Microtransit

Microtransit: What I Think We Know

I’ve been thinking out loud about microtransit for a week now, and have processed lots of great comments.  But if you comment, don’t just respond to this post.  Go to the detailed posts that really lay out the argument:  Is microtransit an actual idea?  Does that matter?  And most importantly: Is microtransit capable of being a sensible investment that can be justified from widely accepted goals of public transit?

To sum up, here’s what I think we know.  As always, I’m open to enlightenment by anyone who reads these posts and wants to engage my argument. I’m not contrarian for its own sake. My job is simply to help transit agencies make clear decisions whose consequences they understand.

The context for this thinking is pre-automation, so labor cost is a dominant issue.  The question is whether transit agencies should subsidize microtransit, which implies that microtransit is in direct competition for funds with other possible transit agency investments. Thus, the question is about the public interest and benefits to the taxpayer.

Microtransit May Be a Slogan, Not an Idea

As I explored here, microtransit seems to consist of:

  • flexible “on-demand” routing, an idea that transit agencies have known about, and experimented with, for decades.
  • subsidies of privately provided services by a transit agency, which has been happening for decades under a range of contracting arrangements.
  • the use of apps for hailing, navigation, and payment.

Only the last of these is new, but there’s reason to doubt that the apps, by themselves, create a radically new business model. (Evidence that they do could include Uber being more profitable than non-cartel taxis were, controlling for labor costs.)  In any case, the statement “transit agencies should consider microtransit” can be translated as:  “Transit agencies should use apps to improve the efficiency and customer experience of their flex-route services.” Put that way, it’s uncontroversial and hardly justifies all the hype.

Watch the Ratio of Drivers to Passengers

In transit, before automation, operating cost is mostly labor.  Even if you race to the bottom on labor costs, as Uber has done, you won’t save more than 50% off of transit’s big bus operating cost.  You still need one driver for every vehicle.  That’s why passenger transport services, unlike Amazon, don’t become much more efficient as they get bigger.

That means efficiency in transit is the ratio of passengers to drivers.  Microtransit, by definition, is a low-capacity service, carrying small numbers of people at a time.  This is, by definition, a way to serve very few people at very high cost, compared to fixed routes.

And as soon as we talk about transit agencies funding microtransit, we are saying that they should do this instead of adding fixed route services that are proven to attract vastly more riders and serve them vastly more efficiently (see table in this post.).

Do Not Confuse Customer Experience with Financial Viability

A common rookie investing mistake is to buy a company’s stock solely because you love its product. Successful ventures don’t just provide a good product or customer experience. They do it in a way that’s financially viable. In the private sector that’s measured in profit. In the public sector the equivalent idea is some kind of cost/benefit or “bang for buck” ratio.  Microtransit’s performance on those measures is generally worse than terrible, just as the performance of flexible-route services has always been.  Talking about microtransit’s superior “customer experience” doesn’t change that fact.

For example, a recent Eno Foundation report promoting microtransit cited two pilots that achieved less than 1 (one) passenger trip per vehicle service hour.  A decent fixed route bus does 20-100 and most terrible fixed routes do at least 10.  The most upbeat data Eno’s report could find was a microtransit pilot in Newark, California that achieves 3 passengers/hour, but this is down from 7 passengers/hour on the fixed route it replaced.  The transit agency lost 20% of the old route’s ridership when it made this change.  And that is the most hopeful data point that microtransit boosters can cite.

Microtransit’s Poor Performance is a Mathematical Fact, not Question of Technology, Social Science, or Marketing

Transit agencies not only have decades of experience with low-performing flexible route experiments.  There’s also a purely geometric argument for why fixed routes perform so much better in almost all cases.  It’s about the way the customer’s walk to a fixed route stop allows the bus to operate on a straighter path that’s more likely to be useful to more people.  The correlation between fixed route performance and the straightness of the route is very strong.  Microtransit is meandering by definition, as it has to roam a large area and pick up people who are not in any kind of linear path. Technology never changes geometry.

