Several municipalities are launching public transportation deals with Lyft, Uber and others. They are opting to augment public transportation with ride-hailing companies because of challenges like expensive routes with low ridership and public transit gaps in underserved areas.
In less dense suburban areas with fewer riders, public transportation routes can be expensive, making ride hailing an attractive alternative, Adie Tomer, a Brookings Institution’s Metropolitan Policy Program fellow recently told Bloomberg News.
If they can provide better outcomes for your population and do it at either the same cost if not lower, that’s a win-win for society…This could start spiraling very fast,” said Tomer.
Lyft is targeting the municipal transportation marketplace and has a few projects in place. “This is an area that has the potential to be a very significant part of Lyft’s work in the future,” Emily Castor, Lyft director of transportation policy, told Bloomberg News. Lyft has supported a number of transit agencies applying for federal grants to subsidize its fares, she said.
In Castor’s public slideshare, ride-hailing companies can increase mobility and support public transportation with:
- First mile/last mile gaps
- Peak shaving opportunities
- Car-free residents
- Underserved populations
- Cities are looking for ways to meet climate objectives.
- Governments are exploring affordable transportation alternatives.
- Municipal planners want Lyft’s data on demand patterns and density.
While Uber and Lyft continue to compete with each other in many aspects of transportation, Uber also serves municipal governments to augment public transportation. The following examples highlight some notable public transportation pilot projects leveraging both companies.
Centennial, Colo., Tests Replacing Shuttle-to-Rail with Lyft
Lyft launched a partnership with the city of Centennial, a suburb of Denver, in its first deal where a local government will subsidize rides with public funds.
Centennial will pay for Lyft rides to and from the Dry Creek RTD Light Rail Station for an area of town limited to shuttle bus service for connection to the regional rail stop.
The shuttle bus service costs the city about $20 per ride, according to Bloomberg News. Centennial set aside funds to handle 280 rides per day–about six times as many rides as it currently handles through the shuttle–as the pilot was announced in August. It’s possible that larger demand may cause the city’s budget for the six-month pilot to run out before time is up.
Centennial residents in the targeted service area can summon the free Lyft rides on the Lyft app or on the mobile Go Denver platform.
Pinellas County, Fla., Augments Public Transportation with Uber
The Pinellas Suncoast Transit Authority started sharing the cost of Uber rides for two former bus routes serving the dense Pinellas Park community. Residents receive a 50 percent discount for rides, up to $3 per ride, to connect them to the existing public transportation system.
It’s cheaper than running those buses, according to the authority. It costs $40,000 a year, about 25 percent of the cost of the two former routes. Next, to further augment public transportation, the authority began offering subsidies for all rides that end at about 20 designated transit stops in the county. And, it now fully subsidizes Uber rides to low-income residents traveling after 9 p.m., when county buses stop running.
Because the partnership has been a success, the authority applied for and received a $500,000 federal grant to expand service to paratransit riders. With the grant, the authority will develop central dispatch software for on-demand paratransit. Riders will be able to select transportation service providers.
Summit, N.J., Pilots Parking Solution with Uber
The city of Summit has partnered with Uber to subsidize rides in order to solve parking congestion at its train station. The deal was to save taxpayers $5 million across 20 years–the estimated cost of building a new parking lot at the station, according to CNN.
It’s the first public-private transportation partnership with a ride-hailing company to address parking, said Summit Mayor Nora Radest. The pilot program will serve 100 Summit residents for six months. They were invited to apply on the city’s website earlier this month.
Learn more about the risks and opportunities of making public transportation deals with the ride-hailing companies: