Microtransit

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:

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.

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.

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.

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.

Caleb 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.

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.