Microtransit is Not a Way to Increase Ridership Overall

Because of its low productivity, transit agency funding of arises from a coverage goal, which is the opposite of a ridership goal.  Coverage means “predictably low ridership service run for a non-ridership reason,” typically access to places where the built environment makes high-ridership service impossible.  The microtransit boosters assume that agencies must run lots of coverage service but this is actually an issue that should be debated; many agencies I’ve worked with have shifted their priorities the other way.

This also means it is incoherent to cite a desire for higher total ridership, or disappointment with declining ridership, as a reason to invest in microtransit.  If you want higher ridership, you invest in services that are physically capable of carrying lots of riders and have a proven ability to attract them when run at sufficient quality, like big-bus fixed routes.  Microtransit is about taking both funds and political attention away from the services that are actually relevant to ridership at a large scale.

I Cannot Reconcile Microtransit with Economic Equality or Environmental Justice Goals

On average, microtransit seems to trigger an upward redistribution of the benefits of public subsidy. This is a Very Bad Thing for the public sector.  It is not hard to make some low-income or social service advocates like a microtransit idea from the customer perspective, and see it as liberating for their clients, but if it isn’t financially viable at a large scale, it won’t matter to the vast majority of disadvantaged people.

If a transit agency invests in a microtransit service hour for 3 people instead of a fixed route service hour for 30 people, solely to give those 3 people a better “customer experience,” we must ask “why are these 3 people so special?”  Why shouldn’t they pay the full cost of their superior customer experience, rather than expecting the taxpayer to subsidize it?  More on this line of thought here.

Unlike private businesses, U.S. transit agencies operate under intense scrutiny about equity outcomes. Civil rights and environmental justice tests are much more extensive for transit agencies than to the private sector, largely because they are conditions of Federal funding that these agencies rely on.  We have not begun to see the blowback against microtransit from environmental justice and civil rights perspectives, but if fixed routes are neglected to fund microtransit investments, the math is potentially there to justify it.

The Popularity of Microtransit Has Explanations Unrelated to its Value

The microtransit movement, like so many fads that have blown over transit agencies during my 25-year career, appears to be an example of elite projection, the tendency of fortunate people to assume that whatever they personally like will be good for society as a whole.  An urban elite has seen their lives transformed by ride-hailing services, and understandably wants to believe that this transformation can be brought to transit too.  This helps to explain why so much talk of microtransit is so dreamy, so obviously stated in the tone of a sales pitch rather than an analysis.  To think clearly in this context, you need to lean into the wind, being skeptical but not cynical about ideas that obviously serve someone’s commercial interest.

The Talk about Microtransit May Be Doing Harm

Fixed routes are spectacularly cost-effective investments compared to almost any flex-route option.  They even do better in cases (as in Newark, California above) where the geography is very unfavorable to fixed route success.  The reasons for this are geometric, as described above, so technology won’t change them.

Recent declines in bus ridership are triggering all kinds of triumphalist claims from people who want to sweep fixed routes away, or at least shift resources away from them as the microtransit movement proposes.  Much of this chatter is intended to push transit experts out of the discussion by implying that their expertise is obsolete.  The rigidity of fixed routes, the chatter suggests, arises from rigid minds.

But the neglect of fixed routes, encouraged at the highest levels, is the real source of transit’s declining relevance.  My firm works in cities all over the US, and most of them have appallingly low levels of fixed route service compared to potential demand. In most American cities, the quantity of service is growing far slower than population, which means that on average, the availability and usefulness of transit is getting worse.  Most cities, in short, are forcing low-income people to buy cars by making that the only way to have a life, even in places where fixed route service could succeed.  

In this reality, should transit agencies really focus on ways to move tiny numbers of people more expensively, to deliver them a special “customer experience”, as the microtransit idea proposes?  Clearly that’s not the path to ridership.

