Although the industry is less than ten years old, transportation network companies (TNCs) have upended the traditional role of public transit agencies and how they would deliver service as people increasingly have more on-demand options available. While the question of how TNCs impact transit ridership remains, transit agencies and TNCs have been increasingly collaborating, such as Bridj with the Kansas City Area Transportation Authority and Uber with Pinellas Suncoast Transit Authority in Florida. It also goes beyond technology companies: the District of Columbia government has partnered with local taxi companies to provide wheelchair-accessible same-day rides (compared to the 24-hour notice required for most paratransit services).

There are major ramifications for how these companies can impact the transit industry. They have been able to provide on-demand, real-time traveler information using complex algorithms and have become flexible alternatives to traditional fixed-route services, especially in areas with lower density areas with less transit options. Their appeal has been also come from lower prices compared to traditional taxis (although this aspect remains up for debate, as TNCs are also suported by private venture funding).

Eno’s Capital Convergence event brought together stakeholders actively involved in this space to learn about how it has been unfolding. While TNCs present opportunities for expanding mobility options, especially in areas with limited personal car ownership, this partnership model is still very new. Many questions remain, such as ensuring social equity in providing service. With that said, there are three issues that are worth considering now:

TNCs won’t replace traditional transit service

Given the popularity of TNCs, some experts predict that they can replace urban transit systems in many cities. However, the reality is that traditional public transportation services will need to continue to be a major part of urban mobility. First, buses and trains are the best ways to move around large quantities of people in dense areas. Even if everyone were in a shared vehicle, most cities would not be able to handle the increased demand for space on the roadways. Second, transit agencies and TNCs inherently serve different interests: transit agencies as serving the public interest and expanding mobility to all residents, while TNCs aiming to meet their bottom line. Contractual partnerships can help pair these goals together for the public good, but it is important to recognize the differing priorities.

Instead, partnerships with TNCs can be complementary to the existing network. Pilot programs have largely focused on addressing gaps in transit service delivery, especially in the first/last mile by facilitating access to transit, rather than entirely replacing routes. TNCs could also play a large role in improving on-demand paratransit service, but must address accessibility concerns those users require.

Partnerships can bring new ideas, new riders, and more data

Relationships with tech firms are a way to help transit agencies bring new ideas to an industry in need of innovation. Private companies, who have been using mobile applications to move people around cities, can identify barriers to ridership growth and introduce services into areas that were previously too difficult or expensive for the public sector to adequately serve. Along with the service, TNCs can help bring more data insight in to how people are moving around regions. Agencies can use this data to provides additional insights into how people use transit service overall, which would inform planning for long-term service.

The industry has yet to move beyond pilot projects

Although there is significant excitement about tech companies partnering with public agencies, none have moved beyond their initial pilot phase. As TNCs continue to mature, their costs and functions will likely change. Many early pilot programs have struggled to attract riders, and others have not been fully compliant with federal accessibility and equity regulations. Further, tech firms have expressed frustration with existing procurement processes, citing a slow and cumbersome process that does not mesh with their business model. These rules are usually relaxed for pilot programs, but agencies are a long way from adapting the procurement process for long-term relationships, which will need to balance the agility of the tech sector with the public-interest nature of these regulations.

TNCs represent a huge opportunity for public agencies. They are an efficient form of mobility and they are visible and feasible now. But there is still much work to be done before they are truly part of the transit network. Transit agencies partnering with these companies represent a shift in how public agencies approach their traditional role of being the only entity providing service.