National

Uber, Lyft and transportation agencies across the U.S. are encouraging customers to combine ride-hailing with public transit, ultimately to try to streamline travel options and payment. 

Why it matters: These partnerships could fill in gaps in public transportation without worsening congestion. But they could also expose public transit riders to data privacy risks, and upend transit's business model. 

What's happening: Aside from displaying transit schedules in their apps, Uber and Lyft also give discounts to customers who hail rides to and from public transit hubs.

The impact: The convenience is a huge selling point, but there could be unforeseen consequences.

Critics are concerned that private companies could control access to transit. 

Ride-hailing companies could end up divvying up which services are available within their respective apps, creating parallel transportation systems.

Regulations around data sharing and customer data privacy have yet to be set. 

It's unclear if Uber or Lyft could access public transit data and how it would be protected — and how much of their proprietary data would be shared with transportation agencies. 

Ride-hailing prices in one case increased after a discount was offered. 

It's eventually possible that transit riders could be siphoned off by ride hailing — or that companies could charge to offset discounted miles, or to feature transit within their apps.

Neither Uber nor Lyft are profitable. Pivoting to become a multi-model platform could offer a sustainable business model. 

Public transit agencies could develop their own next-generation apps to compete, but doing so is expensive and requires software expertise. 

What we're watching: As partnerships between ride-hailing companies and public transit evolve, cities will need to create enforceable rules and regulations to make sure services remain accessible and affordable.

Raphael Gindrat is co-founder and CEO of Bestmile, which has developed a fleet-management platform.

Connecting Lyft or Uber with public transit could bring data risks

Consolidating transit options in one app could increase profits.

Illustration of a bus with a route marque that includes a car, an arrow, and a destination

Transportation

Expert Voices

Cities

Uber, Lyft and transportation agencies across the U.S. are encouraging customers to combine ride-hailing with public transit, ultimately to try to <a class="gtmContentClick" data-vars-link-text="streamline" data-vars-click-url="https://www.axios.com/ubers-one-stop-plan-for-transportation-17297531-01a9-43eb-acce-b310ac469ada.html" data-vars-content-id="1433ec77-de01-4727-9c1d-2c4734cb87aa" data-vars-headline="Connecting Lyft or Uber with public transit could bring data risks" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/ubers-one-stop-plan-for-transportation-17297531-01a9-43eb-acce-b310ac469ada.html" target="_self">streamline</a> travel options and payment. Why it matters: These partnerships could fill in gaps in public transportation without worsening congestion. But they could also expose public transit riders to data privacy risks, and upend transit&#x27;s business model.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Technology used in ride-hailing and other new mobility services could be used to make public bus networks more environmentally friendly and convenient. 

Why it matters: Public buses are frequently criticized as unreliable, inefficient and alternatively near-empty or so full that they skip stops, but electric buses with next generation technology and flexible routes could help address congestion and emissions. 

What's happening: Public transit ridership is down across the U.S. due in part to new mobility services like ride-hailing and scooters. 

What's needed: Many municipal bus services rely on manual surveys of passengers to assess user preferences and modify routes — an expensive and unreliable practice. 

Instead, any and all available public transit ticket data could be analyzed to understand actual demand patterns and optimize routes.

Fleet optimization software could match supply and demand in real time, dispatching additional vehicles on particularly busy routes, or adding flexible routes at peak hours.

Contactless payment could also speed boarding times and keep buses on time.

The design of buses could be demand-responsive, too. In Strasbourg, France, the transit agency replaced a traditional bus line with modular electric shuttles that can add or remove cabins as demand shifts throughout the day.

But, but, but: Cities across the U.S. and world-wide are struggling with adopting electric buses.

In places that are moving ahead with electric buses — like Shenzhen, China, which boasts the world’s only all-electric bus network — the biggest obstacle was installing and paying for the massive charging infrastructure needed to run 16,000 e-buses.

TransitCenter found that the seven U.S cities which grew transit ridership last year did so by either expanding bus service or completely overhauling their bus systems to improve service.

The bottom line: Integrating advanced technology and deploying next-generation vehicles with upgrades that make them demand-responsive and environmentally friendly could make bus networks more efficient, more reliable, and more popular. 

Raphael Gindrat is co-founder and CEO of Bestmile, which has developed a fleet-management platform and whose clients include Strasbourg’s transit agency.

Ride-hailing technology could make public buses more efficient

Electric buses on flexible routes could help address congestion and emissions.