Meanwhile, cities that are forcefully recommitting to fixed routes are bucking the trend of falling ridership, and these show a clear path.  Ridership is up in Seattle, despite all the countervailing trends, because of an unusually high commitment to quality service and to protecting fixed routes from congestion — a commitment shared by the transit agency and the City of Seattle.  Houston continues to do far better than its Texas peers, partly due to the 2015 network redesign that expanded the bus network’s usefulness.

We know how to increase ridership. It’s by offering useful, civilized, and cost-effective mobility to large numbers of people, not obsessing about the customer experience of a few.  And while ridership is not the only goal of transit, it’s hard to get to microtransit from any of transit’s other common goals either.

If You’re Going to Comment …

I would love to see comments engaging my argument.  I’m not especially interested in comments that ignore my argument, or change the subject, or give me dreamy visions of a future where laws of math have been repealed,  or lecture me about how I represent tired old thinking. If you’re going to challenge me on a point where I’ve linked to another article, follow that link and read that article, because the meat of that argument may be there.

Thanks for your help making me smarter about this.  I advise a lot of transit agencies, and I want to best for them and the cities they serve.

 

 

Is Microtransit a Sensible Transit Investment?

It’s “microtransit week” at Human Transit.  Last weekend I asked if microtransit is a new idea and whether this matters.  I’ve also explored the question of whether apps transform the economics of transport in a fundamental way, which is an important part of the microtransit conversation.

Today, I attempt to put microtransit in the context of the goals that usually motivate transit agencies.  This is all part of my attempt to figure out what advice I should be giving transit agencies, all of whom are being encouraged to do microtransit pilots.  Your comments will affect how I think about this, and what I advise transit agencies to do on this issue.  

 

What is a transit agency trying to do?  What goals animate its activity and justify its use of public funds?  In my career I’ve watched many planning processes that seemed to dodge those questions.  Over and over, I watched people try to define goals backward from projects (“what goal will make this cool thing I want look like a good idea?”) rather than forward from things that taxpayers and citizens actually care about.  My book Human Transit grew from that problem.

So let’s try working forward from typical transit goals, and see where we end up on the microtransit question.

Sorting Out Goals

Transit is expected to do many things. These things generally fall into one of two opposite groups of goals.

  • Ridership goals are met when a transit agency achieves maximum ridership for its budget.  Ridership goals include emissions reduction, congestion relief, reduced subsidy per passenger, support for dense urban redevelopment.  Ridership goals also mean that the transit agency is offering useful and liberating service to the greatest possible number of people.
  • Coverage goals are met when a transit agency meets people’s needs or expectations even though low ridership is the predictable result.  Coverage goals include social service goals that assess people based on how badly they need something rather than how many of them there are. Coverage goals include political equity — the desire that every electoral district or municipality gets a little something.  Finally, coverage goals can be associated with agendas of upward redistribution: Intentionally low-ridership service may be run because people who benefit have the influence to force the transit agency to do it.

The goals fall into these two categories because the kind of network you’d run is totally different in the two cases.  If you want ridership, you run big buses and trains offering frequent services in places with high demand.  If you want coverage, you spread service out so that everyone gets a little bit, even though it’s much less attractive.  I explain why this is in more detail here. My original Journal of Transport Geography paper introducing the ridership coverage tradeoff is here.

In my work with transit agencies, I encourage them to be conscious of which kinds of goal they are pursuing.  I advise transit agency boards to adopt a clear policy about how their operating budget should be divided between these goals.  For example, our much-discussed Houston redesign began with a Board decision to shift the agency’s priorities from 55% ridership to 80% ridership, which meant cutting their investment in coverage from 45% of their budget to 20%.

Note the reality I’m working in here:  Transit agencies have limited budgets.  I often hear dreamy talk about how microtransit isn’t in competition with fixed routes.  “It’s not an either-or,” people say.  “They can all work together.”  Well, they may not be competing for customers, but they are competing for funds.  When a transit agency invests in microtransit subsidies, it is doing this instead of running more fixed route service.  That’s the frame in which we must understand these microtransit proposals, at least the proposals being put forward now.

