Better Transit through On-Demand Tech?

By November 20, 2019 No Comments

Private transportation companies (PTCs) like Uber and Lyft offer convenient options to move around cities. But as these services have grown more popular, they’ve led to significant changes to individual travel patterns and urban transportation networks overall. Many of these changes are at odds with broader public policy goals, diverting riders from transit, cycling and walking, rather than reducing reliance on private automobiles.

Here in Toronto, there are an estimated 70,000 PTC vehicles operating on our city streets, carrying about 176,000 trips each day and adding to the city’s congestion, infrastructure costs and vehicle emissions. These services divert an estimated 20 million trips away from transit annually, and are expected to see significant growth in the coming years.

 Ahead of our upcoming Urban Innovation Cafe on ride-hailing, this post explores interventions to address the negative impacts of PTCs and potential solutions, including embracing on-demand technology to enhance mobility and support transit service, rather than work against them. 

For a deeper dive, join us for our event on December 3, where Ryerson researchers will come together with voices from the public and private sectors to explore how ride-hailing can be harnessed for good.

The Challenges

In the five years since UberX first launched in Toronto in 2014, PTCs have made waves in our city. A recent report by the City of Toronto’s Big Data Innovation Team and the University of Toronto’s Transportation Research Institute (UTTRI) outlined the impact of PTCs in Toronto and the challenges they bring. 

In this section, we discuss some of the City and UTTRI report’s most significant findings that illuminate the challenges PTCs pose in Toronto.

PTCs Are Popular

Among its key findings, the report found that Toronto’s PTC market is growing dramatically, with the number of trips increasing 180% from 62,200 per day in 2016 to 176,000 per day in 2018. This growth is expected to continue, based on patterns observed in other cities. For example, Chicago has seen consistent PTC trip growth, and PTCs have been operating there for three years longer than in Toronto. Today, Chicago sees about 330,400 PTC trips per day.

Size of PTC Markets in Other Jurisdictions. Source:

Average Daily PTC Trips, September 2016 – March 2019. Source:

Concentration and Congestion

According to City analysis, PTCs account for between 5% and 8% of overall daily traffic in Toronto’s downtown core. Yet travel times in this area do not appear to have been significantly impacted by growth in ride hailing. While PTC trips increased 96% from 83,800 daily trips in October 2017 to 164,000 daily trips March 2019, vehicle travel times increased only 4% in the morning peak and actually decreased by 1% in the afternoon peak. But in the long run, given how PTC trips are concentrated in geographic locations and at times of day when overall travel demand is high, some suspect that continued growth in PTC trips will lead to traffic congestion and other operational challenges to Toronto’s transportation network.

Empty Kilometres

Unlike a personal vehicle, PTCs add Vehicle Kilometres Travelled (VKTs) to our streets through both the distances travelled while carrying passengers (in-service trips), as well as the distances travelled while drivers search for passengers or travel to a passenger pick-up (“deadheading”). So VKTs from ride-hailing — and the associated air quality, carbon emissions and health implications — can be higher than those of private vehicles, which only add VKTs from origin to destination.

Curbside Competition

When picking up and dropping off passengers, PTCs compete for access to the curbside, a space already in high demand for transit boarding and alighting, cycling facilities, parking and loading. City of Toronto data shows that PTCs frequently pick up and drop off passengers in no-stopping zones and bike lanes, conflicting with other curbside uses. This is concerning not only for its impacts on congestion and traffic flow, but also due to the safety implications for more vulnerable road users that rely on curbside space for travel, crossing, and loading, as well as municipal cycling plans.

Reducing Transit Ridership

As ride-hailing gains popularity in Toronto, analysis shows that many riders are not just swapping a taxi trip for a PTC trip, but are actually using PTCs in place of more sustainable modes like transit, walking and biking. A survey conducted by the University of Toronto Transportation Research Institute (UTTRI) found that, for their most recent PTC trip, 49% of respondents would have otherwise taken transit, 33% would have taken a taxi, 18% would have driven or would not have made the trip, had PTCs not been an option. Looking at commuting trips alone, 58% of respondents would have taken transit and 20% would have taken a taxi. This indicates that ride-hailing is actually luring would-be transit riders, pedestrians, and cyclists away from those modes and towards auto travel.

The Second Choice Mode for the Most Recent Commuting PTC Trip (Revealed Preference). Source:

The Second Choice Mode for the Most Recent PTC Trip (Revealed Preference). Source:


Uneven Geographies

Overall, the City’s analysis shows that PTC trips are heavily concentrated in Toronto’s downtown core and at major transportation hubs, with 60% of all PTC trips taking place in Toronto and East York — areas that are already quite walkable and well-served by public transit. However, in areas outside the core, data shows an increasing share of weekday peak period trips (commuter trips) over Friday and Saturday evening trips (associated with nightlife and entertainment). This rapidly growing market for commuter trips in suburbs underserved by transit suggest that residents in these areas are turning to PTCs as an alternative to driving or transit on their daily commutes. 

