Lyft Shuttle routes in San Francisco Credit: Lyft

Across the country, as bus routes are increasingly overcrowded and delays have slowed commuters, private transit companies are providing another choice. Mark Hallenbeck, director of the Washington State Transportation Center, sees a market for private transit but says these companies will not replace the need public transit fulfills. Answers edited for length and clarity.

STB: How will private transit, such as Lyft Shuttle and Chariot, impact public transit?

MH: Modestly. Look at Microsoft, they’ve been running one (shuttle service) for years. They carry a lot of people, yet have you seen a reduction in transit to Microsoft? No, the 545 is wall-to-wall people.  

It doesn’t remove all the other transit needs. Chariot is basically a vanpool system. We have the biggest vanpool system in the country here and it’s cheaper to let Metro give you a van than to have Chariot run it for you. Vanpools work when you have enough people going from here to there, and starting at the same time. Maybe Lyft Shuttle and Chariot will hit that margin a little bit; “good for them,” will be my attitude. “Hooray, you can make a market out of it.” Great, is it going to make the E Line empty? No. It’s not even going to come close to replacing the need (for public transportation).

STB: How are they going to get a foothold in the market? Will they take just over the most profitable routes?

MH: They will take some of the people off of the profitable routes, but the profitable routes are still going to be full. Their goal is to make money. So if you’re trying to make money, you don’t really care that there’s a public service. If that public service is low-end, is there a market for people willing to pay for high-end services? That’s the bet that Lyft (and Chariot) are trying to make.

Look at housing costs: there are people who will happily pay money for a better experience. The downside of vanpools is, it’s a mediocre ride; the downside of the E-Line, D-Line or C-Line is, it’s a mediocre ride. Wouldn’t you like to be in a nice bus with good wi-fi and comfy seats? And maybe a reserved seat so you don’t have to stand in line in the rain in January? If you have the money, why not?

If you have the density — and Seattle is becoming more, more dense — these services start to potentially pencil [make economic sense]. But they’re only going to pencil in very specific markets; those markets are massive transit markets, which means 90 percent of you aren’t going to qualify very well for those Lyft (Shuttle) or Chariot trips.

They are only going to come once an hour, once a half-hour. The E-Line is going to come by every 3 minutes once we give them their own lane. So you’re going to decide, do I want to be on the schedule and get a comfy seat? Or do I want to just leave, and I don’t care about standing up, the bus is going to be here in three minutes?

STB: So is there money in this model? After all, Lyft is still being supporting by a little bit of venture capital money.

MH: A little bit! I’m not investing in Lyft, I’m not investing in Chariot. If rich Silicon Valley people or the Chinese want to put money into bikes all over the city, then put bikes all over the city. If you want to prove it works, come on down.

If you are really pricing Chariot to make money, the price differential between Chariot and Metro or Chariot and Sound Transit is going to be high enough that the average human being will take the cheaper ride. Particularly if their employer gives them a bus pass, and Metro is free or it’s their own money.

Now there will be days, just like HOT lanes are supposed to work, I need to get home, the kid has a baseball game. What’s $4 on those days? So there are times when I will pay for it, but do you want you to pay that every day?

Most people don’t want to pay for that higher end service. Take a look at the HOT lanes on I-405. It’s $0.25 and nobody will get into them — “It’s Saturday morning, I’m not paying another $0.25.” So take an extra 5 minutes.

STB: Do you see an upside to Lyft Shuttle and Chariot entering the market?

MH: To me, the good thing about Chariot is, it’s a real carpool. It’s multiple people. I’d even let Chariot go back in the HOV lane as it comes back to pick up the next group. Even though there is only the driver in it, Uber and Lyft with one person in it is not a carpool. They’re not removing vehicles, in fact, they’re adding travel and congestion to the city. But Chariot, come on down, you’re going to put 7 to 14 people in a vehicle, more power to you. Let me help.

10 Replies to “Private Transit: Q&A with Mark Hallenbeck”

  1. Good to see someone else pointing out that having an Uber/Lyft with the driver and one rider is not “ride share” or “car sharing” and it’s definitely not a form of “transit.” In fact, the driver had to deadhead to get to you, so the net occupancy (and actually occupancy once they go driverless) is effectively less than one–which is worse than a SOV as far as congestion! (Though it is better in terms of parking demand).

    1. I would like to see an open-source app and nonprofit backing service listing the availability of all the “rideshare” companies and taxi companies side by side, with a link to book any of them. Whether each company would still require an account to book with it or whether that’s also neutralized is a secondary issue. It’s ludicrous to install a different app for each company, and that leads to an unsavory form of lock-in because people are unlikely to install more than one or two or three apps. There are central trip planners listing multiple airlines, and now with stationless bikeshare you can pick up whichever company’s bike is in front of you (even if you need the company’s app+account to complete the booking). I hope that carshare/taxis evolve into something like this. Actually, I hope Metro arranges for last-mile taxis at bus-fare prices honoring transfers and ORCA, via a bulk discount with a company or something. And these should be in limited district-sized areas, which would minimize deadheading or serving only yuppie areas.

