(Updates in ninth paragraph that Chariot resumes Bay Area operations on Monday.)
Los Angeles, the U.S. capital of cars and congestion, is working to rapidly improve its transit system and create new options that can lure drivers out of their vehicles. That includes offering ride-hailing services such as Uber, Lyft and Ford’s Chariot and others a chance to help design a “MicroTransit” system to complement existing bus and rail lines.
Starting Oct. 25 the Los Angeles County Metropolitan Transportation Authority will accept proposals for a pilot project in which vans circulate through different zones rather than operate on fixed routes, to pick up passengers at “virtual” bus stops within minutes of being summoned. Similar to Uber and Lyft in approach, the goal is to transport multiple riders, especially in areas that aren’t well served by existing bus lines or need better options to get to rail stations, Joshua Schank, Chief Innovation Officer for the transit agency, told Forbes.
Though the microtransit idea has been tried before elsewhere, notably in Helsinki, Finland, and Kansas City where it ultimately didn’t succeed, “this is going to be the biggest, boldest attempt we’ve seen,” Schank said. A key difference will be that Los Angeles intends to give companies a free hand in the design of the service and the flexibility to modify it.
“We're the experts in making sure this service is accessible to everybody, that it's affordable, that it meets our standards for wages,” he said. “The private sector is better at figuring out how to design the service in a way that will allow it to be financially sustainable.”
Like other big U.S. cities fighting ever-worsening traffic and commuting headaches, Los Angeles, is turning to technology, AI-enabled data platforms and new services in that battle – along with expanding its light rail and subway lines. It’s got the benefit of considerable funding to do that: a successful 2016 ballot measure is to provide $120 billion from county sales taxes over the next few decades. There's also some urgency to transform urban mobility options before the Summer Olympics return to the city in 2028.
The MicroTransit pilot is to launch in 2018, ideally operated and serviced by LA Metro staff. Uber, Lyft, Chariot and essentially "every other" transportation service company attended an Aug. 29 meeting about the project and many are expected to submit proposals, Schank said.
Rides would be cheaper alternative to taking a ride with Uber or Lyft, but will likely require "a premier fare above what Metro charges for its services," Schank said in a conference call Monday. A budget for the pilot hasn't been set. "We don’t know how much we’re going to be spending on this yet because we have to wait and see what people come up with," he said.
Uber and Lyft didn’t respond to requests for comment about their interest in the program. Both have multi-passenger service experience through their UberPool and Lyft Line offerings, as does New York-based Via. A Chariot official said the company is in close communication with LA Metro and "very" interested in the microtransit pilot.
Bought by Ford in 2016, Chariot might seem particularly well-suited to provide the service Los Angeles seeks since unlike Uber and Lyft it operates its own fleet of on-demand vans in the San Francisco Bay Area. It's also expanding in Seattle, New York and Austin, Texas, and has said Los Angeles is among the future markets its targeting.
Chariot’s ability to operate in California was suspended this month after it apparently failed California Highway Patrol vehicle inspections, according to a report by the San Francisco Business Journal. Chariot notified San Francisco-area customers early Monday that its vans will resume service later in the day.
"We've resolved the situation and do not expect any future interruptions. Thank you so much for your patience, and for all your support during this time," the company told its riders via email.
Separately, a recent report by the University of California, Davis found that Uber and Lyft have hurt ridership on public transit services in recent years, though the Los Angeles program is an attempt to adapt the best aspects of what they do.
“We're trying to figure how to work with these folks in a way that improves transit patronage and increases the number of people in multiple occupancy vehicles,” Schank said. “If we draw new customers that will be a win. If we improve service for our existing customers, that will be a win as well.”
While Uber, Lyft and other “transportation network companies” aren’t making money, “they are flooding the market with a dramatically underpriced service that is having this impact in many cases of increasing congestion and increasing pollution and not necessarily improving mobility,” Schank said.
“Our job is to improve mobility, and the thought is that by bringing the best of the public sector together with the best of the private sector, we can do that.”
