Subsidizing Transportation Network Companies to Support Commutes by Rail

We explore how rail transit’s first- and last-mile issue might be addressed by partnering with transportation network companies (TNCs) like Uber and Lyft. The goal is to lure high-income commuters to shift from cars to TNCs and rail. We also explore how rail and TNC partnerships can improve travel for low-income commuters who currently rely on low-frequency bus service. We parametrically test subsidizing TNC fares for feeder services in the San Francisco Bay Area in an idealized fashion. Inputs such as the residents’ value of time and vehicle ownership were taken from various local data sources. The communities that were selected for our study are served to different degrees by the BART rail system. We found that the optimal policy must be tailored to the characteristics of the community it serves. In dense, walkable communities with strong bus service near rail stations, TNC subsidies should be targeted to less-accessible neighborhoods and low-income commuters to not compete with bus transit and active modes like walking. For lower-density communities with limited dedicated bus feeder service, TNC subsidization can be applied more broadly, although disincentives, like increasing rail parking fees, must be considered carefully, because they can induce commuters to drive directly to work instead. We conclude with a discussion of how subsidies might be covered by reallocating existing resources in different ways.