Microtransit is a Coverage Tool, not a Ridership Tool

In that context, microtransit is another way of providing coverage service.  Look at the numbers:

Service Type Typical Passenger trips/service hour
Urban subway >200
Urban light rail >100
Urban frequent bus 40-100
Ridership-justified suburban bus 15-40
Coverage-justified suburban bus 10-15
General Public Dial-a-Ride 0-3
Microtransit Pilots to Date 0-3
Paratransit (senior-disabled) 0-2

The “service hour” is a unit of operating cost.  We measure transit by the hour, not by the mile, because pre-automation transit operating costs are mostly labor.  So this table corresponds roughly to “bang for buck” for public investment.  (Can you make labor cheaper pre-automation?  Read on.)

The last four rows in this table are services that would not exist if the only goal were ridership.  (Paratransit would be provided only as required by law, not in excess of that.)  If you run those services, it can only be for a coverage goal, where low ridership is the expectation.

So, it is absurd to claim that investing in microtransit is a way to combat declining transit ridership.  In any transit agency, there is a place where an hour of fixed route bus service could attract 10-100 times as many passengers than an hour of microtransit could do.  If you want ridership, you’ll invest more in that bus service, not in microtransit or any other low-ridership service.

Comparing Microtransit to Dismal Fixed Routes

Now, suppose we do have a coverage goal.  We’re talking about a low-density, unwalkable suburban area where ridership expectations are low for whatever service we might offer.  If the goal were ridership we wouldn’t serve this area at all.

In most agencies, the worst-performing suburban fixed routes typically pick up about 10 people for every hour a bus operates. Even in the context of coverage goals, those routes are hard to defend.

So given a coverage goal, which is the opposite of a ridership goal, the thought process for whether to invest in microtransit might look like this.

Let’s start at the top.

Flexible routing is always inefficient compared to fixed routes.  You don’t really need data, although there’s plenty, to understand this geometric point.

On a fixed route, passengers gather a bus stop, so that the bus can run in a reasonably straight line that many people will find reasonably direct. This saves the bus and driver time, so the bus can get to more potential passengers, and take them to more useful destinations, in each hour it operates..

On flexible service — including microtransit — the transit vehicle meanders to serve various points where people have requested it.  This inevitably leads to more driving for fewer customers than a fixed route.

There is simply no way that a flexible-route service is going to pick up 10 people per hour of operation in a low-density suburban setting.  Maybe you can do it in the middle of San Francisco, but that’s not what we’re talking about here.  The places where fixed route buses do only 10 boardings/hour usually have low density, long average distances, and circuitous street patterns, all of which are bad for demand-responsive service too.

So if it’s anywhere near the 10 boardings/hour of a dismal fixed route, it’s a fixed route.  (There are exceptions that prove the rule.  Some “deviated fixed routes” are almost entirely fixed except for a few flexible segments.  Where these are productive, it always turns out that the fixed portion of the route is the source of the productivity.)

So even if your goal is coverage, why would you run microtransit instead of a fixed route? Since microtransit is reliably worse than fixed routes in passengers per service hour, what other kind of efficiency would make up for that, and make this viable?

The flowchart shows the three possible answers:

