Estimating Ride Hailing’s Bite out of Transit

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?
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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.