can — as taxis often are today. And they can do this while also operating in the city at much higher price points than conventional transit, so that they aren't undermining the space-efficiency of those existing systems.
But when I hear the upstarts appealing to elitism, and derogating conventional high-efficiency transit, I wonder where we'll end up … One thing is for sure: This sector is going to need strong regulation to turn it into a force for good.
There's room for hope. As I monitor how the upstart microtransit companies talk to their customers and investors, I notice that their early appeals to elitism and generalized transit-hatred seem to be giving way to more practical and inclusive messaging. Let's hope the markets (and hey, that means you and your purchasing choices!) reward the companies that want to be part of a humane, sustainable, and efficient city.