All across the world, when governments fail to provide public goods, the private sector tries to take on the mantle and make it profitable.
Microtransit is one of the latest innovations to try this. With the goal of solving public transportation’s deficiencies, users crowdsource minibus and van rides by requesting rides on their phone, much like uberPool or Lyft Line. The app then uses its algorithm to find the best route to serve the most amount of people.
Although the technology is new, private minibuses filling the transportation void isn’t. Cities across the developing world rely on informal transportation networks – think jitneys or any modes that operate outside the “official” network – to move their growing populations everyday.
Similar to microtransit, informal transportation routes are constantly changing in accordance to change in demand. They fill gaps in the formal transportation network, solving the “first and last mile problem” – microtransit’s aspiration.
“In technical fields like transportation, we often think knowledge transfer runs from the first world to the third world,” writes Robert Cervero, a professor of city and regional planning at UC Berkeley. But, as Cervero continues, this part of the world holds many lessons for us – and for microtransit in particular.
Turning a profit
Here’s one major thing that microtransit and informal transportation networks have in common: both seek to be profitable, but the latter often is.
A 2016 case study of five cities in India revealed that informal transportation is almost always profitable. Because vehicles are often driver-owned or rented by drivers personally, drivers take all of the fares they make home. This incentivizes drivers to pick the best routes and maximize the amount of riders they carry.
Meanwhile, microtransit is struggling for profitability. The start-up Bridj folded after only three years in Kansas City. Chariot was ordered to temporarily suspend operations in California after its drivers were discovered to lack the necessary licenses. Uber, the Goliath of the industry, is famously unprofitable.
Unlike informal transportation, drivers of Ubers and the like don’t typically have much of a direct stake in the success of the company. Because Uber and Lyft drivers own their vehicles and set their hours, they’re incentivized to drive more. But Uber and Lyft keep 20 to 25 percent of each fare, reducing the amount of money drivers take home.
Too much traffic
But the desire for profit doesn’t always produce the best transportation networks: competition between minibus operators sometimes leads to unsafe driving practices and underinvestment in vehicle maintenance, as well as dramatically increasing congestion.
According to UN Habitat, informal transportation networks are a major cause of congestion in developing cities. This is because minibuses and vans, while they can carry more people in less space than cars, just aren’t as efficient people-movers as full-sized buses. You need more minibuses than full-sized buses to carry the same amount of people. And competition leads to oversupply, filling the streets with more minibuses than necessary.
Microtransit might also increase congestion. A study from UC Davis found that Uber and Lyft are diverting trips from transit, and hence potentially increasing vehicular traffic.
This congestion is actually an advantage for some informal transit operators, though. Motorcyclists in Ghana’s capital, Accra, turn large profits by speeding backseat passengers through traffic.
Click here to read the full article: https://mobilitylab.org/2018/03/06/u-s-microtransit-learn-lot-unofficial-transportation-developing-world/