  • Reduce labor cost.  Forget “savings from smaller vehicles.”  Operating cost is mostly labor.  TNCs have certainly plumbed the depths of driver compensation, which lead, of course, to increased economic inequality and thence to a host of other ills.  (You also, to a large degree, get what you pay for in terms of professional skill.)  But even if those impacts are OK with you, there’s just not that much here.  Suppose you cut labor costs 50% from typical transit pay scales, which is the very bottom.  Now, to match a fixed route doing 10 boardings/hour, you need to do 5 boardings/hour, still far higher than what we’re seeing in any microtransit pilots.  (And even all you do is match the performance of a terrible fixed route, what have you acheived?)
  • Higher Fares. Of course microtransit can run on its own in a for-profit model, along the lines of UberPool. In addition, it’s possible for transit agency subsidies to reduce microtransit fares somewhat below usual TNC levels without bringing them down to anywhere near transit fares; this is being tried in some places.  But this can also be a dramatic upward redistribution: more subsidy is going to people who can likely afford TNC fares anyway.  There are also possibilities to subsidize TNCs for disadvantaged persons, but transit agencies have limited room (practically and legally) to discriminate in these ways.  Those kinds of subsidies would better come out of social service agencies.
  • “Improving Customer Experience”  Who can argue with that?  But the question is: Whose experience, at whose expense?  If transit agencies spend more money to serve fewer people, as microtransit requires, in order to give those fewer people an improved customer experience, well, why are those people so special?  “Improved customer experience” sounds great, but transit agencies are in the mass transit business, so their customer service improvements need to scale to benefit large numbers of people. If they benefit only a fortunate few, this is pretty much the definition of upward distribution of the benefits of public spending, and hence increased economic inequality.  (It can also expose transit agencies to all kinds of civil rights and environmental justice challenges, both political and legal.)  In short, the “customer experience” talk seems to boil down to elite projection.

All this time, I’ve been talking pre-automation.  Does automation, whenever it’s really ready, blow all this away?  Yes, you can erase the “increased economic inequality” box from the chart, but the “increased VMT” is still there.  Because as always, if we’re putting people in more small vehicles instead of fewer large ones, we’re increasing Vehicle Miles Travelled, which means we’re increasing congestion and seizing more street space for the use of motor vehicles.  Suburbs may be fine with that, but most big cities are not.  There isn’t room.

So Why Would a Transit Agency Invest in a Microtransit Pilot?

Transit agencies sometimes do things that make no sense to transit professionals, because the elected officials at the top order them to do it. Right now, everyone’s talking about microtransit, so of course many elected officials are talking about it.

But in my experience working with countless elected boards and officials, it’s usually possible to steer those impulses into a conversation about goals.  “When you say you want this new thing, what outcome are you really after?  Are you sure this thing really does that?  Have you thought through what the side effects are?”  I’ve been having these conversations, about all kinds of cool-ideas-of-the-moment, for a quarter century.

At this point, I cannot come up with a logical argument from any of the commonly-cited goals of transit to the idea of investing in microtransit pilots with transit agency funds. Even if the goal is low-ridership coverage, there are vanishingly few situations where flexible routing improves on the productivity of fixed routes alone.  Meanwhile, all paths in my logic lead to outcomes that most urban leaders will find bad:  Increase economic inequality, both through lower wages and through the upward redistribution of benefits, and increased vehicle miles traveled.  And even if you accepted those impacts, the math just doesn’t work.

(What should transit agencies do instead?  Well, if the problem is ridership, look at places where ridership isn’t falling, like Seattle and Houston.  Those are cities that are aggressively improving their  fixed route bus systems.)

That’s a provisional opinion, which is to say that it’s a really a question.  What have I missed?  But please, if you’re going to comment, engage with this argument.  I have heard all the beautiful stories about microtransit.  What I can’t figure out are the numbers.

The last “microtransit week” post, summing up what I think we know on the subject, is here.

 

Does it Matter if Microtransit is a New Idea?

It’s “microtransit ” week at Human Transit, but this post is not the place to start.  If you want the full exploration of microtransit’s impacts, which are not all wonderful, start here. If you’re curious about whether microtransit is a new idea (it doesn’t seem to be) start here.

On Friday, I asked if “microtransit” is really a new idea.  I asked that because a public relations campaign telling us that it is a new idea has reached every corner of the transit world, and clients of mine on several continents are wondering how to “respond” to this “innovation.”  You’ll want to read that short post before this one.

Many responses raised themes that I’ll get to in other posts this week. (Some are comments on my post, while many others are in this Twitter thread).  A leading academic in the field wrote this:

(I don’t follow Shaheen’s claim that “supportive public-private partnerships” are a new idea. Transit agencies have long been paying private companies to provide some of their services, in a great diversity of contracting arrangements. Microtransit proposals seem to be just another example of this. This, not jitneys, is the relevant history.)