Illustration of roads in the shape of a penrose triangle

buses

Technology used in ride-hailing and other new mobility services could be used to make public bus networks more environmentally friendly and convenient. Why it matters: Public buses are frequently criticized as unreliable, inefficient and alternatively near-empty or so full that they skip stops, but electric buses with next generation technology and flexible routes could help address congestion and emissions.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

If AVs eventually dominate the car industry, automakers could start charging for miles travelled instead of vehicles sold — potentially a much bigger revenue opportunity.

The big picture: Automakers and tech companies are investing in AV technology because it offers, among many things, a new revenue stream if people shift from owning vehicles to buying access to transportation.

Background: Currently automakers make $512 billion selling about 17 million vehicles per year, for an average of around $30,000 each.

Meanwhile, ride-hailing costs about $2.50 per mile, including driver labor, according to estimates from Ford and from GM.

How it works: There are some 260 million cars on U.S. roads, traveling an average 3.9 trillion miles per year. 

At 60 cents per mile (AAA's estimate of vehicle operating costs in the U.S.), this represents a $2.37 trillion revenue opportunity today, if all miles were converted to AV services.

If automakers indeed shift their business model to operate autonomous mobility services, there's room to earn a tidy profit and still charge far less than ride-sharing companies. 

The bottom line: The Center for Automotive Research found that "OEMs and venture capitalists expect innovative mobility services will start yielding double-digit profit margins, much higher than the 4% to 9% automakers' core business currently generates" — up to 20%.

Automakers envision a business model for AVs: selling miles, not cars

Converting today's vehicles miles to AV services could generate $2.37 trillion.

Automakers

Business

If AVs eventually dominate the car industry, automakers could start charging for miles travelled instead of vehicles sold — potentially a much bigger revenue opportunity.The big picture: Automakers and tech companies are investing in AV technology because it offers, among many things, a new revenue stream if people shift from owning vehicles to buying access to transportation.

Companies like Bridj, Ford and Sweden's Kutsuplus have shut down their microtransit shuttle services, in part because optimizing the trips has proven both difficult and costly.

The big picture: In theory, moving more people with fewer vehicles is a good business model. But microtransit requires companies to purchase and maintain vehicles and to pay drivers for the duration of their shift, not just when they are carrying paying passengers.

AVs could eliminate driver costs and reduce navigation errors, but improving the efficiency of their routes requires crunching massive data loads in real time.

Where it stands: Cities, companies and researchers are reworking algorithms to make shared routes more efficient, to minimize both congestion and extra transit time for passengers.

Microtransit provider Via and the Los Angeles Department of Transportation are running a pilot that focuses on "last mile" travel from transit stops.

Using computer models, a team at the University of Texas found that 1 shared vehicle could replace 11 single-occupancy vehicles around Austin, with wait times between 20 seconds and 5 minutes.

Bestmile data scientists found that 200 shared, on-demand vehicles could accommodate the 31,000 rides taken in 2,700 Chicago taxis each day with average wait times of five minutes and added ride times of six minutes. 

A McKinsey analysis found that, as soon as 2030,  shared "seamless" mobility could accommodate 30% more traffic while cutting travel time by 10%.

What to watch: The EU's AVENUE project is rolling out last mile autonomous shuttles in four cities to connect workers and residents with long-haul public transit and to determine the requirements for replicating successful service elsewhere.

Solving the efficiency riddles of microtransit

Pilot programs have struggled to find a sustainable model that optimizes routing.

