On-demand services can’t scale successfully without massive government subsidies, and could obscure the impacts of car-centric sprawl.

As more cities opt for on-demand transit services, often labeled ‘microtransit,’ to supplement or even replace fixed-route transit, David Zipper highlights one major problem with relying too heavily on microtransit.
For Zipper, the surface benefits of microtransit are obvious. “The allure of cheap, responsive, door-to-door transit service is seductive, particularly for public leaders eager to ‘reimagine’ fixed-route bus service that fails to inspire.”
The hard part comes when public officials try to scale microtransit service without breaking their budget, limiting how many trips people can take, or morphing into something that looks a lot like fixed-route service.
Whereas fixed-route service offers economies of scale—“As long as empty bus seats are available, each new rider brings new revenue to the transit agency while incurring minimal added costs, thereby reducing the subsidy required for each trip”—“An increase in microtransit trips can quickly overwhelm the system’s capacity, in part because vans have only a handful of seats, but especially because passengers’ itineraries often do not overlap.”
Ultimately, the system doesn’t work as public transit without significant public subsidies. “In Los Angeles, for example, a microtransit ride costs passengers only $1, but each one receives a $42 subsidy.”
Additionally, Zipper notes, microtransit “shields people from the inefficiency of car-centric land use.” Ultimately, “For the sake of the planet, as well as efficiency, transportation should be more expensive in places that are difficult to access without a car.”
FULL STORY: On-Demand Microtransit Can’t Escape This Big Problem

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UCLA Lewis Center for Regional Policy Studies
Mpact (formerly Rail~Volution)
Chaddick Institute at DePaul University
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Great Falls Development Authority, Inc.
HUDs Office of Policy Development and Research