Payments Consulting Network Technical Director, David Lunt, caught up with Jonna Heikkinen – Transit Partnerships EMEA at UBER, to discuss how ride-share and public transport can complement each other within a customer-centric transport eco-system.

David was interested to understand how UBER is expanding public transport with on-demand ride-hailing solutions

How do you believe Uber can support an existing transit system?

Uber can support an existing transit system in various ways by providing solutions whenever there is a transport gap or a service disruption. We are lucky to have a strong public transport network in Europe, especially in urban areas, but the further we go from busy areas, small service gaps start occurring, especially in low-demand areas or times of the day.  In those cases, fixed public transport lines are not always the most appropriate solution due to low utilization and fixed costs associated with fixed public transport regardless of ridership.

Ride-hailing can be used as a complementary service that can connect riders with public transport infrastructure whenever it makes sense. Uber can be used as a first-last-mile solution in areas where public transport is not available or less accessible. This can also be used as part of a local demand-responsive transport (DRT) or paratransit service, giving transport agencies more flexibility in their service planning.  In this model, some public transport agencies have a fixed fleet of minibuses performing on-demand service as a core solution, but they also connect Uber to the service to handle overflow when demand spikes. This has enabled local authorities to maintain low ETAs regardless of demand spikes and decrease their operational costs during hours when the demand is lower. Public transport agencies are showing the way forward towards truly flexible DRT/paratransit solutions to serve the wider needs of the local communities.

Can you share some industry insights where this has worked in the past?

Uber is providing similar solutions to over 70 public transport agencies across the US, Canada, Australia, and we are now delivering similar solutions to Europe, the Middle East, and Africa. We have experience working with agencies of various sizes and we can support a variety of use cases public transport agencies may encounter while operating these types of services.

For example, in Texas, the Dallas Area Rapid Transit (DART), a multimodal agency comprising 13 suburban and rural cities, has been working with Uber since 2019 to provide complementary service. DART’s program utilizes 36 dedicated wheelchair-equipped minibuses and the Uber service. As of 2022, DART’s program services 32 unique DRT zones with ETAs of 15 minutes or less. 70% of their on-demand trips are provided with agency-supplied minibuses and 30% of the trips are provided through the partnership with Uber. This hybrid approach strengthens DART’s operations by adapting to constantly changing needs in a community that previously suffered from a lack of access to traditional public transportation with fixed transit routes. The hybrid model has been crucial for DART, allowing them to cost-effectively expand their services as the rides taken with Uber are typically only one-third the cost of dedicated DRT buses or low-density fixed route bus operations.

Is this solution only for large transit operators?

No, Uber’s solutions support transit agencies of various sizes. We have delivered our transit solutions to agencies in huge cities like New York City and Dallas, but also for low density rural areas such as Innisfil in Ontario, Canada and Kyle, Texas. In Europe, we recently launched a partnership in Klosterneuburg, Austria which is a suburb of Vienna with a population of 26,000. Local public transport is operated by an association of transit agencies in the eastern region of Austria (VOR) and a direct train to Vienna operates regularly during commute hours. However, at low demand times, the public transport network operates with limited bus lines at low frequency.

To compensate for the irregular bus schedules, Klosterneuburg is funding a city taxi program where a trip within the city’s geographic limit costs €5 flat at specific times.

In Innisfil, the local municipality suffered from the challenge of non-existent public transport networks and the fact that a traditional on-demand transit solution would have been too expensive for their budget. They worked with some local consultants to explore alternative, more innovative ways and found a possibility to partner with Uber. Since 2017, the partnership has helped Innisfil provide an on-demand service for local people without incurring high operational costs as the municipality only pays for actual trips completed under the local program without any additional fixed costs from vehicles, drivers, or technology. As a result, the average subsidy per trip in the Innisfil municipality has been less than $15.

What are the main challenges you see in a public / Uber partnership?

In the US, public transport agencies have already adapted to hybrid DRT and paratransit models. They have a ‘Rider’s Choice’ program which allows end-users to choose their preferred mode of transportation, including alternative ride solutions like Uber or taxis. This gives riders the flexibility to schedule rides as needed. They’ve been delivering excellent results for their riders for years with such a flexible approach. In Europe, similar models are still under development and require new thinking and pilots. Despite its positive results, ride-hailing hasn’t been used yet as part of the solution in European DRT and paratransit services. Public procurement processes focus on fixed fleets but don’t typically take into account what type of benefits and possibilities adding non-dedicated fleets as an option could deliver. This can be seen as a challenge for Europe but also as an opportunity. New technologies that are available today can help public transport agencies to build more flexibility into their services and bring them to the forefront of innovation.

When is the best time to consider an Uber partnership?

Public transport agencies should consider partnering with Uber in various scenarios, including adding complementary fleets to local DRT and paratransit projects (as described earlier), offering a first-last-mile solution from a bus or train station, connecting people to job centers, alleviating parking and traffic congestion, and addressing service disruption. Uber is also an effective solution for areas of lower demand.

Local authorities can quickly set up ride vouchers to be sent to their customers to ensure that their rides can continue regardless of a service outage. This improves customer satisfaction and provides assurance that a journey can continue even in the event of a bus breakdown. This gives people more confidence to rely on public transport and leave their cars at home.

How would a transport operator engage with Uber to see if a partnership would work for them?

Local authorities can add non-dedicated fleets as an option to their local DRT and paratransit tenders. Such rides can be used as needed without commitments to a certain number of trips. If they are still uncertain about how such a model could work for them, piloting is also an excellent option. Uber can help to set-up pilots quickly without high costs, even by setting up a closed service environment for certain customers inside the Uber application. Another option is to integrate Uber into the transit agency’s own application by utilizing our APIs and delivering a pilot through a local app. Uber empowers local authorities with transit technology to help everyone in their community thrive, from seniors with special needs to rural communities and the general public.  If you are interested to learn more, please get in touch with Uber via contract-transit@uber.com.

Author: David Lunt, Technical Director, Melbourne, Payments Consulting Network.

David Lunt has spent over 25 years working in the emerging payment technology space. He is globally recognised as a leader in payments combining a deep understanding of the payments industry with innovative technical expertise. Over his career, he has advised numerous FinTech startups, product vendors, high street retailers and global card schemes on how to adapt to emerging payment technologies and legislation.

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