Ride-sharing

Companies like <a class="gtmContentClick" data-vars-link-text="Bridj" data-vars-click-url="https://www.citylab.com/transportation/2017/05/bridj-collapses-after-3-years-microtransit-bus/524955/" data-vars-content-id="9e67f151-62a6-4f91-b9c0-1c6362616ffa" data-vars-headline="Solving the efficiency riddles of microtransit" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.citylab.com/transportation/2017/05/bridj-collapses-after-3-years-microtransit-bus/524955/" target="_blank">Bridj</a>, <a class="gtmContentClick" data-vars-link-text="Ford" data-vars-click-url="https://www.axios.com/ford-is-shutting-down-commuter-shuttle-8875e0fe-3a81-4bef-9f7a-618e54974964.html" data-vars-content-id="9e67f151-62a6-4f91-b9c0-1c6362616ffa" data-vars-headline="Solving the efficiency riddles of microtransit" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/ford-is-shutting-down-commuter-shuttle-8875e0fe-3a81-4bef-9f7a-618e54974964.html" target="_self">Ford</a> and <a class="gtmContentClick" data-vars-link-text="Sweden&#x27;s Kutsuplus" data-vars-click-url="https://www.citylab.com/transportation/2016/03/helsinki-on-demand-bus-service-kutsuplus/472545/" data-vars-content-id="9e67f151-62a6-4f91-b9c0-1c6362616ffa" data-vars-headline="Solving the efficiency riddles of microtransit" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.citylab.com/transportation/2016/03/helsinki-on-demand-bus-service-kutsuplus/472545/" target="_blank">Sweden&#x27;s Kutsuplus</a> have shut down their microtransit shuttle services, in part because optimizing the trips has proven both difficult and costly.The big picture: In theory, moving more people with fewer vehicles is a good business model. But microtransit requires companies to purchase and maintain vehicles and to pay drivers for the duration of their shift, not just when they are carrying paying passengers.

The looming deployment of AVs could render parking garages obsolete, which has created a conundrum for developers — whether to invest in parking garages that can be converted for other uses or stop building them entirely.

The big picture: While the need for parking is acute in cities today, parking structures are typically financed with a 30-year payback and some believe that AVs will reduce or eliminate the need for parking as soon as 2030.  

Background: American drivers spend an average of 17 hours per year searching for parking at an annual cost of $73 billion. But the math doesn't add up in favor of building new garages because of the looming deployment costs of AVs. 

Construction costs for above-ground parking structures can cost $21,000 per space, and another $500 per year to maintain each space.

Parking costs average $2 per hour in the U.S., but can reach $33 for two hours of parking in New York. 

AVs could cost just 50 cents per hour to operate, so it's largely expected that AVs will reduce demand for parking.

When parking garages do become obsolete, the cost of converting them varies. In Pittsburgh, for example, it cost $17 million to convert 3 floors of a parking garage into 62 apartment units.

Parking designed to be convertible is 17% more expensive to build and holds fewer cars per square foot. 

What’s happening: In spite of the tension developers are newly navigating, most cities continue to require developers to add a minimum number of parking spaces. 

But a growing number of cities are eliminating or easing parking requirements for new development. 

And some parking structures are already being built with the intention of transforming them into office space down the road.

Meanwhile, developers are transforming unneeded parking spots into retail space in some cases, which could offer ROIs as high as 40%. The real estate value of a single parking space can reach $75,000. 

The bottom line: Analysts predict AVs could be roughly 10 years away, and developers are already bracing for shifts in parking infrastructure status quo.

Editor’s note: This post has been corrected to reflect that it can cost up to  $500 per year (not month) to maintain a parking space in a garage.

AVs could change the economics of parking garages

Keeping an AV on the road could be much cheaper than parking it.

Side view of a parking garage in Chicago from October 1967.

A parking garage in Chicago, October 1967. Photo: John Bulmer/Getty Images

Infrastructure

Future

The looming deployment of AVs could render parking garages obsolete, which has created a conundrum for developers — whether to invest in parking garages that can be converted for other uses or stop building them entirely.The big picture: While the need for parking is acute in cities today, parking structures are typically financed with a <a class="gtmContentClick" data-vars-link-text="30-year" data-vars-click-url="https://www.greenbiz.com/article/think-again-building-public-parking-garages" data-vars-content-id="be218d4c-20a7-4e3d-a9b0-678df4798ebc" data-vars-headline="AVs could change the economics of parking garages" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.greenbiz.com/article/think-again-building-public-parking-garages" target="_blank">30-year</a> payback and some believe that AVs will reduce or eliminate the need for parking as soon as <a class="gtmContentClick" data-vars-link-text="2030" data-vars-click-url="https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-sharing-the-road-is-likely-to-transform-american-mobility" data-vars-content-id="be218d4c-20a7-4e3d-a9b0-678df4798ebc" data-vars-headline="AVs could change the economics of parking garages" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-sharing-the-road-is-likely-to-transform-american-mobility" target="_blank">2030</a>.

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Raphael Gindrat

Stories

Ride-hailing technology could make public buses more efficient

Connecting Lyft or Uber with public transit could bring data risks

AVs could change the economics of parking garages

Automakers envision a business model for AVs: selling miles, not cars

Solving the efficiency riddles of microtransit