Overcoming obstacles in on-demand public-private agreements

The recent rise of “mobility on demand” services like Uber and Zipcar has shifted society’s understanding of transportation systems and how they operate.

“Mobility has evolved in the past 10 to 15 years from a binary choice,” Justin Holmes of Zipcar explained at this month’s TransportationCamp DC. “An accordion of choice has opened for consumers.”

Governments, advocates, and communities are responding by experimenting with their relationships to these services to ensure that on-demand options work with transportation networks to benefit public mobility. To determine how to make these relationships more mutually beneficial and flexible, a panel consisting of members from the business, government, and nonprofit sectors dug into this recent evolution of public-private partnerships.

How best to partner?

A key conversation now, according to Colin Hughes of the Institute for Transportation and Development Policy, is how the right private partnerships can contribute to the public good through increased mobility, and what types of agreements cities should encourage.

Understanding the importance and dynamics of these partnerships, Melissa McMahon of Arlington County Commuter Services, explained that her bureau seeks solutions in how not just to provide transit, but how to connect people to it – an area in which on-demand companies can play a key role. As a result, cities can ensure that they create “a legitimate foundation for working with private companies to ensure they serve the public.”

This public role, for many companies, fits with their ultimate business goals. Car2Go’s Walter Rosenkranz emphasized, “Public transit should always be the backbone of mobility.” Companies like Car2Go serve as an extension to those systems, seeing the most success in markets with strong connections to mass transportation.

Darnell Grisby, of the American Public Transportation Association, pointed out that what helps partnerships work is that cities provide access to companies as an incentive to accelerate growth, at which point they can potentially expand service and connect more people.

The nature of public-private agreements moves public projects in this direction, suggested Uber’s Andrew Salzberg. He described the partnerships as problem-oriented, allowing companies to collaborate with cities to address their communities’ needs. As their relationships evolve, though, stakeholders should “go back to first principles,” focusing on the core issues of increasing access to transportation without increasing vehicle miles traveled.

Many sides don’t see eye-to-eye yet

In light of this experimentation, governments and cities are still figuring out how to have relationships with on-demand services.

One impediment to these partnerships, McMahon noted, is a lack of trust between private companies and communities. Residents can generally count on public-transit services, like buses or subways, to stick around in the long-term, but there has been mixed success with getting providers to continue operating in areas that need an option but may not generate profit.

As McMahon put it, while the neighborhood will always exist, “it might not make sense for a business to stay five years later,” potentially leaving communities without essential connections to main transit corridors.

Rosenkranz addressed this when pressed about Car2Go’s recent service suspensions in San Diego and Minneapolis-St. Paul. Because it “did not see enough adoption to-date to continue,” he said, the carsharing service withdrew from those cities.

In a move based more on principle, Uber and Lyft suspended service in Austin, Texas, after citizens voted to uphold legislation requiring fingerprint checks on potential drivers. Consumers lost one transportation option, and had to get creative in implementing their own replacement services.

Rosenkranz and Salzberg reminded the group that private companies do react to low-demand conditions, which could cause them to leave certain markets. From the perspective of affected communities, the companies only appear to care about profit, and not local needs for transportation access. It’s a narrative that private services will have to change in order to build trust and grow in these markets.

Salzberg emphasized that companies and cities want the same outcome: fewer people driving alone. The best approach, then, is for governments to “shape policies for anybody to plug into,” and then providers can move in to fulfill these goals.

In this sense, according to Hughes, the government could become the “platform” for which companies extend transit services. Through this technology-based lens, governments might focus on their goals for the transportation, that creates a foundation for mobility services to provide the means of effectively addressing community needs.

Partnerships are working towards mutual benefits

Ultimately, speakers made the argument that companies and governments can help each other – and therefore communities – to develop more connected and accessible transportation. They generally agreed that governments, as Hughes mentioned, can create the space where companies provide the necessary flexibility to adapt systems to public needs.

Cities are beginning to see this in progress, as private entities partner with transit agencies to provide services from fare collection to paratransit.

APTA’s own research suggests services like Uber and Lyft are contributing to transit ridership, a nod to how the definition of public transit is changing. In addition, the release of Uber Movement’s traffic data, and similar collaborations that may follow, suggests the beginning of better-integrated partnerships that will allow both parties to better understand their environment and work together.

Photo: Three car2go SmartCars in Seattle (SDOT Photos, Flickr, Creative Commons).

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