Is Uber Considered Public Transportation? Rideshare vs Public Transport

Is Uber considered public transportation? The Town of Innisfil certainly thinks so and it appears they may not be alone.

Small towns are changing the way they offer public transit. Sometimes large scale transit projects are just not affordable, Uber can help fill that gap.

An “Uberisation” of public transportation is emerging in North America. Uber and other rideshare companies are challenging the traditional transit models.

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Uber Innisfil Transit

In the spring of 2017 Uber announced an interesting partnership with a small town in Canada. In the Town of Innisfil, Canada, located about an hour North of Toronto, rests a community of approximately 36,000 residents. They lacked any bus service and decided to explore the Uber vs public transportation debate.

Innisfil, Ontario uses Uber to fill out their public transportation network

Innisfil commissioned a study to see what the cost of a mere 1-2 buses would be to their bottom line. Given the smaller population, the town was concerned demand would not be high enough for bus service.

City staff recommended the new idea to council an the city explored the option for public transit. What was born was Uber Innisfil Transit

Riders would simply pay Uber Innisfil a flat rate for rides to various designated destinations within the town. The Town of Innisfil would then pay Uber the difference of the actual fare, thereby subsidizing the rides. 

People could also use Uber Innisfil to go to places other than the fixed travel points. The town would offer $5 towards the ride as long as it is within the geographical boundaries.

The town had initially found operating a 2 bus service would cost $439,000 and $541,000 to operate its first year. After 8 months, they had spent only $165,535 on the Uber Innisfil Transit rides.

Uberisation or Co-Existence with Public Transportation

The Uber vs public transportation experiment is not necessarily a winner take-all game. Uber may actually be able to co-exist with existing public transit infrastructure without completely wiping it out. Uberisation of public transport has taken over in Innisfil, but not so much in the rest of North America.

Uberisation Definitiona transition to an economic system where agents exchange under-utilised capacity of existing assets or human resources (typically through a website or software platform), while incurring only low transaction costs.

University of Toronto study looked at the examples of Uber and public transportation operating in the same urban areas. They were studying the impacts on the transit system in the United States.

The study found that Uber had actually increased public transportation ridership. Ridership was increased by 5% after two years of operating in these US cities. There were a couple of reasons why they thought this was happening. 

Current public transportation systems do not offer the rider a flexible schedule. Uber fills this gap so people can arrive where they need to go when the need to get there.

For instance, people may take the bus downtown to meet some friends for an evening out. They might decide to take an Uber home later in the night when there are fewer public transportation options available. 

They may also be more inclined to take an Uber to and from transit stations. Places where the walking distance may be too great or parking is expensive and scarce. This is the first-last-mile system that kicked off the Uberisation of public transportation in many areas.

Is Uber Considered Public Transportation?

This isn’t the only time Uber or other rideshare companies have partnered with towns. This “Uberisation” of public transportation first began to emerge in the US, initially as a first-last-mile project. This means cities were subsidizing the costs to get residents to train stations or bus terminals. 

In the town of Summit, New Jersey, commuters were driving to the train station and parking in the lot. As population and demand for parking increased, they needed to cut down on the overcrowding of the lots. They decided instead to try this first-last mile approach. They offered subsidized Uber rides for those using public transportation to get them to the station. This program saw more riders leaving their cars at home. 

In Canada, a similar example was tested with Kitchener-Waterloo rideshare company RideCo. The rideshare company struck a deal to shuttle people to the regional transit stations. You could schedule a ride in advance or request one on demand like you would an Uber ride.

Innisfil uses Uber as public transportation

In central Florida, Altamonte Springs adopted a city-wide subsidy model using Uber as public transportation, similar to Innisfil, Canada. They also have a first-last-mile system but the numbers pale in comparison with the city-wide service. 

After seeing the success of program of Uber in Altamonte Springs, neighbouring cities decided to try it as well. They also partnered together to subsidize rides going between their cities. This approach to Uber as a public transportation option crossing borders is a new and innovative model for regional transit. 

Uber vs Public Transportation

Innisfil and Altamonte Springs show that Uber can be considered public transportation. If Innisfil were to offer equivalent door-to-door bus transportation it would have cost them $8 million more the first year.

What makes these models worthwhile is that the routes and times are flexible for both the drivers and the passengers. These services act as an UberPool service subsidized by the government. Drivers follow a flexible route where they pick up additional passengers along the way. Making it much different than the taxi fare model or even the traditional passenger services offered by Uber and Lyft. 

Small towns everyone should look at the debate of Uber vs public transportation, particularly when the alternative is bus service. Small towns usually have a less dense population with a large car presence. The on-demand model provides savings for the municipality, fairly short wait times for riders and extra income options for drivers. They can look to the Uber Innisfil Transit success or the regional model sparked by the success in Altamonte Springs. 

So is Uber Public Transportation? It certainly is for some towns and it may be coming to a lot more soon.  


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