Someone will find a way to make these hybrid ride-hailing/bus services work.
Bridj was supposed to show the world “what happens when ride-hailing really meets public transit”—at least that’s how CityLab appraised the micro-transit service when it announced a pioneering partnership with Kansas City’s transit agency in 2015.
But the one-year pilot to draw booties into 14-seat vans routed by algorithm failed to catch on. Six months in, the vans had only provided fewer than 600 rides, far short of the 200 per day initially projected; promotion might not have been adequate, and riders complained the routes weren’t so convenient after all. Bridj had more success in Boston, where it first launched. But Bridj’s demise may have been triggered by the circumstances of its attempted acquisition: As my colleague Linda Poon reported on Monday, the company called it quits after a potential buyer, rumored to be Toyota, dropped out from extended ownership talks.
Bridj’s collapse wasn’t necessarily the result of any fatal flaws in the product (unlike, say, the ultra-lux techie shuttle Leap). And it does not spell doom for all the other Uber-for-buses variations still roving city streets. San Francisco and Austin have Chariot, while New York, Washington, D.C., and Chicago have Via, for example. More than anything, Bridj’s story is an affirmation of where such on-demand flexible shuttle services really belong: partnered with transportation agencies.
What Bridj offered was nothing new, really: services like jitneys and dollar vans act as informal, quasi-public shuttle transport all over the world, and plenty of agencies serve paratransit needs this way. What Bridj brought (and others bring) to the table is super-smart software that formulates routes and spits out pick-up spots in real time, based on demand, for any type of rider.
Microtransit’s routing software is a brass ring for underfunded agencies struggling to make barren routes more efficient and add capacity to overloaded lines. Rightsizing some vehicles, adding more flexibility to routes, following patterns of demand to supplement seats: That all makes a lot of sense for them, and it’s what other services like Bridj still promise.
Meanwhile, microtransit startups will want to keep sidling up next to transit agencies, because theirs is an exceptionally hard business model to pencil out in the absence of major subsidies. It’s almost like a shared taxi service, except the fares on many microtransit services have been competitive with those on buses. Unlike Uber, Lyft, or indeed Via’s fleet of driver-owned vehicles, Bridj owned and operated its own vans, and treated drivers as actual employees. In Boston, where Bridj had been running since 2014 without a public partner, it charged about $5 per seat—roughly twice the cost of a MBTA bus, but still likely nowhere near enough to cover Bridj’s high overhead costs. In Austin, where it rolled out last summer, it was about $3. Those prices would be hard to sustain without buckets of cash (from, say, the owner or investor Bridj was trying to court).
In Kansas City, union-represented KCATA drivers operated the vans, and passengers paid just $1.50 per seat. That was thanks to a heavy public subsidy that worked out to an estimated $1,000 per ride, based on the abysmal ridership stats at the 6-month mark. Perhaps Bridj didn’t last long enough to attract the critical mass of riders on its service to bring those costs down, and perhaps a much denser city, like New York, San Francisco, or Washington, D.C., lend themselves to microtransit services than a more spread-out town like Kansas City, at least for now. “Maybe microtransit’s business models should be characterized more by the environments they’re serving than what they’re trying to compete with,” says Susan Shaheen, the co-director of UC Berkeley’s Transportation Sustainability Research Center. Given more time, these fits can be worked out.
Either way, even the smartest real-time routing software probably isn’t enough on its own to make mass-transit fares work to support what function more as pooled taxi rides. For that matter, it’s also probably not even enough to make pooled taxi rides work: Just look at Uber’s loss of nearly $3 billion in 2016, money that went toward subsidizing millions of trips.
Transit depends on subsidies, and if microtransit really is an answer to underused, oversized public buses traveling along 30-year-old routes, then at least some of its backing should come from taxpayers, without the expectation of turning profits. After all, startups like Bridj are likely to fade away if they’re expected to make money and then fail. “If you’re depending on a service and it goes away, that’s a big deal,” says Sharon Feigon, executive director of the Shared Use Mobility Center. “We have to think about how to structure those relationships so that the users will still have options, given all those possible consequences.”
The promise of microtransit will continue to entice transit operators, especially as private car services crowd in. “Uber and Lyft’s ability to pull riders off surface rail is not a trend that will go away,” says Seleta Reynolds, general manager of the L.A. Department of Transportation. “We have to continue to test out and try things to transform the way we deliver public transit, in a way that people like better.”
So expect to see more microtransit pilots in more cities (including L.A.), testing new relationships between transit operators and software developers. Bridj may not have had found the right recipe, but someone probably will. It might be Via, with its driver-owned vehicles. Or maybe Chariot, with its $65 million acquisition by Ford in 2016 and access to San Francisco’s bike-share data, will be able to crack the routing code in the Bay Area. Who knows what else is coming down the VC pipeline, and who else is cozying up with public transportation officials? Microtransit isn’t dead—it’s just trying to find its way home.