Private Transit: Existing Services and Emerging Directions (2018)

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4There is a long history of private transit services in the United States. These services include long-established services such as private commuter buses and airporters, shared taxis, dollar vans, and jitneys that have operated for decades in many American cities. Over the past decade, technological advances that allow real-time ride-hailing, routing, tracking, and payment have ushered in a new generation of private transportation services: • In the densest urban markets, multi-rider variations on the tech-enabled, ridesourcing, or transportation network company (TNC) model (e.g., UberPool and Lyft Line), as well as larger vehicle “microtransit” services, have emerged. • In suburban areas across the country, public and private entities are partnering in a variety of ways to support transportation services that bridge the last mile from high-capacity public transit for customers and employees. Research Objective This report is intended to help inform public transit agencies, local governments and planning agencies, potential service operators and sponsors, and other stakeholders about private transit services and how they are addressing transportation needs in a variety of operating environ- ments. The report provides an overview and taxonomy of the private transit services that exist in the United States today, as well as some sense of their present scope, operating characteristics, and how they may affect the communities they operate in. Defining Private Transit Services This study addresses existing and emerging transportation services that are • Private: owned and operated by private entities or provided through public-private partner- ships with a substantial private contribution. • Commercial: provided as part of a commercial transaction rather than a voluntary arrange- ment, such as carpooling. • Transit-like: shared concurrently by strangers; providing intraregional trips; and available for regular, ongoing use. Other TCRP research projects have addressed private mobility services that are typically not shared, such as basic taxi and TNC services. While the shared versions of these services are treated within this report, these services as a whole are not within the scope of this research. In many communities, private transit has responded to a demand for services in specific mar- ket niches and, by doing so, provided early indicators of how transportation needs are changing. S E C T I O N 1 Introduction

Introduction 5 Private transit services are a component of the transportation demand management (TDM) programs of many jurisdictions and companies—consolidating riders into larger vehicles and often enhancing public transit by providing the last mile of many commutes. Research Approach This report entailed some three dozen interviews with topic experts, public agency repre- sentatives, and private transit service providers and sponsors, as well as a review of relevant regulations. Such an approach was essential since published information (regarding vehicles, routes, fare payment, schedules, technology, ridership, operating finances, and more) is generally not readily available for private transit services because large parts of the industry operate within private contractual relationships or as informal systems. Three case studies featured in this report examine how several jurisdictions have attempted to align private transit services with broader transportation goals while minimizing negative impacts. Since private transit services are market-driven and generally subject to fewer constraints, these services come and go more quickly than public transit services (often with short notice, and many times with little to no awareness of their advent or demise outside the communities they serve). Over the course of this research, several new services were announced, and other key actors dropped out of the market. For that reason, this report relies more on descriptive service types and less on service brands, although in the case of some newer service types the latter is unavoidable. Historical Overview Private Transit Before the Automobile Era At the time of jitney’s emergence in the early 20th century, most streetcar networks were pri- vate systems, often built by land speculators or electricity providers seeking to open new markets in growing cities, with the transportation services subsidized by the profits from those businesses. Nearly all transportation options in the United States before the middle of the 20th century were private; the public mass transit system we know today did not fully emerge until around 1970 (King 2014). The demise of private mass transit was caused by a combination of market forces, including a decline in the profitability of the businesses being used to subsidize many routes, federal policies that encouraged decentralized urban growth, and the increasing affordability and adoption of personal automobiles (Slater 1997). Despite their inviability as private services, however, robust systems of buses, trains, and streetcars remained fundamental elements of urban transporta- tion systems in cities large and small. Responding to concerns that the private market would no longer provide these essential services, public authorities, akin to utilities, were formed to acquire these transportation assets and own and operate public transit systems. Key civil rights responsibilities of public transit services were cemented in place with the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) of 1990. Flexible Transit-Like Modes and Pre-ADA “Paratransit” Private transit services never fully disappeared (Teal and Nemer 1986), and revived interest by the federal government in shared modes after the oil shocks of the 1970s led to several studies of these flexible modes, including the first major academic study of smaller transit services. In a 1974 study, Ronald Kirby and colleagues at the Urban Institute coined the term paratransit to refer to all “forms of intraurban passenger transportation which are available to the public, are distinct from conventional transit (scheduled bus and rail), and can operate over the highway

