Transformational Transit Changes Approaching Rapidly

COST Commentary: The winds of change are blowing strong across the entire field of ground transportation/mobility and it will rapidly lead to further major transformations in the demand and design of public transit as well as most personal travel.

Below is a brief, recent writing by Robert W. Poole of the Reason Foundation describing start-up commercial transit businesses designed to “fill gaps” in public transit service in numerous major cities. These entrepreneurial activities combined with those of private ride services such as Uber, Lyft and others, expanding ride share services such as Carma’s connection of car commuters and ride sharing rentals, several city to city express bus systems and others, will change the public transit landscape by providing efficient, affordable mobility alternatives which save significant valuable time of travelers.

Autonomous (Driverless) vehicles is another, rapidly approaching, transformative mobility innovation which promises to reduce mobility costs for average users of roadway vehicles and provide greater overall safety. Autonomous vehicles will dramatically change land use, making it much more cost-effective for most, including the need for fewer lane-miles per capita, major increases in vehicle capacity per roadway lane mile, much less overall costs per vehicle for roadway use and more effective use of high cost land in the core of cities.

These creative ideas and inventions, supported by rapid technology advances, will necessitate new approaches to mobility in general. One substantial impact will be the need for transformational changes to public transit as we know it today. The final configurations are to be determined, but, huge, expensive systems, which are not cost-effective and require major tax subsidies and will likely be less needed and less supported. Light rail and commuter rail will probably not play a measurable role in future mobility in regions such as Austin. Rail is not cost-effective now and will become even less cost-effective with the array of new mobility options. Even transit’s “backbone” bus system will experience major adjustments and will likely have a further declining role in regional mobility.
ISSUE NO. 141 – JULY 2015

By Robert W. Poole, Jr.

Will Private Alternatives Disrupt Public Transit?

I’ve been watching the development of investor-funded alternative transit services ever since the debut of start-up Bridj last year in Boston. Along with similar start-ups in Chicago, San Francisco, and Washington, DC, Bridj’s business model is to fill in gaps in a metro area’s transit market. They aim to offer a shared-ride service, using 15-passenger vans, that is intermediate in price and service quality between that of legacy transit agencies and personalized rides offered by taxis and companies like Lyft and Uber. This is essentially a 21st-century version of jitneys, enabled by algorithms drawing on big data to identify market niches and adjust service patterns based on demand.

A much-cited example from Bridj’s first year in Boston is an early market for service between Brookline and high-tech, jobs-rich Kendall Square in Cambridge. Bridj’s David Block-Schacter (a former MBTA employee) explained that “By traditional mass transit, it takes two transfers; on your best day that could take 40 minutes; on your worst day it could take upwards of an hour.” But Bridj’s direct route makes that trip in 15 to 20 minutes. So it’s no wonder people are prepared to pay $5—about three times the MBTA’s fare.

These start-ups vary somewhat in vehicles, from luxury buses to minibuses to shuttle vans. Chicago start-up Blackline offers trips from suburbs to the Loop in minibuses. In San Francisco, competitors Chariot (15-seat vans) and Leap (luxury buses) offer an array of in-city routes. And Bridj this year has expanded to a second location, Washington, DC. These services all offer a guaranteed seat and free wi-fi, and some offer refreshments en-route. Unlike transit agency bus routes, their trips involve few or no stops along the way between residential areas and job centers. And they offer predictable schedules, another selling point for customers. Together, this set of features creates a value proposition that many find superior to either driving and parking, using legacy transit, or paying for solo-ride service via taxi or Uber/Lyft.

Needless to say, the idea of anyone other than a mass transit agency providing such services rubs some people the wrong way. Some bristle at the idea of a two-tier market for getting to work—the same argument that dubs express toll lanes “Lexus Lanes.” I find it odd that these critics generally see nothing wrong with people having the choice between $1.00 coffee at a legacy coffee shop and a $2.50 coffee at Starbucks.

Another common objection is that these services will cream-skim the more affluent riders from transit agencies. But sensible transit agencies are figuring out that Bridj and Chariot are filling gaps that their agencies cannot fill. Tilly Chang of the San Francisco County Transportation Authority told the Los Angeles Times that “If we could, we would be meeting those needs,” but that in fact, “at the end of the day, we can’t meet the demand.” And in Boston, MBTA’s Joe Pesaturo says it does not see Bridj as a threat, given the specialized market niches it is targeting. “It’s like saying that Disney World competes with a traveling carnival.”

Another worry is whether people using the private services are worsening air quality and CO2 emissions. Susan Shaheen, co-director of the UC Berkeley Transportation Sustainability Research Center says this depends on how customers were commuting beforehand. If they were driving alone, or driving to a transit station, then the shift to a private shuttle is a net gain. And UCLA’s Matthew Kahn cites research showing that “People will substitute from car to bus if the bus is high quality and allows them to use their scarce time productively.”

One problem for these start-up companies is that in many cities, it is illegal for them to use designated bus stops—a legacy of cities’ ancient bans on jitney service. This problem was anticipated 18 years ago by Daniel Klein, Adrian Moore, and Binyam Reja. Their 1997 book Curb Rights (Brookings Institution) called for cities to create auctionable curb rights to enable jitney-like services to operate legally and efficiently in commercial areas. It looks like the time for this idea has now arrived.

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