Improving Transit Through Lyft and Uber? More Agencies Are Paying for Ride-Hailing Rides

Transit agencies are increasingly partnering with ride-hailing companies to expand transportation options for residents, including by offering discounted rides home for late night workers or last-mile transportation to transit hubs.

But whether partnerships work has not always been easy to figure out. Pilot partnerships have gotten off the ground in cities ranging from Philadelphia to Monrovia, California—with Washington, D.C.’s transit agency becoming the latest to announce a program providing discounted rides to late-night workers. And while some local leaders say the experiments are successes, others say they don’t have the data necessary to fully assess the programs.

Yet transit experts don’t see the trend fading anytime soon, particularly in small municipalities.

“There is no evidence that the plight facing small town transit agencies has ended,” said Joseph Schwieterman, director of DePaul University’s Chaddick Institute for Metropolitan Development and author of a 2018 report on transit agency and ride-hailing partnerships. “The smaller metro areas where buses run infrequently face an uphill battle and upping ticket prices isn’t going to solve that.”

In Florida, a partnership between the Pinellas Suncoast Transit Authority and Uber has allowed the transit agency to supplement its core route bus service while keeping costs down, said senior planner Bonnie Epstein.

The PSTA offers both a ride-hailing partnership that provides discounted bus passes and $3 door-to-door rides for late night, low income workers, as well as a $5 ride-hail discount for first and last mile trips from 24 bus depots. The county doesn’t have the density or demand to expand bus services beyond current capacity, but growth in the hotel and hospitality industry means employees need ways to get to work during non-traditional hours, Epstein said.

Ridership in both programs has increased dramatically since the pilot program began in 2016, Epstein said.

In May, the low-income worker program provided approximately 2,800 rides at an average cost of $14.93. An estimated 335 people made more than 2,600 trips in May through the Direct Connect discount program, which offers discounts to any rider traveling between 6 a.m. and 11 p.m. The subsidies for both programs cost the transit agency a combined $52,000 that month.

“I think it is a winner for lots of reasons,” Epstein said. “It gives access to workers when we can’t provide it with fixed route service.”

The approach may sound like it pits public transit against private ride-hailing companies. But the partnerships often include restrictions on the time of day or areas that rides will be subsidized that do not put them in direct competition with transit agencies, said Bruce Schaller a public transit expert who has studied companies like Uber and Lyft.

“Really it’s a taxi service,” Schaller said. “They can serve a valuable purpose but there is nothing novel.”

In Washington, D.C., the Washington Metropolitan Area Transportation Administration this month became the latest agency to partner with a ride-hailing company to offer discounted rides home for late-night workers. WMATA, which runs the region’s subway and buses, will offer $3 subsidies to workers who take shared Lyft trips to and from work between the hours of midnight and 4 a.m.

Transit authorities said the program, which will run for a year or until its $1 million in funding runs out, was created to help late-night workers affected by limited overnight service.

“This program will provide late-night workers with a more affordable transportation option during overnight hours as we advance essential maintenance programs that improve safety and reliability,” said Metro General Manager and CEO Paul Wiedefeld at the outset of the program.

In Nashville, Lyft announced a similar promotional deal in June that will give up to 200 late-night bar and restaurant workers 50﹪ discounts on rides home from the city’s downtown corridor.

The Washington, D.C. program, which started July 1, could be helpful at tackling mobility issues at a low cost, Schwieterman said. The average cost to operate late-night bus routes is approximately $15 a passenger, making the $3-a-ride subsidy a small cost in comparison, he said.

What’s truly needed to understand whether these type of partnerships are worth it are more audits of ridership metrics and cost-benefit analysis, he said.

An audit of a partnership in the Denver, Colorado suburb of Centennial found the program did increase light rail ridership and could reduce costs for a regionally-operated call and ride service. The Go Centennial program offered free Lyft rides from within the city to its Dry Creek rail station, which connects with downtown Denver. During a six-month pilot program, 127 riders made 1,302 trips through the program.

The audit concluded that light rail ridership increased 11 percent at the station and could provide first and last mile service to and from thee station for far less than the program operated by the Regional Transportation District. The RTD service averaged a $18.54 subsidy per ride while the Go Centennial service cost an average of $4.70 per ride.

But transit agencies that have partnered with ride-hailing companies said it has at times been difficult to obtain the data needed to truly assess the success of the programs.

The Pinellas transit agency in Florida did not originally receive individual trip-level data from Uber but has since updated its contracts with the company to make sure it receives that information, Epstein said, adding that such data provides the county a way to verify how workers are using the service.

Lack of ridership data was one of the reasons the Southeastern Pennsylvania Transportation Authority did not renew a previous pilot program offering discounted Uber rides to subway stops in the Philadelphia suburbs, said SEPTA spokesman Andrew Busch.

“Uber wasn’t obligated to give us this, but we didn’t get any raw data from them on ridership they were seeing,” Busch said. “In order to think about something more long-term, we would probably need to see some data that would help us make a decision.”

While the SEPTA saw “some positive indications” from the partnership, the program ran during the summer of 2016 and coincided with rail work that hampered service and made it difficult to assess overall success, Busch said.

The transit agency would be open to revisiting the program so long as it was limited to suburban areas, Busch said.  

“We don’t think something like that would be a good fit for us in a congested area, like the center city of Philadelphia,” Busch said. “It’s not something we’ve closed the door on.”