So the main new thing seems to be the IT: the apps that take care of hailing, navigation, and payment.

And in that case, the statement that transit agencies should fund microtransit is equivalent to saying that they should upgrade the old idea of flexible-route services to include the use of IT. And if that were all there were to it, then it would certainly not need a brand name like “microtransit,” let alone this massive public relations campaign.

(Does the IT utterly change the economics of transit to the point that the result is something new?  I mean not just new and great for the customer, which it clearly is, but transformative to the cost of providing service and thus to what kind of service is practical? I’m still looking for evidence for that. For more, see here.)

The respected Eno Foundation has chosen to be a key booster of microtransit, notably in this report and in a recent article in a major newsmagazine. Eno’s Greg Rogers suggested to me that we shouldn’t care whether the idea is new:

I disagree.  To call a transit idea new, or an “innovation,” is to imply that the idea has no history, and that experienced transit professionals knew nothing about it until the innovation came along. This discourages people from asking experienced transit planners about it. It’s a very effective way of excluding a lot of expertise from the conversation.

So yes, we must think about “microtransit” in the context of the public relations campaigns that are promoting it as a “new” idea.  If we’re going to think about the public interest rather than the interest of the technology vendors, it is entirely appropriate to be skeptical (not cynical) about ideas that seem to be prevailing mainly through repetition. In other words, we must lean into the wind.

Skepticism (unlike cynicism) is a position of curiosity.  I am not arguing against microtransit, but I want to understand the idea well enough to advise my transit agency clients about it.  For that reason, I’m looking for arguments for it — and for its newness — that stand up to reasonable scrutiny.  And I’m still looking.

 

NOTE:  The next microtransit post, exploring whether it is a logical solution to actual transit agency goals, is here.

Is Microtransit an Actual Idea?

It’s “Microtransit” Week at Human Transit.  This is the first in a series of posts in which I’ll be seeking a coherent explanation of the universally-hyped notion that “microtransit” has some relevance to the public transit challenge. Start here.

Transit agencies everywhere are being told to prepare for “the Coming Age of Microtransit.”  Enormous effort is going into spreading the idea that microtransit is a potentially transformative invention that transit agencies need to know about, and potentially include in their offerings.

As someone who advises transit agencies on service planning and policy, I am having trouble making sense of this and I need the help of people who understand it better than I do.

Here’s how microtransit is described in the recent Eno Foundation report.

In the United States, public transportation agencies are experimenting with on-demand, shared, and dynamic models to augment traditional fixed-route bus and train services. These services—referred to as microtransit— are enabled by technology similar to the mobile smartphone applications pioneered by privately operated transportation network companies.

And here’s the US Department of Transportation definition, quoted in the report above:

a privately owned and operated shared transportation system that can offer fixed routes and schedules, as well as flexible routes and on-demand scheduling. The vehicles generally include vans and buses.

These definitions boil down to three key ideas:

  1. Service whose routing changes in response to demands or requests, as opposed to fixed routes where the path of the vehicle is fixed in advance. This is the usual meaning of “flexible” or “demand-responsive.”
  2. Private sector role in providing service, but with taxpayer subsidy.  This is implied by the idea that these should be transit agency initiatives instead of things that private businesses just do for profit.
  3. Use of mobile smartphone applications for hailing, paying, and navigating, rather than the old system of ordering rides by phone. This also offers the potential of offering rides on shorter notice than before.

So my first question is:  Is that it?

Because if that’s all it is, then the next question is: Is microtransit an idea at all? 

Consider the definition elements above:

  1. Flexible routing instead of fixed routing is a very old idea.  It’s routine in the lower-wage developing world, but even in the US, many transit agencies have run service of this type for decades.  I personally was planning many kinds of demand-responsive service (from pure Dial-a-Ride to deviated fixed route) 25 years ago. This 2004 TCRP report synthesizes decades of experience on the topic.
  2. Private sector operation of transit, under contract with government, is a very old idea.  North American agencies routinely contract with the private sector to provide some services, especially smaller-vehicle services, and have done so for decades. There are many established companies specializing in this kind of work, and new technology companies are welcome to compete with them.
  3. Use of apps.  Is this the only new thing?