6 Private Transit: Existing Services and Emerging Directions and street system”(9). Today, this definition appears extremely broad, but at the time, there were fewer business models supporting this portion of the transit market. The Kirby report (1974) classified paratransit in three main categories: 1. Hire and reward services (daily and short-term car rental). 2. Hail and phone services (taxi, dial-a-ride, and jitney). 3. Prearranged ride-sharing services (carpool and subscription bus). Despite a period of increased attention and funding in the 1960s and 1970s on the part of the Urban Mass Transportation Administration (FTA’s pre-1991 incarnation) (Cervero 1997), these service types saw little uptake in larger cities, although public demand-responsive transit (DRT) services were in operation in many smaller U.S. cities by the late 1980s. Beyond the pub- licly funded DRT services, many small-scale private shared services existed as informal systems. Although some service providers operated completely outside the law, most were legal or quasi-legal operations that served niche geographic markets—low-income African-American neighborhoods especially. Suzuki (1985) described a variety of informal jitney systems, which he termed “vernacular cabs,” that had arisen in the African-American communities of several cities before the Civil Rights era and had survived in a variety of forms through the 1980s. This period also saw the emergence of shared services that focused on specific trip purposes. It was between the 1970s and 1990s, for example, that shared airport shuttles, or “airporters,” gained popularity. A Changing Perception of Paratransit in the ADA Era The passage of the Americans with Disabilities Act (ADA) in 1990 was a key moment for public DRT services. The ADA and subsequent rulemaking clarified that public transit agencies are responsible for providing comparable service to everyone within a transit agency’s service area, regardless of users’ mobility limitations or other disabilities—a critical distinction between public and private transportation services that remains. At the time of the ADA’s passage, the term paratransit was still generally understood to refer to the whole spectrum of flexible transit services. But as publicly provided, demand-responsive ser- vices became one of the main ways agencies fulfilled the ADA’s mandate, for many observers the term paratransit began to take on that meaning (Teal 2016). As the understanding of paratransit narrowed, more studies focused on the economics and business models of ADA paratransit rather than general-public DRT, whether publicly or privately operated (Klein et al. 1997). Modern DRT A considerable body of research has been conducted on DRT and “flexible transit” services, which are an important focus of the private transit market, but also fit into public transit agency portfolios. Despite the energy dedicated to ADA paratransit since the 1990s, general- public DRT (such as dial-a-ride) and other flexible services have been in continuous use by public agencies since the 1970s. Koffman (2004) summarized many of these public service models, finding that at least 50 North American transit systems ran “hybrid,” general-public DRT services that went beyond either dial-a-ride or ADA paratransit, as of 2004. Koffman identifies three primary applications of flexible transit (1): • Service to areas that are difficult to serve because of demographics, street networks, or com- munity preferences. • Service in low-demand periods, replacing all or part of a network. • Service for an entire small town, suburban area, or rural area.

Introduction 7 Teal and Becker (2011) echo the role of flexible and DRT services in lower density, lower- demand environments in their case study of Denver’s “family of services” approach. “Flex ser- vices are best because they don’t have to go where and when customers don’t want to go,” they reason (58, emphasis in original). Only traveling where customers want to go is, of course, also a benefit of some private transit services. The Denver experience also reveals that the ability to carefully control capacity and adjust service (by only deploying vehicles as needed) is an opera- tional advantage of flexible transit services. Teal and Becker’s paper focuses on suburban case studies, while another study examines the rural DRT market (Mattson 2017). Informal Networks and Commuter Shuttles Several studies of private transit have been completed in the last decade. Most of these studies focus on single service types and a specific geographic region: • Informal transit networks, for example, exist in many immigrant communities. New York City’s outer boroughs, Miami, and Hudson County, New Jersey, are thought to currently have the largest informal private transit networks in the United States (although Miami’s has not been formally studied since the early 1990s, and scope estimates for all three systems are very rough) (Cervero and Golub 2007, NJTPA 2011, Grabell 2013, Reiss 2014, King and Goldwyn, 2014, Goldwyn 2017). • Commuter shuttles received increasing attention starting in the early 2010s, particularly those serving large technology companies in the San Francisco Bay Area and around Seattle (Peterson 2012, Brown 2014). The Metropolitan Transportation Commission (MTC) and the Bay Area Council completed the first Bay Area Shuttle Census in 2016. The survey included both public and private services and defined shuttles as “regularly scheduled transportation services in large multi-passenger vehicles operating as either ‘last-mile’ connections or serv- ing longer routes between more distant parts of the Bay Area” (MTC 2016). This survey was the first attempt to systematically count and collect even basic information on the range of shuttle services operating in the region. Although the Shuttle Census was unable to capture every operator, the survey tallied 35 service providers that, combined, provided rides for 9.6 million passengers in 2014 [to put this figure in perspective, this is about 4% of the number of trips provided in 2014 by the San Francisco Municipal Transportation Authority (SFMTA), the region’s largest public transit provider]. Emerging Mobility Services A final area of literature relevant to private transit examines emerging mobility services and transport technologies. Two studies, TRB’s Special Report 319 (Committee for Review of Innovative Urban Mobility Services 2016) and TCRP Research Report 188 (Feigon and Murphy 2016), address a variety of emerging shared mobility services and provide descriptions of the new modes and business models, including several that are classified in this report as private transit services. Bruce Schaller’s study on TNC impacts in New York City (2017) touches on the issue of distinguishing requests for pooled TNC rides from rides that are actually shared. In many environments, private services meet demand in specific market niches; provide early indicators of how transportation needs are changing; and supplement, complement, and some- times compete with public transit. They are a component of the TDM strategies of many juris- dictions and companies. Regulatory frameworks are evolving to recognize new technologies and the business models they make possible, although not always at a pace that keeps up with the rapid advance of tech- nology or impacts of new operational models.