Aiming to compete directly with Uber and Lyft, Oregon’s Lane County Transit District (LTD) has started an app-based bus service in Cottage Grove, which is 22 miles south of Eugene. LTD says that it is making transportation “affordable” because it charges only $1 for the door-to-door service, whereas Uber and Lyft would charge far more.
Called the Connector, the bus service costs riders just $1 to and from anywhere within the Cottage Grove city limits. LTD actually contracts out the service to South Lane Wheels, which is run by the city of Cottage Grove and which already was providing such a service for $3 a ride for up to three miles and roughly a dollar a mile beyond that. Cottage Grove is small enough that no trips within the city limits are three miles long, but South Lane Wheels, unlike the Connector, will go outside the city limits.
According to the city of Cottage Grove’s profile in the National Transit Database, fares collected by South Lane Wheels cover less than 6 percent of its costs. That means the average ride cost taxpayers more than $32 in 2017. Now LTD is adding its own subsidies to those rides.
LTD also offers bus service between Cottage Grove and Eugene for $1.75. The Eugene Register-Guard notes that a ride from a home in Cottage Grove would cost more than $45 by Uber, Lyft, or a taxi, but only $5.50 on the Connector plus the intercity bus. However, the Guard failed to point out that the Eugene-Cottage Grove bus only operates eight times a day on weekdays, and fewer than that on weekends. South Lane Wheels offers on-demand service to Eugene for $15.
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Uber and Lyft lose money, but the rides cover their costs; the losses are in the overhead. But running 14-passenger buses in competition with individual owners of Toyota Priuses and other small cars isn’t going to be cheap. Where Uber and Lyft are subsidized by venture capitalists who hope to eventually earn a profit, South Lane Wheels gets nearly 90 percent of its operating funds from federal taxpayers, who will never see a return on that spending.
I can’t get much information on Uber and Lyft services in Cottage Grove, but a local taxi company charges $8 for a two-mile trip and operates 24 hours a day, six days a week. The Connector would cost riders just $1 for the same trip, but cost taxpayers another $34 or so, and it operates just 12 hours a day on weekdays, and not at all on weekends.
In essence, LTD and South Lane Wheels are engaged in predatory pricing, trying to shut down ride-hailing services by providing a similar service at a heavily subsidized fraction of the fares charged by taxis or ride hailing. This is another example of why it would make more sense to simply give transportation vouchers to low-income people and let them decide what services to use with those vouchers.
Another nail in the coffin for mass transit. For years electric cars have been the which way odd man out for transits inevitable replacement. But the manufacture of EV vehicles has always been curtailed cost and environment wise by the security of rare earth metals (dysprosium, neodymium, Yttrium,etc)
BMW has announced it’s next generation of EV vehicles will be rare earth free, Honda is working on the same. Ford Motor Company is working on motors with less than half the rare earths of prior models and ultimately working towards RE-free motors. Japanese and Korean companies have supposedly been concerned for a decade now about their dependence upon Chinese rare earth supplies (90% of global total).
So now they’re working around the problem making hybrids and EV’s more available in the coming years. Rare earth free electric motors. Ford’s already working on a hybrid Escape 2020, Hybrid Explorer, hybrid mustang.
We are forced, as federal taxpayers, to subsidize a non-profit to take business away from companies that give a large number of people employment and who thus pay taxes.
Ocasio-Torres and friends want to get rid of all private companies. Then they will complain about there being no more $$ for their subsidies.
Madness.
Let us all be reminded of the infinite wisdom of the Highwayman before he rears his head………….
“For starters roads are not expected to be profitable to survive. “