If so, then the claim that transit agencies need to investigate microtransit would be logically equivalent to this statement:

Transit agencies should upgrade their toolbox of demand-responsive service to use smartphone technology for hailing, navigation, and payment.

And most of the best transit agencies are already working on that.

Please help me out with a comment.  And please: Don’t just switch to some other angle for describing how cool microtransit is.  Address my actual logic above, and explain exactly what I’m missing.  Thanks!

I got some answers, which I discuss in the next posts in this series.

Maybe Apps Are Not Transforming the Urban Transport Business

Revised February 19, 2018, based on excellent comments.

We’ve all heard that the most important transportation innovation of the century is the smartphone.  Who can doubt that apps for ride-hailing, navigation, and payment are making it easier to use shared transportation services, whether buses or Uber/Lyft or anything in between?   How can anyone who remembers waving helplessly at rushing taxis, or wondering when the bus would come, possibly doubt that this transformation has fundamentally changed all the products it touches?

From a customer’s point of view, I don’t doubt any of these things.  Apps have transformed the customer experience totally.  But that says nothing about whether they’ve transformed the bottom line of the provider.

Len Sherman has a nice short piece in Forbes explaining why Uber can’t make money.  Key quote:

The taxi industry that Uber is seeking to disrupt was never profitable when allowed to expand in unregulated markets, reflecting the industry’s low barriers to entry, high variable costs, low economies of scale and intense price competition — and Uber’s current business model doesn’t fundamentally change these structural industry characteristics.

Standard Uber/Lyft ride-hailing service is made of two main ingredients:

  • Taxi service, minus the protectionist regulations that kept some taxi fares artificially high.
  • An app that expedites hailing a taxi and paying the fare.

The relationship with drivers is also a difference, but not as much as it may seem. Uber and Lyft let drivers use their own cars, but many taxis are driver-owned as well.  Both Uber/Lyft and taxis pay the driver based on fares, not based on hours worked.

So really, the big difference is the app.

The app has transformed customer experience — by taking the friction out of the hailing, routing, and paying — but it doesn’t seem to be transforming the fundamental nature of the task, or its potential to be profitable.

That’s because transportation happens in physical space.  The dominant element of cost is the time it takes to drive someone to their destination, and to travel empty between jobs. The app does nothing to change this.  At most, Uber and Lyft have turned their efficiencies into fares slightly lower than taxis, due to intense competition between them.

If ride-hailing companies had the potential to be profitable — short of creating the same monopoly for them that taxis used to have — someone surely would have done it by now.  But Sherman notes:

Every major ridesharing company in the world is still experiencing steep losses after five or more years of operation, including Lyft (U.S.), Ola (India), 99 (Brazil), and Didi Chuxing (China).

We are seeing the same thing on the microtransit side.  So far, microtransit is doing no better than demand-responsive transit has always done, generally worse than 3 passenger trips per driver hour, compared to 10 for the typical outer suburban fixed and 20-100 for fixed routes in dense and walkable places.  In fact, the most widely promoted recent experiment, the Bridj pilot in Kansas City, did not reach 1 passenger / hour and managed to spend about $1000 per passenger trip,[2] compared to less than $5 for a decent fixed route.

This gap is too vast to be a marketing problem or something that can be solved by tinkering.  It’s a fact about the intrinsic spatial inefficiency of demand-responsive service, which has little to do with the communications tools used.

It’s time to notice a pattern:  Tech boosters treat solutions to a communication problem as though they were solutions to a spatial problem.

Certainly, communicating via telephone calls was part of the inefficiency of taxis, but if the smartphone app were enough to make taxis profitable, we’d be seeing the results by now.  Likewise, it’s great that apps are improving the communications side of demand-responsive transit, but so far, there’s no sign that this is making a difference on the bottom line.