The observed growth in PTC trips in the inner suburbs and the clear time savings (in many locations, transit alternatives take at least 70% longer than PTCs) point to a lack of viable, efficient transit options in these neighbourhoods, and raise important questions about equity and mobility. In Toronto’s suburbs, PTCs may be filling a gap left by a lack of transit options, and there may be opportunities to harness the benefits of PTCs to support and encourage transit ridership, rather than detract from it.

Comparison of Commuter Trips vs Friday/Saturday Night Trips, September 2018. Source:

The Solutions

So where do we go from here? PTC services are important to the daily travel patterns of many Torontonians, and the market is expected to grow. Recognizing the mounting challenges that PTCs pose for cities, how can municipalities harness the good while mitigating the bad?

Regulating PTCs

The City of Toronto recently updated its Vehicle-for-Hire Bylaw (originally established in 2016), which sets out the rules and regulations for taxis, limos and PTCs. But some say these regulations don’t do enough to ensure fairness between taxis and PTCs, or to reflect broader public policy goals to reduce reliance on private automobiles.

A recent report by the Ryerson Urban Analytics Institute (RUAI) highlighted the inequities in regulation between taxis and PTCs, and the ways in which these regulations fall short of supporting our goals to reduce emissions and encourage mode shift towards active transportation. For example, while the City of Toronto restricts the number of taxicab licenses to about 5,000, approximately 70,000 licenses have been issued for PTCs, which does not appear to align with the City’s goals to get people out of cars and onto transit. In 2018, New York City was the first to cap the number of ride-hailing vehicles operating on city streets by freezing the issuance of new licenses for services like Uber and Lyft. This was part of a larger effort to bring new regulations for for-hire vehicles into alignment with the taxi industry that included a $15 minimum wage and data sharing requirements. But Toronto still lacks a cap, and further discrepancies persist in the licensing, safety and fee requirements imposed on taxis compared to PTCs.

The RUAI report recommends that the City of Toronto harmonize regulations for taxis and other PTCs, and stresses the need to ensure that all vehicle-for-hire regulations support the City’s stated policy objectives to reduce congestion and vehicle emissions, support transit ridership, enhance road safety and meet Vision Zero objectives, and provide good employment opportunities for drivers.

Surcharges for PTCs

Along with regulations and licensing, taxation and surcharges are key tools that can be used to align PTC operations with public policy goals. Taxes can help cities recoup the significant public costs associated with private vehicles-for-hire operating on city streets, for example, congestion, vehicle emissions, curbside conflicts, road maintenance and the administration of the licensing itself.

Furthermore, as more residents swap transit rides for PTC trips, transit systems may lose out on ridership and associated user fees necessary to fund operations — a vicious cycle. Other cities are beginning to levy congestion charges and per-ride fees against ride hailing services, directing revenues towards transit and active transportation in an attempt to disrupt the cycle of declining ridership and revenues. 

Chicago applies a surcharge of $0.72 per ride to all transportation network company (TNC) trips. A $0.52 fee was enacted in 2015, with revenues going towards the City’s general fund, and a $0.15 increase was enacted in 2017, with revenues going directly to fund public transit — the first of its kind. Chicago’s fees are expected to bring in about $30 million annually.

In 2019, New York City adopted a congestion surcharge for all taxi/limos and TNCs entering Manhattan below 96th Street: $2.50 for taxis and $2.75 per ride for TNCs. The charge is expected to bring in about $400 million annually, with revenues directed towards the subway system.

San Francisco proposed a tax on transportation network companies (TNCs), which went to voters as a ballot question in November 2019 and, if approved, would go into effect in 2020 (the measure appears to have just surpassed the 2/3 margin required to pass). The plan would see a 3.25% tax on total fares for all TNCs, with discounted rates for shared rides (like UberPool) and electric vehicles. The tax is expected to generate between $30 and $35 million annually to fund transit improvements, with half of the revenue directed to the San Francisco City Transportation Authority and half to the Metro Transportation Authority.

These cities (and others) are imposing charges on PTCs as a way to curb congestion and support transit as a positive alternative. But some believe that PTCs and taxis should not be singled out. If a city’s goal is to decrease reliance on automobiles and encourage transit ridership and active transportation, then perhaps congestion and road pricing should apply to all vehicles on the road, not just to ride hailing.

