New York City’s microtransit experiment

The MTA is looking into subsidizing shared ride-hail trips.
The MTA is looking into subsidizing shared ride-hail trips.
Jonathan Weiss/Shutterstock
The MTA is looking into subsidizing shared ride-hail trips.

New York City’s microtransit experiment

A proposed pilot would use fees from a fee on ride-hail apps to fund late-night ride-hail service in outer boroughs.
February 5, 2020

If you can’t beat ’em, join ’em. That seemed to be the position of the Metropolitan Transportation Authority earlier this week, when it announced a call for proposals from shared-service transportation companies for a new pilot program subsidizing ride-hail trips for far-flung outer borough riders during overnight hours. The program would look at connecting outer-borough riders to the subway in areas that are more than half a mile from the nearest subway stop and that have limited bus service.

So the MTA would subsidize shared ride-hail trips, presumably from companies such as Uber and Lyft, after the MTA has blamed those same companies for New York’s declines in transit ridership. This prompted hefty criticism from transit advocates who say that a lack of transit options should be solved with investments in more mass transit, not with subsidized car trips.

But the even greater irony to this proposal is that the money that would be used to subsidize shared outer-borough Uber, Lyft or Via rides during overnight hours would come from the revenue of the recently instituted congestion pricing surcharge on for-hire vehicle trips in Manhattan. Essentially, the effect of this pilot could be to redistribute ride-hail trips from congestion-heavy Manhattan to outer-borough transit deserts. 

The congestion pricing surcharge – a precursor to actual congestion pricing, which is slated to come to New York City next year – is a tax on for-hire vehicle rides south of 96th Street in Manhattan that went into effect last year. Trips in for-hire vehicles that you order with an app or phone call, including Uber and Lyft rides, have a surcharge of $2.75. For trips in taxicabs, it’s $2.50. And for trips in shared for-hire vehicles, like most Via rides, the surcharge is 75 cents.

Revenue from that tax is funneled into a fund approved in 2018 to help outer boroughs make transportation improvements – a concession outer-borough lawmakers negotiated as the state geared up to pass congestion pricing, which detractors said could disadvantage those in transit deserts who rely on cars to travel into Manhattan. Some of the potential uses for this $50 million Outer Borough Transportation Account that were originally discussed included additional bus service and Long Island Rail Road discounts. But if the MTA’s “Late Shift” ride-hail pilot program moves forward, the Outer Borough Transportation Account – which is funded by a tax on ride-hail trips in Manhattan – could be at least partially used to subsidize shared rides hailing. 

“Shared” is an important distinction. At first glance, using revenue from a tax on for-hire vehicle rides to fund more for-hire vehicle rides may seem contradictory. But according to the MTA’s RFP, the pilot would focus on subsidizing shared ride-hail trips to transit stations, and the congestion pricing surcharge heavily targets non-shared vIf you can’t beat ’em, join ’em. That seemed to be the position of the Metropolitan Transportation Authority earlier this week, when it announced a call for proposals from shared-service transportation companies for a new pilot program subsidizing ride-hail trips for far-flung outer borough riders during overnight hours. The program would look at connecting outer-borough riders to the subway in areas that are more than half a mile from the nearest subway stop and that have limited bus service.

ehicle trips. It would also be designed to subsidize those rides during overnight hours.

In response to the pilot proposal, transit advocates have come down hard on the prospect, asking why, for example, investments wouldn’t be made instead in opening up the commuter rail system for the price of a MetroCard swipe. “There are obviously choices to be made and this seems like an odd choice," former New York City Department of Transportation official Jon Orcutt – who now works for the advocacy group Bike New York – told Gothamist. “Do we need to be essentially subsidizing taxi trips in New York out of the transit budget?”

And while the Outer Borough Transportation Account was approved in 2018, there’s been little made public about how its funds will be distributed. Rachael Fauss, senior research analyst at the good government group Reinvent Albany, added that transparency remains an issue, pointing to a letter signed by advocacy groups asking that data on how those funds are used be made public. Fauss, too, said the obvious question to ask is why funding would be put towards shared ride-hail trips, and not something more core to the MTA’s work, like bus service. “In the interest of being innovative, you definitely ask the question when scarce MTA resources are going to outside vendors providing services that appear to even compete with what they do,” she said.

But proponents of this style of “microtransit” say that shared car rides could be uniquely suited to fill this transit gap, arguing that increased bus service late at night would be inefficient and potentially not cost-effective if buses were only transporting a handful of people who needed rides at that time. Companies like Via, Uber and Lyft have partnered with transit agencies in other cities. Via, for example, partners with the Los Angeles County Metropolitan Transportation Authority to route on-demand service to and from certain metro stations in Los Angeles. Lyft, meanwhile, has done something similar to what the MTA’s pilot would look like as well. The Washington Metropolitan Area Transportation Authority covers the first $3 of shared Lyft rides for riders commuting to or from work between midnight and 4am.

It’s not yet clear how much a potential MTA pilot would subsidize the cost of shared rides. The first phase of the “Late-Shift” program solicits proposals from transportation companies and will focus on analyzing the options for deploying a pilot in the outer boroughs. An MTA spokesperson told City & State that that phase would include looking at other cities where similar pilots have been tested in the past. There is a scenario in which the MTA studies the possibility, decides that it’s not viable for New York and the pilot doesn’t move forward.

The MTA also pointed out that the idea to look at this kind of microtransit service didn’t come from the authority itself, but from the state Legislature. The press release announcing the pilot RFP carried endorsements from state Sens. Diane Savino of Staten Island and Leroy Comrie of Queens, Assemblyman Charles Fall of Staten Island and Assembly Speaker Carl Heastie, who is from the Bronx. Of that group, only Comrie’s office commented on City & State’s question about the prospect of using the Outer Borough Transportation Account funds to invest in car trips rather than mass transit improvements. “Our understanding is that funding has not yet been finalized,” Comrie spokesman Andrew Taranto wrote in an email. “Sen. Comrie would like for the funding for the Late Shift pilot to come from general funds and for the outer borough account to fund enhancements to bus service.”

While much of the discussion over the pilot proposal has focused on the somewhat counterintuitive notion of the state funding ride-hail companies – which have been framed as enemies of public transit – others say that this pilot, if done correctly, could achieve the larger goal of increasing use of mass transit. “It says in the RFP, the goal is to increase ridership at certain transit stations and the term they use is ‘multimodal,’ so if they do design and run it right, and if the right companies bid, it really wouldn't be subsidizing Uber and Lyft, because it would be taking people to transit stations,” said Nicole Gelinas, a senior fellow at the Manhattan Institute. Gelinas added that the outcome would be conditional on a few caveats, like there actually being frequent late-night transit service at those stations. “If they do it right – which is always an 'if' with them – it would be encouraging transit use not discouraging it,” she said. 

Annie McDonough
Annie McDonough
is a tech and policy reporter at City & State.
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