Why Transit Should Pay Attention to Uber

Posted on November 15, 2013 by Brian Antolin

One of the biggest local transport innovations in recent years has been Uber, the technology company that created a platform for independent private sedans to connect with riders who want to travel. You can “hail” a car, track it in real time and pay for your ride using an app on your smart phone. Their rapid expansion from their inception in 2009, both domestically and internationally, has garnered loyal fans, competition from other transport companies and controversy over their operating practices.  

So why should transit operators care?

Although Uber doesn’t consider itself a transportation provider, they inadvertently implemented a 21st century solution to transit’s biggest problem today: adapting to new travel patterns and behaviors. The idea here is not to replicate Uber’s business model, but to apply its operating principles in meeting the public’s travel needs. In other words, transit organizations can utilize app-based logistics systems to create on-demand bus services.  

The goal is to create more opportunities to achieve profitable revenue service hours for transit vehicles. In major cities, transit organizations have to operate an unbalanced service plan to meet peak demand. They have high supply during the morning and evening, but have to scale back during off-peak hours.

To meet demand, organizations have to include non-revenue operating hours, off-duty employee hours and idle equipment hours. In less densely populated areas, transit organizations are only able to operate limited schedules because of their resources, thus reducing the likelihood of public patronage. These underutilized resources contribute to a higher cost per operating hour, thus driving up the level of subsidy needed to fund the service. By creating and implementing a better way to scale and meet demand at all hours, organizations will be able to induce more riders to travel, increase bottom line revenue and decrease reliance on subsidies.

Technology alone is not the answer, as the equipment used is equally important. Not all services or areas require a fixed route or high capacity buses. In many cases, an on-demand service using smaller buses or vans can drive more people to transit because they can access a wider array of city, suburban, and rural streets. With this model, service managers can reallocate drivers and vehicles to where people are in real time, thereby creating more passenger trips. Furthermore, they can reduce potential dead-mile costs in positioning by optimally routing vehicles to transport passengers in moving in the direction of the “hot spot.”

The on-demand service model is not new or far-fetched. Many paratransit operations manage reservation-based door-to-door services, including Access-A-Ride in New York City, CCT Connect in Philadelphia and SF Paratransit in San Francisco. These services generally use a mix of mini buses, vans and cars to transport these riders, a model which could also fit an on-demand general public operation.

Other organizations, such as the Denver Regional Transportation District (RTD), already operate flex-route services. Denver’s Call-n-Ride service uses mini buses or vans operating on a fixed route that will divert to areas within a certain radius away from the route by advanced reservation.  

Should transit organizations give up on high-capacity buses and fixed-route service? Of course not, as each has its own use and need. The best solution is a mix of both fixed-route and on-demand service, similar to what RTD Denver currently has. On-demand transit services managed through a mix of app, text, phone and/or Web-based interfaces makes transit more accessible. Even more important, this service model allows transit operators to better react to real-time changes in passenger demand.

By synergizing available resources to where and when they are needed, transit organizations have an opportunity to increase revenue and decrease costs. Meeting ridership demand today means being creative in how service is offered and delivered. This is a good first step toward that.

In case you missed it...

Read our METRO blog, "'Leadership Circle' Brings Together Transportation, Tech Visionaires."

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