Illustration: Sarah Grillo/Axios

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.
  • Pricing models could shift.
    • 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.

Between the lines:

  • 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.

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