Remember: Urban transportation is a spatial problem, and (until automation) a problem of the efficient use of labor.  If you’re going to transform it, you have to transform those things. Nothing about the standard Uber/Lyft product, or “microtransit,” is touching those fundamentals.

So have apps transformed the customer experience of urban transport?  Yes!  Have they transformed the urban transport business?  Maybe not so much.

 

 

 

[1]  There is a vast range of hybrids between a fixed route and a fully “to your door” demand-responsive service, all of which are very old ideas.  I was designing and revising these 25 years ago.  Everything that’s known about the math of that problem was well understood back then by the people doing it.

[2] This appalling number is from Eno Center’s report “UpRouted: Exploring Microtransit in the United States,” p.7, which is generally upbeat about microtransit prospects.   More commentary on this report soon.

The Financial Times Interview of Me

Izabella Kaminsky at the Financial Times Alphaville blog did an interview with me two weeks ago that was meant to be a podcast. We covered a lot of ground, including microtransit, Uber, Elon Musk, Big Data, and elite projection.

The audio didn’t work for the podcast, so they just printed the transcript.  (Sometimes it makes you register for free.)

I find it agonizing to read in print, because things that make sense in speech look terrible on the page, stripped of all the inflections and pauses that give spoken text its meaning.

Lots of people seem to be enjoying it, though.  And if a desire to laugh at my run-on sentences will make you read it, that’s on balance a good thing. It’s here.

On the Limits of Ridesourcing and Microtransit PR: the Video

Untitled

The “end of fixed transit” narratives coming out of the tech industry (and sometimes also from architects and visionaries) are an increasing problem for dense cities, where, as I argued here, the primary need is to provide movement and liberty for vast numbers of people in very little space.  Even where ridership is moderate, replacing big vehicles with little ones can only mean more vehicle trips, with all of their congestion and environmental impacts, and if little vehicles are made more cost-effective in labor terms (prior to automation) then this can only be because of a race to the bottom on driver compensation.

The key fact to remember: even that low-ridership suburban bus line that looks empty all the time is probably doing at least 10 riders / service hour (that is, per hour that one transit vehicle is running).  No  ‘door to door’ service can possibly match this; you are not going to take 10 people to their individual doors in an hour, especially if they live as far apart as they usually do in the suburbs.  Ten boardings per hour is a dreadful performance for a fixed route and almost unimaginably high for anything demand-responsive to achieve.

So the only way for a low-productivity service (riders/service hour) to outcompete big buses is through a race to the bottom on wages and compensation, which has consequences for both service quality and for the larger society.

The most urgent thing transit agencies need to do, right now, is start talking more confidently about what their fixed-route, high-ridership transit service is achieving, so that they negotiate with the new players from a position of strength and confidence.

More on this soon, but meanwhile there’s a video.  It’s from a presentation I did to the Board of Capital Metro, the Austin area transit agency, last month.  It’s here, but you need to select “VIII, 1” on the fifth row on the right, to get to the right spot.  The presentation is about 40 minutes, and it ranges across many themes, but always comes back to the spatial geometry issue.

Good Article on My Talk on Microtransit …

amon-logo-headerCaleb Pritchard at the Austin Monitor did a very clear writeup on my new talk on the impacts of microtransit (Bridj etc.) and ridesourcing (Lyft, Uber etc.) on public transit.  In it, I push back hard on the notion that these services have any potential to “disrupt” public transit in any meaningful way, though there are potential synergies around the edges of transit’s mission.

Here’s the most important paragraph:

“There’s an enormous amount of public relations noise coming out of the tech industry, and most of it is directed towards people who don’t understand transit very well,” Walker said. “And transit leaders like yourselves really have to be able to confront that and say, ‘No. The fixed-route service, especially frequent fixed-route service, is doing something incredible that no tech innovators are doing or show any signs of doing.’”

Read the whole thing.

Microtransit: good or bad for cities?

Read Eric Jaffe’s piece today on the effect of microtransit (UberPool, LyftLine, Bridj, Leap) on our cities.

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.