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Ride Sharing and Cities Team Up on Transit, Last Mile Issues

A little over a month ago, in our article “Fueled by Auto Industry Support, Bike Sharing Systems are Taking Over Cities” we noted how cities and urban planners continue to struggle with the “last mile issue” facing their residents using public transit systems. In that April 16, 2018 article, we noted how cities are integrating Vehicle-to-Vehicle and Vehicle-to-Infrastructure communication systems as well as bike-sharing programs in an effort to curb urban congestion and improve transit efficiency. Continuing along this route, cities are now looking at how ride-sharing and ride-hailing apps such as Via, Lyft, Uber, and others can either fill these gaps, or completely replace public transit systems as we know them today.

The city of Arlington, Texas, for instance, recently announced the decision to replace their downtown city bus service with ride-sharing on demand through select ride-sharing companies. Under this pilot project, residents of Arlington can request an on-demand shuttle from one of Via’s 10 commuter vans located in the downtown area. Not only has the city viewed this move as a way to more efficiently meet the needs of consumers, but as a cost-savings venture as well. These ride-sharing systems aren’t fixed to predetermined routes and can optimize trips based on demand and rider-needs, meaning more efficient and optimal use of city resources.

Although the city is planning on partially subsidizing the public-private-partnership with local and federal dollars, they are not the first city to take this approach. Summit, New Jersey has been subsidizing Uber rides for commuters traveling to and from the local commuter train station since October 2016 and Altamonte Springs, Florida completely replaced public transportation with subsidized Uber rides starting in September 2016.

While the above-mentioned cities are looking to replace urban transportation methods with ride-sharing and other next-generation transit ideas, cities such as Detroit, Michigan are struggling with different types of transit issues. Detroit is a unique test-case in the public transportation sector with no less than six different public-transit systems operating in the City of Detroit and Metro-Detroit area as a whole, but gaps in coverage and logistical transit issues still remain. While one public transit services provider covers the City of Detroit itself, a separate transit provider covers the suburbs, and another provider connects between the two regions. Often schedules between systems do not line up, leaving commuters standing in the summer heat or winter cold for 45-minutes or more, waiting to change lines. Although the metro-Detroit systems have seen improvements in the past decade, gaps continue to exist for those who rely on the Detroit area bus system.

Looking to fill these gaps and better meet the needs of commuters with more than just bike-shares, bike-lanes, and better sidewalks, the City of Detroit partnered with Lyft to offer a new pilot program for late-night commuters on select transit corridors. This new program will utilize Lyft’s ride-sharing program to help riders to get to and from home, work, and the transit corridors during late-night hours, when traditional public transit services are often limited. The goal of this new partnership is to “giv[e] Detroiters access to mobility and to see how this complements fixed routes”. The City has currently allocated funds to subsidize over 2,000 rides, at an average length per ride of 1.3 miles. The intended goal of this program is to analyze the usefulness of public transit as the primary shuttle, with ride-sharing programs like Lyft, Uber, and Via, and bike sharing programs, assisting travelers make it the “last mile” of their trip by means other than walking.

As cities continue to evaluate their own public transit needs, we are likely to see more public-private partnerships like Uber and Altamonte Springs, Via and Arlington, or Lyft and Detroit. In fact, it’s been a top priority of major ride-sharing companies to seek out such partnerships and show city officials the potential future of these partnerships. As cities continue to be hampered by shrinking budgets and more and more vocal constituents critical of public transit shortfalls, we are likely to see more and more of these partnerships evolve in the near future.

© 2020 Foley & Lardner LLP


About this Author

Christopher R. Boll, Foley Lardner, Transactional Lawyer, Securities Attorney

Christopher R. Boll is an associate with Foley & Lardner LLP, and a member of the Transactional & Securities Practice.

During law school, Mr. Boll interned with GE Capital and received the Henry Hubschman Fellowship at GE Capital Aviation Services. Before pursuing a legal career, Mr. Boll was an investment banking associate with Falls River Group, LLC, and IMAP, Inc., where he advised and consulted on joint ventures, acquisitions, mergers, and other strategic ventures in various industries and stages of corporate lifecycles. While...