This op-ed was published in the Toronto Star on March 29, 2021.
Ontario Transportation Minister Caroline Mulroney delivered a clear message to Mayor John Tory last August: for Toronto to receive emergency TTC funding in the wake of Covid-19, it must investigate replacing some bus routes by subsidized Uber rides. Now a new paper has done that investigation, and it shows that Uber is not fit for the job. What’s odd is that the report comes from Uber itself.
Uber wrote “Transit Horizons: Toward a New Model of Public Transportation” to pitch its services to transit agencies everywhere, but with a strong focus on the USA. The basic argument goes like this: the cost of a scheduled bus route is fixed, no matter how many riders it carries. Meanwhile, the cost of running an Uber service is variable: fewer rides mean lower costs. So, while buses are efficient at high ridership levels, the report claims, Uber shows its value at low ridership levels.
The obvious next question is: “what is the ridership below which Uber becomes more efficient?” Based on an analysis of unnamed American cities, Uber answers that “ridesharing is not a good substitute… on bus routes with … more than 10 passengers per hour” [p 23].
What does this mean for Toronto? Local transit expert Steve Munro has put together a list of TTC bus routes sorted by riders per vehicle hour (before Covid) and it shows that, out of the 170 or so routes in Toronto, the number running fewer than 10 passengers per hour is… zero. By its own numbers, Uber is not a viable partner for the TTC, and that’s before all the other problems with the service—safety, labour standards, responsibility when things go wrong. Maybe John Tory can just send the report to Caroline Mulroney.
To make Uber’s case even worse, its paper probably overestimates the point at which its service becomes competitive.
Uber uses UberPool prices as the cost of providing service. UberPool is the service where you may have to share a ride with someone else, and maybe go out of your way to pick them up, in return for a cheaper fare than the normal UberX.
But every indication is that, even before it was put on ice because of Covid, UberPool has been losing even more money than the rest of Uber. To attract riders, the company has had to subsidize UberPool heavily. Contrary to the promise of the “sharing economy” Uber talked about a few years ago, people usually don’t like to share a car seat with strangers: the more likely a ride is to have more than one passenger, the more subsidy Uber has to supply.
In other words, the “UberPool price” underestimates the true cost of a ride and there seems to be no case that “microtransit” provides a cost-effective alternative to running buses, even on Toronto’s least busy routes.
I admit I found that conclusion surprising. I imagine many of us have watched a nearly-empty bus drive by and wondered if that is really the “Better Way”. But it turns out that, as transit expert Jarret Walker wrote: about 70% of the total cost of operations for most transit systems is not the bus, it’s the driver. And even in the best case, Ubers drive empty about half the time, waiting for a call or on the way to pick up a passenger. An empty Uber is just not as visible as an empty bus.
Why would Uber produce a paper that argues against its own interests? I suspect it’s interested mainly in American cities, where bus systems are often subsidized more heavily than Toronto, and where very-low-ridership routes are more common. Once the paper produced numbers the company can use in the USA, it published them without thinking about Canada.
Even if Uber could make an economic case, a partnership would be a deal with the devil for the TTC. In its public filing, Uber did not talk about partnership with public transit, it claimed that it can replace public transportation “one use case at a time”, and one careless whitepaper does not change that. Uber is offering cities a Trojan Horse. We should be thankful that its high price tag should stop it from being a serious temptation.