Harnessing Ride-Hailing Technology 

While some North American cities are using regulations and surcharges to mitigate the negative impacts of ride hailing, others are looking to pick up on the positives: partnering with PTCs to support or supplement transit service while enhancing mobility and convenience for riders. The strategies are varied, as are the results.

PTCs as a Transit Substitute

In some smaller communities, where dispersed populations and low transit ridership make it infeasible to run a traditional bus service, governments are experimenting with PTC partnerships. In these cases, companies like Uber or Lyft are contracted by transit agencies to provide rides to residents at a reduced rate — as either a supplement to existing transit service or as a substitute for the entire transit system.

One of the most well-known examples is right here in Ontario, in the Town of Innisfil. In 2015, Innisfil contracted Uber to provide transit service to its 37,000 residents after determining that implementing a local bus service would be prohibitively expensive. With Uber serving as the public transit system itself, reduced fares attracted about 8,000 riders per month. But the service’s popularity has come at a cost: as ridership grows, so does the per-capita subsidy paid by the Town — the flipside of what typically happens when ridership increases on fixed-route bus and train service. As a result, Innisfil’s annual costs for the program have increased dramatically, and the Town has had to hike its rates and cap the number of trips to manage demand. The sustainability of this partnership is questionable, as are the overall social and environmental benefits of facilitating mobility via single-occupancy vehicles.

While some publicly-subsidized PTC services have proven popular with residents, examples to date show the financial and equity challenges they pose for cities. Furthermore, the trend of replacing transit with “dial-a-ride”-style PTC service has been criticized by advocates as “[no more] than a more expedited and abundant taxi system.” Transporting single passengers in personal vehicles doesn’t offer the environmental or efficiency benefits of mass transit, and as a result, replacing transit with PTC service may carry both higher financial costs and lower climate benefits for cities.

PTCs as a First- and Last-Mile Solution

Rather than servicing all origins and destinations within a community, some cities are leveraging PTCs as a first- and last-mile solution with the goal to strengthen transit, not substitute it. Transit agencies are experimenting with PTC partnerships to connect lower-density areas with major transit stations in an attempt to fill gaps where there is some demand but where fixed-route service may not be efficient or cost-effective.

In 2016, Pinellas County, Florida became the first transit authority to partner with Uber, subsidizing first- and last-mile rides to existing transit stations after discontinuing two low-performing bus routes. Initially, the “Direct Connect” program subsidized the first $3 of any Uber trip from an area without existing bus service to a nearby bus station, and was eventually expanded to connect to 24 transit-connected locations at a discount of up to $5 per ride. But ridership was slow to build, and it’s unclear if the behavioural barrier of transferring from an Uber to a bus will continue to hamper ridership growth. On the other hand, if ridership does increase significantly, the cost of the public subsidy may surpass the cost savings of the discontinued bus services.

In a similar experiment, in 2016 the Denver suburb of Centennial, Colorado launched a partnership with Lyft and Via Colorado to provide residents within a 3.75 square mile radius free rides to the Dry Creek light rail station serving the Denver Regional Transportation District. Ridership at the station increased by over 10% during the program’s pilot, but ultimately, the project was ended a year later due to the mounting cost of providing accessible vehicles and service, which surpassed the city’s traditional call-a-ride service.

Other cities are aiming to enhance these first- and last-mile partnerships by focusing on pooled rides. Pooled PTC services — like UberPool and LyftLine — match riders with similar routes and destinations together in a single vehicle, often a van or mini-bus. Adding more passengers to a trip reduces the per-trip VKT and can lessen the financial and environmental burden of PTC travel.


Microtransit has emerged somewhere between single-rider PTCs and fixed-route bus services. Unlike PTCs that move riders from any origin to any destination, microtransit typically offers on-demand shuttle-like service with a built-in degree of flexibility to deviate from fixed routes or zones and to coordinate “stations” that respond to rider demand in real time. While informal jitney networks have long been present in cities across the globe, smartphones and algorithms have made this new type of on-demand microtransit possible – allowing routing to be optimized in real-time.

There is optimism about microtransit’s potential to reduce single-occupancy vehicles on the road, respond to the transit needs of hard-to-service geographies (like airports and corporate business parks), and integrate with existing transit service. And as evidenced by the many experiments taking place across the US and Canada, microtransit can take many forms. In some cases, like San Francisco’s controversial (and now defunct) Leap and Chariot, microtransit is offered as a high end, private transportation service for specific demographics and destinations, and an alternative to existing public transit. This raises concern over private microtransit services competing with public transit, pulling riders towards a higher-cost, “boutique” mobility option — and potentially leading to a tailspin of lost transit ridership and revenues (along with obvious equity issues). Furthermore, routing the ridership may not ultimately may not be efficient enough to offer real benefits over personal vehicle travel. 