  2. “Take a look at the HOT lanes on I-405. It’s $0.25 and nobody will get into them — “It’s Saturday morning, I’m not paying another $0.25.” So take an extra 5 minutes.”

    The I-405 “HOT Lanes,” I think he means Express Toll Lanes, are free on the weekends. Or maybe he is referring the SR 167 HOT Lanes?

    Unlike the HOT Lanes, bus service in Seattle is likely under-priced and the city/county should run a few pilot projects on some Express Bus Routes to see what the willingness to pay is for more frequent services in the peak. I would easily pay another $3-$4 to have a spot (not even a seat) on a 17x or 18x without having to constantly be worried about it passing me by because it’s already full. If everyone payed $1.00 more for Express bus service would that cover the cost for a few more buses during peak periods or in the case of the 17/18x would it just push people to take the 40 or D line?

    Our peak period longest distance bus fare is $3.25…SF is going to be approaching $6.00 on TransBay soon and NY MTA is already up to $6.50. First Group is making a 10%+ margin after covering operating and maintenance costs on many of their franchise agreements on public transit in the UK and they are charging max rates of around $4.00 (depending on city). It seems like there should be some financial opportunities for public transit.

  3. Couple questions, Mark.

    1.Leaving aside loading zones, are you planning on taking advantage of the reserved lanes and signal pre-empt systems that public transit service will absolutely require from here on?

    2. Which union will represent your operating people? If it’s none, will be glad to see revival or a lapsed traditional business plan. A long history of transit cooperatives is long overdue to return.

    3. If your shareholders decide their money will be better spent on real estate speculation, will your passengers be allowed to ride to your next stop, or left beside the road to hitch-hike? Business plan I’ve seen work just fine for two health-car providers.

    But warning, Mark. Do that once, and nobody on your board will ever mop a single bus floor, let alone drive for, my co-op.


  4. Damn. DROVE for one of those Health Car(e) providers, just before it stopped being a co-op. At the time a van in the fleet was turning into the Exxon Valdez. Car, van, hybrid or catenary, for-profit or co-op, be sure you don’t defer maintenance.


  5. That 545 bus with “wall-to-wall people” is getting pushed out of the city (the new option mirrors the current 541, which uses smaller buses, runs less often, yet still often has open seats during rush hour). Seems like a prime opportunity for a private line since ST is cutting such an enormously popular route. I know I am going to be looking for faster alternatives (and driving more if there is not one – transferring in the U-dist adds 30+ minutes to my commute each way).

    1. You would need a 60-foot articulated bus to hold a busful of people. And you’d need a dozen of them to hold a substantial chunk of the 545 riders. And even more than that because these buses are supposed to be roomier than Metro’s and a seat for everyone. Which company is going to make that kind of investment?

      1. None of them are going to replace the current level of service. They would pick up a portion of the ST riders (specifically those who can afford to use it), while not having to care about everyone else; anyone poor or with special needs will be stuck with the extra travel time and inconvenience, and we are all going to be stuck with worse traffic. Not an ideal solution by any means, but if someone is looking to make a profit providing a private service, that seems like a prime opportunity (at least until the east side light rail opens).

  6. Mike, and Mr. Hallenbeck, might be good to talk with the private charter bus industry around Seattle. Because I think that any profit in private comfortable buses to compete with, I mean fill in for, ST Express is long since spoken for. Car sharing . Lyfft. Limousines. Boeing Field. I’ve lost track. What’s Twitter for “Conference Calls?”

    Pretty much like the years of excellent over-the-road service that Greyhound dropped (down a thundering crevice to the bottom of Hell) when the airlines deregulated. From my youth fare days, miss it as much as trains. Only provider with a responsible business plan to fill in ST Route 545 gaps is ST-something else. Have heard that Turkey has some excellent private intercity service, stewardesses and all.

    Seriously, maybe if we brought in some of these companies treating passengers exactly as they do back home….any doubt Greyhound could use some competition? Starting with excellent station restaurants called “Post Houses” that served real coffee and didn’t wrap food in plastic. Or serve plastic food.

    Anybody know what really funds that service now? Because back in the day when the average intercity bus passenger also bet on them, any dog in the sport would’ve ripped their country’s flag off today’s buses and torn it up all over the pre-Interstate highway map. Give it a shot, Mark. Maybe a grateful ghost will bring you your slippers.


  7. Why not let private transit operators like Chariot, corporate shuttles or UberPool/LyftLine into the HOT lanes free of charge? That’s one means of driving up average vehicle occupancy as well as relieving congestion.

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