Transportation may be the most misunderstood of society’s essential systems and services. Sometimes, I think of it as a house with its various complexities — electrical, gas, plumbing, roofing, foundation, airflow, lighting, and temperature control. Sometimes transportation seems like the community vascular system, connecting everything and everybody. But regardless of the metaphor, transportation is more complicated than we who use it every day imagine. It needs systems for communication, fuel, mechanical movement, labor, management, storage, logistics, maintenance, governance, and above all, the resources necessary to pay for everything.
In the almost 30 years I have been working on ITNAmerica, a national nonprofit transportation solution for older people and those with special needs. I have rarely met anyone in public transportation not deeply committed, over worked, under resourced, and too often also unappreciated. Through no fault of their own, consumers of public transportation are like people who go into a restaurant, order a fine meal from the menu, and enjoy what the waiter or waitress places on the table. The whole process seems simple — read the menu, select, consume. There may be something going on in the kitchen, though it is generally a blur. But as anyone who has ever worked in the restaurant industry will tell you, it’s infinitely more than that.
Of all the systems necessary to put a transportation meal on the table for the American mobility consumer, the most complex, important and misunderstood is resources. Probably more than half of all transit riders assume the fare they pay covers the cost of their trip, when in fact the Hamilton Project of the Brookings Institute reports only a fraction of the nation’s 1,800 transit services operate in the black.
Even Uber and Lyft, internet-savvy taxicab companies, lose money on rides. Indeed, they have never been profitable. Instead of subsidizing rides with taxpayer dollars, they use investor funds. Lyft lost $911 million in 2018 despite revenue of $2.2 billion. Uber, the larger competitor, lost $1.8 billion on revenues of $11.8 billion.
Whenever I am in a conversation with someone who uses Uber or Lyft, I ask them if they are aware that these services lose money.
I have asked this question for several years, and so far every reply is the same: “Really?”
This is no surprise to me. Consumers are primarily concerned with their own ride. Unless someone is thinking of investing in the Uber or Lyft IPO’s, they aren’t thinking about Uber’s profitability. The same goes for transit — people just want to get where they are going. How much the ride is subsidized is not their issue.
But as an organization with a mission to meet the mobility needs of America’s aging population, it is ITNAmerica’s issue. And because we are a non-profit organization, we approached the problem with a different set of business rules. ITNAmerica is a social enterprise, with a business-like approach and a social purpose as a bottom line. We are a little bit like a business and a little bit like public transit, so we have a foot in each world.
Based on data from our first million rides, our most common rider is a 90-year-old widowed woman with self-reported good health, living alone in the community. There is a high likelihood she has a mobility impairment and needs someone to carry her packages, fold her walker, or lend a steadying arm. Her income is modest. Her most common ride is for healthcare (40%), followed by consumer needs, such as rides to the hairdresser or supermarket (23%). The average fare she pays is about $12, and by a ratio of 10 to one, she describes the cost as inexpensive.
At $12 a ride, ITN also loses money. But unlike Uber and Lyft, and like more than 900 other non-profit transportation services in the U.S., ITN solves the labor problem with volunteers. The quality of service is extremely high, with ITN customer satisfaction ratings in the high 90’s for more than a decade, so there is always more demand than supply, and every non-profit transit service is endlessly on the prowl for more of this high quality, low-cost (or free) labor.
Another way to think of this resource is social capital. ITN built its own software, ITNRides, to capture, store, and redistribute this economic resource through a Personal Transportation Account. Volunteer drivers earn credit for every mile they drive, and then store these credits for their own future needs. Volunteers in one ITN community may send the credits to a loved one in any other ITN community nationwide. Older people with cars they no longer drive can trade the cars to pay for rides, storing the value as credits in their Personal Account.
When the automated vehicles eventually come along, which they surely will, ITN volunteers or volunteers for other non-profit transportation services can still ride along and provide the arm-through-arm, door-through-door assistance that publicly subsidized or investor subsidized services simply cannot afford.
This innovative approach to labor and capital expands the pool of resources available to meet consumer needs. It is ideal for tackling what is probably the most challenging transit problem of all: Rural America. ITNAmerica is now pilot testing a model that works where resources are scarce, opportunities for efficiency through shared rides are rare, and distances and cost are accelerated. It’s called ITNCountry, and it is designed to serve anyone in a rural community who wishes to participate in the system.
ITNCountry can thrive where public transit struggles because we provide the tools to support low cost, do-it-yourself transportation networks. If there is one resource in which rural America is rich, it is the spirit of neighbor helping neighbor. We can help reach the unmet need. We are a logical transit partner because we go where you don’t. We partner with communities to develop sustainable solutions, and we look forward to partnering with transit agencies too. In every state, ITNCountry will make the next difference.
Katherine Freund is president of ITN America.