TNCs Existential Threat to Public Transportation

By Jim Aloisi

James Aloisi, a former state secretary of transportation, is a principal at Trimount Consulting and the Pemberton Square Group. He serves on the board of TransitMatters.

Editor’s note: This is part one of a two part series.

Ride-hailing apps are a disruptive auto-centric technology

Advocacy is what like-minded people do, usually in an organized fashion, to effect change in the way government or public policy impacts their lives. Advocacy can take many forms and approaches, from energizing and activating people at the grassroots, to persuading decision makers at the grasstops, to knocking on doors in the corridors of power, or digging deep in the weeds of data analysis. Whatever form it takes, effective advocacy must be guided by clarity of mission, coherence of message and cogency of thought.

Effective advocacy also has to be agile, and by that I mean it must be able to adhere to its principles without being stuck in old-think or blind to fundamental changes in the landscape it is trying to influence. This has particular resonance for transit advocates in 2018, as we must squarely acknowledge, understand, and respond to profound changes in the way people think about their personal mobility, and anticipate fast-approaching disruptions that will upend the automobile industry and threaten public transportation as we know it.

What’s at stake is nothing less than our quality of life – a state of mind and a temporal condition influenced by many factors, including the viability of sustainable mobility choices which influence the use of finite land resources, the quality of the air we breathe, and the fairness and cohesion of the society we live in. Advocates whose mission is the advancement of sustainable mobility (and in particular better public transportation) face an unprecedented challenge with the emergence of new approaches to personal mobility that respond to the expectations of a population accustomed to service delivery as an on-demand, interactive, cashless, and convenient experience. The stunning reality is that these new approaches, which on the surface appear to embody the ethos of a modern techno-centric era, are based unapologetically upon a 20th Century auto-centric mindset.

It is more than ironic that well into the 21st Century, the one great disruptive change in personal mobility is built upon the increased use of the internal combustion engine. Transportation Network Companies (TNCs) such as Uber and Lyft have become major players in the provision of personal mobility, primarily in urban areas. The problem with TNCs – and I say “problem” because it relates to what I perceive as their most negative impacts – is the essential auto-centric nature of the industry. There is nothing innovative about a person driving a car with a passenger in it. TNCs may have disrupted the taxi industry, but they did so because of what Stanford University futurist Tony Seba would call a “business model innovation” based upon the convergence of smartphone technology and the cloud. Seba makes his living (at least some of it) developing models to explain the factors that cause massive marketplace disruptions. He persuasively argues that what we think of as innovation is, to some degree, the skillful leveraging of technologies, but it also is the emergence of better business models designed to respond to customer/consumer demand.

The disruptive TNC business model poses an existential threat to public transportation. Think I’m exaggerating? Think again. The data we have (and it is not all the data we need because companies like Uber and Lyft jealously guard what they consider “proprietary”) indicates that the use of TNCs is widespread, growing, and unlikely to recede. Last year, 41.7 million TNC rides originated in Boston and Cambridge. More than 80 percent of all TNC trips in Massachusetts originated in Suffolk and Middlesex counties. With the single exception of Worcester, the top 10 Massachusetts municipalities where TNC trips originated last year were in the transit-rich metro Boston inner core.

A report last year by the UC Davis Institute of Transportation Studies found that well over half of all TNC users would either not have made the trip, or would have travelled sustainably (using transit, cycling, or walking) but for the availability of a TNC alternative. More locally, the Metropolitan Area Planning Council reported this February that an astounding 42 percent of 1,000 TNC users it surveyed would have taken transit but for the availability of TNCs and the real or perceived poor performance record of the T. If nearly half of potential transit users are being siphoned off by TNCs, the future of an egalitarian transit system is in grave peril.

TNCs are not egalitarian. Yes, they are theoretically available to all, but “all” in this instance does not include the unbanked or people with lower incomes. The UC Davis study reported that use of TNCs by college-educated riders was double that of non-college educated riders, a dichotomy that was also reflected when the study looked at income disparities among users. What does it mean for the future of our public transportation system if it is used not by a broad spectrum of people as a matter of choice, but only or primarily by those who use it out of necessity?

What’s worse, TNCs have taken root in Massachusetts without the benefit of a thoughtful regulatory framework. Such a framework should be designed to protect the public from a variety of potential downsides that inevitably will occur in an unconstrained environment. But Massachusetts has been slow to respond in an effective way to these market force changes, and the law enacted in 2016 stands as a “too little, too late” approach to harnessing and regulating the power of innovation for the public good.

Lurking like a troll under the bridge is the emerging autonomous vehicle industry. Like TNCs, autonomous vehicles are rooted in a 20th century auto-centric mindset that makes no apology for increasing vehicle miles traveled while utilizing internal combustion engines. Recent setbacks based upon safety concerns do not seem to have taken much of the wind out of the sails of the transportation futurists who promote autonomous vehicles as tomorrow’s inevitable “next new thing.” There is absolutely no clarity with regard to the “how, when, or where” of ubiquitous autonomous vehicle mobility, nor is there a clear and convincing business model that makes sense – yet. But we would be foolhardy to assume that autonomous vehicles, like TNCs, won’t quickly become a part of the new mobility landscape, and autonomous vehicles, unlike TNCs, may take the form of shuttle vans that provide a form of micro-transit, and hence a direct competitive threat to public transportation.


This article was cross-posted on Commonwealth Magazine as part of an ongoing media partnership focused on the future of mobility in the Boston region. Visit the series page for more articles in the series.

Discussion

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3 Comments

  1. Transit must evolve to stay relevant. Engines will evolve to be zero polluting, transitioning from heat engines burning dinosaurs to solar powered battery electric. Once the sins of the car are addressed mobility will be abundant and cheap. If Transit is to stay in the picture they need to really start moving fast forward. Buses and trains are big box transit and already irrelevant in the modern smart phone era. Transit has carved out the poor as their market but their polluting diesel buses and trains are not kind to our collective lungs.

    Reply
  2. Excellent analysis. At a conference in April, an Uber executive tried to persuade me that it is the friend of public transport but he failed miserably to convince me.
    On autonomous cars, you may wish to read my book available on amazon uk – Driverless cars: on a road to nowhere – which rather debunks the idea that these cars are coming soon or indeed ever.

    Reply
  3. Thanks for a thoughtful post. I’d like to present an alternate perspective on key assumptions:
    1) Autonomy depends on internal combustion engines (ICE). Not true. Shared, autonomous electric vehicles depend on mutually reinforcing elements. Autonomy requires higher capital outlay for sensors and GPUs and electric powertrains are also more expensive (today). EVs can provide a lower cost of ownership over a lifetime of high mileage commercial use. Autonomous vehicles also address EV ‘range anxiety’ with ability to recharge overnight and as needed between trips.

    2) TNCs aren’t egalitarian. Not true in all cases. Dynamic shuttle services are expanding today with a fixed cost per ride that is affordable for commuters and a diversity of urban residents. Dynamic shuttle operator Via (ridewithvia.com) sells its software solution to transit agencies to help them with consumer aggregation, billing and dynamic routing.

    Clearly there is work left to do. For transit advocacy, I’d encourage an open (and ongoing) dialogue at the city/metro level on shared objectives and transparent reporting by TNCs, such as:
    – geographic service area
    – consumer cost per seat mile
    – greenhouse gas emissions per seat mile
    – transit performance (e.g. wait times, service quality & affordability) under both public and private operators
    – AV regulation that optimizes accessibility, affordability and congestion mitigation

    (Full Disclosure: As an automobility-focused VC fund, we have investments in dynamic and autonomous shuttle companies Via and Optimus Ride).

    Reply

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