In other cases, microtransit is delivered in partnership with a municipality or transit authority either to augment or serve as the public transit system itself, with vehicles branded with the transit agency’s logo and rides offered at rates comparable to existing transit. One much-publicized example is that of Kansas City, Missouri, which embarked upon a major microtransit pilot project in 2016 in partnership with microtransit start-up Bridj. The one-year pilot used a fleet of 10 14-passenger Ford vans – co-branded by Kansas City Area Transportation Authority and Bridj – to augment existing transit. The vans were dynamically routed in real-time to allow riders to input their trip request via the Bridj and access their destinations at a cost of only $1.50 per ride (and the first 10 trips for free). But despite the low user fee, the program failed to attract users, and its ridership statistics were extremely low: six months into the pilot, only 597 rides had been made in total — not even close to the program’s target of 200 rides per day, and translating into a public cost of over $1,000 per ride. The service faced a number of challenges in this low-density city, including very low initial transit ridership and a lack of public awareness of the pilot. Furthermore, surveys indicated that users did not find the service to be particularly convenient or its coverage sufficiently extensive, while others raised concerns that the app-based service was not accessible for low-income populations. The Kansas City pilot ended after one year, and shortly after, Bridj ceased operations entirely. 

Some microtransit experiments in other cities similarly collapsed as a result of low ridership, while others are still in operation, like on-demand transit company Via’s ongoing partnerships with West Sacramento, California and Arlington, Texas, and their recently launched first- and last-mile partnership with Los Angeles Metro. This program provides a service connecting residents to three existing rail transit stations at a discounted rate. Riders use the Via app or call to book one of three to six seats in a shared vehicle that is dynamically routed using Via’s algorithms, with trips either beginning or ending at one of the three designated Metro stations. Riders can request a wheelchair-accessible vehicle, and can pay using their transit pass or a debit/credit card. The service just launched in January 2019, but partners are hopeful that it will continue to attract riders to LA’s fixed-route transit lines.

By focusing on pooled rides in vans or mini-buses, microtransit has the potential to cut down on total VKTs, but the sustainability of  heavy public subsidies required to finance city-wide operations at a user fee accessible to everyday riders still remains to be seen, as does the ability of these services to attract strong and sustained ridership.

On-Demand Technology for Transit 

Rather than contracting out services to PTCs, some municipalities are seeking to harness the on-demand technology itself to improve service on existing transit lines, in existing transit vehicles. The ability to add pick-up and drop-off spots and formulate the most efficient routes in real time is now being tested by a number of transit agencies through partnerships that provide access to the proprietary pooling technology developed by some PTCs. The hope is that allowing existing transit vehicles – like city buses – to be more dynamic and responsive to user needs by deviating from fixed routes can serve more people more cost-effectively in low-density areas.

In 2018, Belleville, Ontario piloted an app-based solution to enable riders to request and schedule trips on one late-night bus route, transforming this fixed transit route into an on-demand transit service. The enabling technology was developed and provided by Pantonium and included an app that allowed users to book trips and the routing provided to the driver. Essentially, the pilot brought the conventional fixed-route bus service closer to a pooled ride-hailing experience. Analysis by Ryerson’s Laboratory of Innovations in Transportation (LiTrans) showed that the system performed well overall, and the pilot resulted in a sizable increase in ridership over the traditional bus service. 

Examples like Belleville’s show how using on-demand technologies and ride-hailing algorithms to adapt existing transit infrastructure has the potential to provide a higher level of service to riders and improve the competitiveness of transit against ride-hailing services dependent on private automobiles. 

What’s Next

Cities across Canada and the United States are struggling to adapt to the dramatic changes that PTCs have brought over the course of just a few short years, and with varying degrees of success. Some cities, like Vancouver, which pushed back against PTCs for years and only opened up applications for licensing this fall, have the benefit of hindsight when developing regulations and policies to manage the impacts of PTCs support transit ridership. Other cities like Toronto have had to follow the lead of the algorithms and adapt in real-time. Reflecting on the successes and hiccups of other cities’ approaches – from capping to congestion taxes to using the best of the technology to fuel transit service – should inform programs and regulations aimed at using ride-hailing to achieve broader public policy goals towards reduced auto-reliance, increased public transit, exceptional mobility options, and a safe and healthy transportation network.

Icons courtesy The Noun Project, by (in order of appearance): throwaway icons, Ivonne Coto, b farias, Edwin PM, Jenie Tomboc, Deemak Daksina, Jamison Wieser.