Sunday, July 19, 2015

Transit vs. e-hailing and transit vs. cars

Recently I wrote about some discussion from Timothy B. Lee and Chris Plano about the possibility that "ride-hailing could actually be stealing riders from transit." Building on Plano's musings and some data released by Uber, in April Eric Jaffe envisioned an "integrated system," with larger vehicles, and some challenges:

In an ideal world, microtransit providers would become the feeders to public transportation's core routes. They'd address what experts call the "first-mile, last-mile" problem—that gap at the start and end of every trip that's difficult for traditional transit operators to serve in a cost-effective way. Coverage to low-density corridors or remote neighborhoods becomes very doable. A car-free lifestyle becomes that much more viable.


An integrated transit system with public agencies as a core and microtransit as a feeder might be the urban ideal, but whether profit-minded private companies would submit to such an arrangement is another question. One reason public transit agencies can't reliably serve feeder routes in the first place is they tend to lose money. Asking microtransit companies to take that role might not harmonize with their business mission.

If an integrated scenario doesn't pan out, the flipside might be an ugly competitive one—with microtransit providers trying to poach bus and rail riders in key high-density corridors. That outcome would create a two-front fight for transit agencies. On one side they'd be battling for riders against private services with potentially greater resources. On the other, as fare revenue eroded, they'd be battling public officials for more funding to stay afloat.

As with the earlier discussion, an important angle that is being missed is pricing. Jaffe talked to David King for his post, and King should have told him that such an integrated system was already tried here in New York back in 2010 and the plan failed miserably, in part because it didn't give the operators the freedom to set their prices. If the "microtransit" providers can charge what the market will bear for feeder services, they might be able to make a profit.

Note that Jaffe is actually claiming that e-hail carpooling and jitneys compete with public transit for two distinct resources: riders, who bring in fares, and political support, which brings in subsidies in the form of cash and land (street space). These are not necessarily the same at all, and the claims should be evaluated separately.

I've talked about this before and I've got more to say about it in a future post, but right now I just want to reiterate that in the big coastal cities like New York and Los Angeles - basically, the cities where Uberpool and Lyftline either currently operate or are likely to be successful - the game has changed, and transit agencies are no longer hurting for riders. Any passengers attracted by these services will simply make room for more passengers on the public trains and buses.

Jaffe's second concern, that electronic carpooling services will take political support from public transit, reminds me of the old joke by Apocryphal Winston Churchill: we've already established that competition can affect the level of political support for transit, we're just debating how much - and where it comes from.

Jaffe's concern about political competition is part of what I call the Cycle, and have been discussing for years. Yes, the level of political support for transit subsidies is affected not only by the number of riders, but by their aggregate political power. But that's far from the only factor, even when the government is not as corrupt as New York State.

For decades, transit was losing riders to government-subsidized systems of highways, parking and cheap gas, but for some reason people tend to not want to think about that. Jaffe has occasionally written about it, but think about most of the people who wring their hands over the plight of the poor bus. Remember them talking about how massive subsidies to roads in the State budget, or the Tappan Zee Bridge, will drive public transit out of business? Me neither.

It's always been a bit of a weird argument that we should not allow private services that compete with government services. In the Soviet Union, maybe, where you had a carefully planned economy, you might not want anyone disrupting that. But this isn't the Soviet Union. We don't complain, as far as I know, about private universities putting public universities out of business, or for-profit cheese companies competing with government cheese. And yet somehow transit is a great opportunity for people to rail against those nasty big businesses - as long as you don't mention the competition from massive government subsidies to private cars.

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