Market Overview

City Buses As Last-Mile Solution—The Past Or Future?

City Buses As Last-Mile Solution—The Past Or Future?

Bus ridership is waning. If you've been to a major urban area lately where ride-hailing and microbolity options abound, this may come as no surprise. 

Cities need buses not only to lessen the congestion and pollution brought on by car ownership and the surplus of rideshare drivers, but to provide a dependable service for people with disabilities, lower incomes or no smartphones. 

As options expand and ridership declines, so do the funds for bus upkeep. And while air quality and carbon footprint issues concern the transit authorities and city officials, they require a hefty up-front cost.  

There are more affordable final mile options now — e-scooters, e-bikes, e-bicycles and ridesharing apps like Uber Technologies Inc (NYSE: UBER) and Lyft Inc (NASDAQ: LYFT). These ridesharing options, however, increase the number of privately owned vehicles on the road, which increases the amount of air pollution, as well as the riding time for bus travelers. 

"From 2010 to 2016 … traffic congestion rose 30% in New York City, 14% in London and 9% in both Beijing and Paris," McKinsey reported.

This increase of traffic make micro-mobility options, like e-scooters and e-bikes, more attractive to the impatient or environmentally concerned traveler. The National Association of City Transportation Officials reported that in 2018, people took 84 million rides in micro-mobility modes. 

Mckinsey suggests that the solution lies in improving existing bus networks. If buses are competing with on-demand mobility modes, then bus networks too need to meet the demand of their riders. 

A variety of tactics could be employed. In Stockholm, for instance, buses are given preferential treatment to go first at stoplights. Buses could integrate more real-time updates via mobile apps or certain lanes could be designated as bus lanes. 

Just this week, the city of Toronto and the Toronto Transit Commision (TTC) has potentially cut labor costs by piloting an automated electric shuttle, which will be supervised, at least primarily, by human drivers. This project started when Torontonians admitted their unwillingness to walk 15 minutes to the bus stop in frigid temperatures. This new robot shuttle will make Toronto bus history by connecting the West Ruge neighborhood with the Rouge Hill bus station. 

Last week, Chicago joined Boston, Denver and London in Uber's experiment to connect users to public transportation options by using the Uber app. Uber wants to shift its mission from just providing rides to providing intel for all transportation needs. 

These are cities that depend on public transportation. In Denver, residents are able to purchase transit tickets on the Uber app. 

"You really have to have all the riders' best options for getting where they need to go, including options that might not be Uber options," said David Reich, Uber's head of transit. "In a lot of situations, public transit is faster or cheaper than taking an Uber, and we want to make sure that our riders have access to that information."

While Uber may be positioning this as a gesture toward increasing the use of public transportation, there may be another motive. Most of the time, short trips aren't profitable for Uber drivers, which makes this a win-win for Uber and public transportation. 

WalletHub just came out with a list of 2019's Best and Worst Cities for Public Transportation. The list was created based on a study of the commuters who use public transportation, the age of the fleet, the hours spent in congested traffic and the number of injuries. 

The best cities, starting with the best, are Seattle, Boston, Washington, DC, San Francisco and Madison, WI. 

The worst cities, starting with the worst, are Indianapolis, St. Petersburg and Tampa, FL, Charlotte, NC, and New Orleans. 

Seventh on the list is New York City, with 5,700 buses transporting 760 million people around the city each year. The American Public Transportation Association says that "every $1 invested in public transportation generates $4 in economic returns" and "a total of 87% of trips on public transit have a direct impact on the local economy." 

Public transportation networks have a longer and more tired history navigating public and private red tape than their on-demand mobility competitors. It's imperative that these systems innovate for the improvement of congestion and their viability as a last-mile option.

Image Sourced from Google

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