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.