Ridesharing disrupted the transportation industry by providing on-demand app-based rides, both private and shared. This affected not only ridesharing services’ direct competitor, taxis, but also public transportation.
From 2019 to 2020, public transportation trips in the U.S. decreased by 53 percent due to the COVID-19 pandemic. Many people worked remotely following national stay-at-home orders.
While Uber trips declined during this period as well, they only decreased by 27 percent. And while neither public transportation nor Uber trips returned to pre-pandemic levels in 2021, Uber’s gains from 2020 to 2021 were higher than public transportation’s, a 27 percent increase versus a 5 percent increase.
||Number of unlinked passenger trips in U.S. public transit
||Number of Uber trips completed worldwide
Many people switched from public transportation to Ubers during the pandemic to limit their interactions with other passengers. Even though national stay-at-home orders have been lifted and President Joe Biden declared the pandemic “over” in September 2022, many people still choose Uber over public transportation.
Microtransit: On-Demand Public Transportation
Not everyone can afford rideshares, but many don’t have access to convenient public transportation like bus lines or light rails. That’s why a new form of transportation has emerged, an amalgamation of both rideshare services and public transportation: microtransit, otherwise known as on-demand public transportation.
Microtransit is a more affordable version of a rideshare service. It’s popular in suburban and rural areas, as well as smaller cities without larger public transportation infrastructures. Riders pay a fee to ride in a small van or shuttle, first waiting in a pickup spot and getting dropped off near their destination.7
While this industry is too new for substantial national data, transit agencies are running microtransit pilot programs in the following cities:
- Alameda-Contra Costa Transit District, California
- Austin, Texas
- Kansas City, Missouri
- Los Angeles, California
- Santa Clara County, California
We’re looking forward to seeing if and how microtransit disrupts the rideshare industry, just as rideshares disrupted taxis before it. That brings us to our next point.
The most recent data, which is from 2015, shows that in five large U.S. cities, taxis had an average utility rate of 43 percent, while UberX, the standard service Uber offers, had an average rate of 50 percent.
||Taxi utilization average rate across all drivers (percent of work hours with a passenger) in 2015
||UberX utilization average rate across all drivers (percent of work hours with a passenger) in 2015
|Los Angeles, California
|New York, New York
|San Francisco, California
However, while Uber may dominate in metropolises like Seattle, Washington, people who live in rural and suburban areas, disabled people, and people without smartphones still rely on traditional taxis, according to research from the American Economic Review.8