Estimating Ride Hailing’s Bite out of Transit

by Randall O’Toole, The Anti-Planner, July 25, 2017

The Antiplanner has credited the decline in transit ridership mainly to low gasoline prices, but ride-hailing companies such as Uber and Lyft may be having more of an impact than I thought. A survey of Uber, Lyft, and Sidecar users in California found that, if the ride-hailing services did not exist, a third of them would have taken transit. That’s less than the 39 percent who would have take a taxi, but still a large share.

Lyft carried 163 million rides in 2016, up from 53 million in 2015. If a third of that growth would otherwise have taken public transit, transit lost about 36 million rides to Lyft in 2016. I can’t find exact numbers for Uber, but Uber carries about four times as many riders in the U.S. as Lyft, so the two of them together may have taken 180 million riders from transit.

APTA’s 2016 report found that ridership declined by about 244 million trips nationwide. That suggests that ride-hailing services could be responsible for about three-fourths of the drop. Considering the rate at which ride hailing is growing, it could effectively replace transit in some communities even before driverless cars hit the streets in commercial service.

Transit agencies such as Philadelphia’s SEPTA are beginning to take notice and wondering how to improve their bus services to compete. One way would be to increase frequencies so travelers used to waiting three or four minutes for an Uber or Lyft ride would know they can also catch a bus every few minutes. While they could offset some of the increase in operating costs by reducing the size of the buses, they would still have the problem that the total cost of operations, including subsidies, approaches the fares charge by Uber and Lyft for transit-length rides (which average 5 miles), so why does transit need to exist at all?

As if in answer to this question, transit advocates are pushing back, especially in response to the scheduled service Lyft is experimenting with in Chicago and San Francisco called Lyft Shuttle. This is just “buses without those pesky poor people,” says one critic, who compares it to going to a country club instead of a city park or taking a private jet instead of a scheduled airline. These are absurd examples because people “exclude the poor” every time they walk into their homes or drive their cars. Because Lyft Shuttle is only available to those with smart phones, it “seems designed to segregate transit customers by class” says Salon. The truth is that the Shuttle is more about speed and minimal wait times than about excluding anyone.

Ride hailing services may be taking mainly higher-income riders from transit, but they are also taking riders from transit’s most heavily used (and therefore most lucrative) routes. One thing I learned during my recent visit to Las Vegas is that, at one time, bus service on the Strip was so profitable that it subsidized money-losing services throughout the rest of the region. Transit advocates will certainly be upset if ride-hailing services “skim the cream” of transit agencies in this way.

But the real point is that ride-hailing services increasingly call into question the entire transit industry. Why should taxpayers subsidize rides for everyone when alternative transportation is available? If we really care about the poor, why not just give them transportation vouchers they can apply to any transportation service? The result would save a lot of money and provide better transportation for everyone.

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Transit’s Precipitous Decline

by Randall O’Toole, The Anti-Planner, July 20, 2017

Transit ridership in the first quarter of 2017 was 3.1 percent less than the same quarter in 2016, according the American Public Transportation Association’s latest ridership report. The association released the report without a press release, instead issuing a release complaining about the House Appropriations bill reducing funding for transit.

The ridership report is devastating news for anyone who believes transit deserves more subsidies. Every heavy-rail system lost riders except the PATH trains between Newark and Manhattan and the Patco line between Camden and Philadelphia. Commuter rail did a little better, mainly because of the opening of Denver’s A line and trend-countering growth of riders on the Long Island Railroad. Most light-rail lines lost riders, though surprisingly many streetcar lines gained riders.

In most cases where light-rail ridership grew, it did so at the expense of bus ridership. Los Angeles Metro gained 1.66 million light-rail riders but lost 8.73 million bus riders, or more than five for every new light-rail rider. Between the two modes, Phoenix’s Valley Metro lost 23,100 riders; Charlotte 20,200 lost riders; and Dallas Area Rapid Transit lost 193,100 riders. Similarly, Orlando’s commuter trains gained 22,700 riders but buses lost 98,500.

Houston and Minneapolis-St. Paul lost bus riders but not quite as many as they gained in light-rail riders. Houston gained 192,100 light-rail riders but lost 154,200 bus riders. Minneapolis gained 337,000 light-rail riders but lost 270,000 bus riders. Only Seattle scored a large increase in light-rail riders (thanks to an expensive new line that opened March 16, 2016) without an offsetting decline in bus ridership.

Many individual transit agencies suffered particularly catastrophic declines. Broward County (Fort Lauderdale), which wants to build a $200 million streetcar line, lost 12.8 percent of its transit riders. San Jose’s VTA, the agency I’ve sometimes called the worst-managed transit agency in the country, lost 11.9 percent. Birminghan lost 9.8 percent; Cleveland lost 7.9 percent; and San Diego lost 6.2 percent. In San Francisco, Muni lost 6.4 percent, BART lost 5.6 percent, SamTrans lost 8.9 percent, AC Transit (Oakland) lost 0.8 percent, and Central and Eastern Contra Costa County lost more than 7.0 percent.

One factor contributing to the losses might be that 2016 was leap year, so its first quarter had 1.1 percent more days than 2017. But both quarters had exactly the same number of work days (62 or 64 depending on whether you count King’s Birthday and President’s Day as holidays or work days), so leap day counted for less than it might have.

Many of these losses are just a continuation of trends that began in 2009 or earlier. As the Antiplanner noted last month, several major transit agencies lost 25 to 35 percent of their riders between 2009 and 2016, and most of these continued to lose in 2017. Moreover, none of the factors that led to these declines–low fuel prices, high auto ownership rates, rising costs, increasing competition from ride-hailing services–are going away, and some are only going to get worse.

Since 1970s, the transit industry has received well over a trillion dollars in subsidies while seeing a 20 percent drop in the average number of rides urban resident take each year. All this should lead Congress and state legislatures to question why taxpayers ought to continue subsidizing this fast declining industry.