No buses, no problem. Some cities provide subsidized Uber rides amid pandemic

As cities cut bus and train service because of the coronavirus epidemic, Uber is trying to partner with them to fill in the gaps.

Uber has signed deals with seven public transit agencies to provide car rides along suspended routes or where service has been reduced. For Uber, the partnerships provide a little extra revenue, while for cities, it helps lower their costs because they don’t need to operate routes that now have few passengers.

Transit agencies that have signed on with Uber subsidize rides for people who need to make essential trips but are unable to take their normal bus or train rides because of service cuts. That means, in some cases, passengers get a free ride to where they are going in lieu of paying for a bus. While this may cost transit agencies more per rider, the overall cost is less because they’re operating fewer buses.

“Paying for 40 to 60 trips a night is much more cost-effective than having 17 buses running all night,” said Alice Bravo, director of transportation and public works for Miami-Dade County in Florida.

The service is the latest way Uber has worked with local transit authorities, a program the company started in 2015. Since then, it has teamed up with more than 30 agencies to provide subsidized rides to and from major bus and rail stations.

Both agencies that already had partnerships with Uber and agencies that had never worked with the company before are opting into the service amid the pandemic. The programs are expected to be temporary but may serve as a test-run for future services.

In addition to hurting public transit agencies, the pandemic has caused a significant drop in ridership for Uber. The company’s agreements with cities help it modestly increase its rides business while helping people get where they need to go during a difficult period. 

“We’ve just been ready to move quickly to help agencies as they’ve approached us during this period,” said David Reich, Uber’s head of transit. This is a nice moment to work together to solve really critical problems.”

Uber CEO Dara Khosrowshai may provide more details about its plans for mass transit during its first quarter earnings on Thursday. The company will also share with investors how much the pandemic has hurt company’s ride business, which has plummeted.

On Wednesday, because of the slowdown, Uber said it would cut 3,700 jobs.

In Miami-Dade, the Uber partnership started three weeks ago and is merely a test program along a handful of overnight bus routes. Free service is provided late at night starting midnight and lasts until 5 a.m.

When commuters need a ride, they can open the Uber app and enter a city voucher code, which will pay for the entire cost of the ride.

Bravo says its Uber partnership may extend beyond the area’s shelter-in-place order. Once the order is lifted, there will likely be an increase in riders, but capacity will be limited due to new safety measures on buses and trains.

Additionally, Miami-Dade’s agreement with Uber provides it with data about whether the partnership makes sense long-term. The agency is rethinking its bus routes, particularly those with the least ridership. In those areas, Uber could serve as the city’s transportation provider.

“This is an interesting experiment for that project,” Bravo said.

The Indianapolis public transit authority, IndyGo, started its pilot with Uber on April 23, giving people subsidized roundtrip rides to and from work. On May 1, it began charging $60, the same cost as a monthly bus pass, for a month’s worth of Uber rides, one roundtrip per day. The test is expected to end at the end of the month.

After that, the authority, which had never worked with Uber before, may partner with an outside company to provide rides to and from its bus stations as well as within areas where ridership is low.

“Uber can fill in those gaps,” said Inez Evans, president and CEO IndyGo, “That’s what we’re looking at right now.”

In addition to providing rides for cities, Uber has also previously added to its app the public transportation options that users have in various cities, and in some locations, provides tickets for those rides.

Uber says despite whether the partnerships may be short-lived, it’s hoping its service provides aid to those who need it most. Meanwhile, agencies welcome the assistance. 

“The external environment is changing, and we need to respond,” said Luis Montoya, chief planning officer at Des Moines Area Regional Transit Authority, which started on April 13 providing transit passengers rides through Uber. “Just having this extra tool was really helpful for us to make sure we could have continuity of service.”

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