How cities can user Uber, bikeshare, and carshare to supplement trains and buses.

Is Uber Killing the Public Bus—or Helping It?

Is Uber Killing the Public Bus—or Helping It?

Moneybox
A blog about business and economics.
Sept. 12 2016 12:57 PM

Is Uber Killing the Public Bus, or Helping It?

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Cities' biggest negotiating tool isn't regulation. It's precious street space.

Flickr/Joiseyshowaa

This time last year, it was easy to poke fun at Uber when it announced a “bold experiment”—shared cars running on fixed routes—that sounded suspiciously like a bus.

Henry Grabar Henry Grabar

Henry Grabar is a staff writer for Slate’s Moneybox.

Twelve months later, Uber has begun to replace the bus.

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It’s not that Americans are using rideshare services instead of buses, though that may be happening too—bus ridership has fallen in almost every major U.S. city over the past decade.

Rather, transit agencies have begun to collaborate with ride-hailing companies to replace low-ridership bus routes with subsidized cab services or otherwise supplement their coverage. Tesla CEO Elon Musk believes the end of fixed-route transit is nigh, and that smaller, autonomous shared “buses” will soon ferry passengers directly to their destinations.

For the millions of Americans who depend on transit services—and the millions more who could, if transit were more convenient—these public-private partnerships bring promise and risks. The risks include the swapping of well-paid, well-trained transit workers for poorly paid amateurs, and the possible stranding of the disabled, the poor, the distant, the unbanked, and the unphoned, who aren’t exactly about to become everyday users of Uber. (Reality check: Only 15 percent of Americans have ever used a ride-hailing app, according to a May report from Pew.)

The promise—moving more people more cheaply and quickly than ever before—is tantalizing enough to at least balance those concerns.

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A new report from the TransitCenter, a New York nonprofit that advocates for transit, cuts through both the Silicon Valley utopianism and the left-wing naysaying. No, ride-hailing (autonomous or otherwise) isn’t going to supplant mass transit anytime soon in the nation’s biggest and busiest cities. Yes, transit agencies can and should try to integrate new technologies to reinforce their strengths.

In places like Dublin, California, and Pinellas County, Florida, transit agencies have for years given heavy subsidies to sparsely ridden buses. As the report points out, subsidizing rideshare trips to replace those services is both cheaper (for the agencies) and more efficient (though not always cheaper) for riders. In an ideal world, this substitution would allow transit agencies to redirect that money to more heavily trafficked corridors. (In practice, those efficiencies may lead to smaller budgets.)

The report also suggests transit agencies work to streamline the user experience, for example, by integrating payment apps or facilitating (through open data policies) the development of multimodal trip planning software. And most importantly, the report tells transit agencies to leverage their assets in negotiating with more nimble rideshare companies. The public’s biggest asset, in this case, is control of the streets.

You can see a lot of reasons that rideshare has the upper hand in moving people: a low-paid, no-benefits workforce, access to troves of fine-grain user data, no procurement requirements, no obligation to offer service that doesn't pay off, and at the moment, at least, millions in subsidies to reduce fares and raise wages. (Uber subsidized U.S. operations to the tune of $100 million in the second quarter of this year.)

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So far, cities have used regulation as a stick to try to elicit concessions from rideshare companies. A more effective negotiating tool, as rideshare encroaches on transit’s people-moving power, might be a carrot: the use of street space.

Seattle, for example, has given Car2Go prime parking spots around the city in exchange for comprehensive coverage, even in neighborhoods that might not otherwise be ripe for expansion. If cities want rideshare companies to be constructive partners—in sharing data, subsidies, and the responsibility to help transport the poor and disabled—they have thousands of lanes and parking spaces at their disposal.

Since the trolley companies first sent tracks into speculative suburbs, cities have struggled with the “last-mile problem”: how to bring riders from transportation hubs to their homes. Now, a handful of emerging mobility technologies—bike share, car share, ride-hailing, digitally arranged carpooling—not only solve that problem, but do so at little cost to the public beyond what we already pay for suburban roads.

That is the dream.

In reality, of course, transportation-as-a-service will both create new users and try to compete for those that exist. Unlike transit agencies, private providers have no obligation to operate in poor, low-density areas, work with disabled residents, or keep fares stable. The task for cities is to find the bargaining chips—whether that amounts to looser regulations, data-sharing, or prime street access—to make sure they do so.