Should the city subsidize your Uber? The experiments behind Ontario’s controversial push for private ‘microtransit’

By Ben Spurr, Toronto Star, Transportation Reporter

Thu., Aug. 20, 2020

Many Ontario transit users were likely left scratching their heads this week at news the provincial government is pushing cities to consider replacing their least-used bus routes with “microtransit” as a condition for receiving COVID-19 aid.

The term isn’t a familiar one for riders more concerned with whether their bus will show up on time than keeping up with the latest transportation lingo.

But some experts believe microtransit represents the future of urban transportation, and forms of it are already operating in Ontario. How effective they are at solving cities’ transit challenges depends on who you ask, however.

The term can describe a range of tech-enabled alternatives to traditional transit, but it’s commonly used to describe partnerships between public transit agencies and private companies that provide on-demand service to riders along variable routes using vehicles smaller than buses.

Toronto is already exploring the concept through planned pilot of a driverless shuttle connecting to the Rouge Hill GO station, but the project’s been delayed by the pandemic. Under one microtransit model that’s gained traction, cities partner with companies like Uber and subsidize trips their residents take through ride-hailing platforms.

Proponents argue such schemes are a more cost-effective way to provide service in lower-density neighbourhoods, compared to deploying buses that operate on fixed schedules regardless of how many people are waiting at the stops. The Ontario PC government argues finding efficiencies will be all the more important as transit agencies grapple with the potentially long-term financial challenges posed by the pandemic.

“Certainly in many very low-density suburban areas, right now we’re spending an awful lot of money running big buses around that are empty,” said Eric Miller, director of the University of Toronto Transportation Research Institute.

He said the current model is bad for cities, which overpay for empty buses, and for riders, who are stuck with infrequent service.

Miller said one big potential benefit of microtransit would be its ability to “fill the gaps” in the traditional transit network. Using on-demand services to carry residents in low-density areas to and from busy subway stations could boost transit ridership on the regular network and free up resources to add service on higher-demand fixed-route bus lines.

But while Miller said microtransit represents an “intriguing possibility,” its benefits aren’t yet proven. “I think what we need are some very serious case studies,” and to “be prepared to fail on a few of them.”

One Ontario municipality that has embraced microtransit is Innisfil, a town of 36,000 located about 100 kilometres north of Toronto. It considered launching a traditional fixed-route bus network to meet the needs of its growing population, but in 2017 opted instead to partner with Uber and subsidize residents’ trips.

Residents pay between $4 and $6 for a one-way trip to or from set destinations like the town hall, recreation complex, and GO Transit stops. Trips to other destinations within city limits receive a $4 discount.

The program has been extremely popular, and last year Innisfil residents took more than 100,000 trips using it.

“People have told us it changed their lives,” saidMayor Lynn Dollin in an interview.

Subsidizing Uber rides cost the town $846,000 in 2019, more than the projected $605,000 in net expenditures it would have taken to set up a two-bus fixed-route service.

But Dollin said a traditional bus network would have operated infrequently and served only a fraction of Innisfil’s residents, who are spread out over an area roughly the size of Mississauga, a city with more than 20 times the population.

The beauty of the Uber-based program is it’s “available 24 hours a day, seven days a week to every resident of Innisfil,” she said.

The program has had problems, however. As costs grew, the town decided last year to raise fares by $1, and capped the number of rides it would subsidize each month at 30 per resident, with exemptions for those who can prove they need the service for essential trips.

Not everyone has equal access, however. Residents who don’t own smartphones can’t use the Uber app, and instead have to book rides by phoning the town’s customer service line, which is only staffed during weekday business hours. People who don’t have credit cards also can’t use the app, and have to buy Uber gift cards from the town hall.

Dollin said Innisfil is addressing those issues by contracting a private company that will be available around the clock to book rides by phone. The town has also started a discount program for low-income residents.

Other Ontario municipalities have pursued less contentious alternatives to traditional bus service. In 2018, Belleville, a city west of Kingston with a population of 50,000, launched an on-demand service that allows riders to hail a city bus using an app.

Software provided by a Toronto-based company called Pantonium calculates the most efficient route for all riders’ trips, which is then transmitted to the driver via a tablet in the bus cab. The route can vary each ride, but all passengers get where they need to go within a guaranteed time frame.

The on-demand service, which is only offered during less-busy evening hours, has increased ridership from about 45 people a night to 350, according to Paul Buck, the city’s manager of transit. The city has added buses to cope with demand.

“The convenience for the customer is outstanding,” Buck said.

It also helps the city operate a more cost-effective service “because the bus only goes where it’s needed. You’re not driving around to every bus stop in town, wasting fuel and (causing) wear and tear, and not having anybody there,” he said.

Scudder Wagg, a Washington, D.C.-based transit consultant and principal at the firm Jarrett Walker & Associates, warned that despite some success stories, the potential for micro- and on-demand transit remains “relatively limited.”

The cost per rider of such programs are relatively high — Innfisfil pays an average subsidy of more than $8 per trip.Last year the TTC budgeted about $1.18 per trip across its network, although the figure would be significantly higher on less busy routes.

In very low-density areas, the cost of on-demand service might be a worthwhile investment to ensure residents can get around, but if ridership levels approach those generated even in less-dense suburban areas of Toronto, it’s likely more cost-effective to run a fixed-route service, Wagg said.

There are also thorny questions about where the savings from partnerships with private transportation providers come from. A major driver of TTC costs is the salaries of its operators, who earn a starting hourly wage of more than $27. Drivers for ride-hailing services make closer to minimum wage.

Framed in that context, debates about microtransit aren’t just about how best to move people, but a “community decision about how you want to value labour,” Wagg said.

Critics were quick to shoot down the Ontario government’s proposal this week, framing it as a backdoor plan to reduce bus service and privatize transit.

Shelagh Pizey-Allen, director of non-profit transit advocacy group TTCriders, said it’s wrong for the province to characterize bus routes that don’t have high ridership as “low-performing.”

Before the pandemic, Scarborough’s 131 Nugget and 132 Milner carried about 3,000 people per weekday, compared to more than 40,000 on the TTC’s busiest routes. But Pizey-Allen said local bus lines serve low-income areas and are vital to transit-dependent residents regardless of how crowded they are.

She also argued passenger volumes on some routes “may be lower because service is not reliable and frequent enough.” The province should provide funding for the TTC to add more buses, which would improve service and attract more paying passengers, she said.

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