Ride-hailing apps are killing taxis. Is public transit next?

Cars heading north on 16th Street wait to cross Walnut Street.

SEPTA’s 64 bus was already 20 minutes behind schedule when Jonas Maciunas pulled out his phone and stood with a finger poised over the Uber app. It was a frigid night and his wife, Victoria, was 29 weeks pregnant. As far as Maciunas could tell from SEPTA’s own app, the bus hadn’t even left its starting point at Pier 70. With a quick tap, he could summon a car and be home before the bus reached their stop at Eighth and Washington.

Maciunas, an urban planner and self-described transit geek, held back. It wasn’t the cost of the Uber ride, which he could easily afford. “We’re stubborn people,” he said, “and we wanted to be able to tell people how long we waited.”

SEPTA may have kept the couple as customers that night, but plenty of other transit riders are already voting with their fingers. After years of impressive increases, transit ridership tumbled by 6.3 percent last fiscal year on SEPTA and PATCO -- and that was before the Silverliner fiasco on SEPTA’s Regional Rail. Though the evidence is still circumstantial, many believe ride-hailing apps like Uber and Lyft are responsible for spiriting them away.

Philadelphia is hardly the only place where people are opting to pay more for the convenience and reliability of ride-hailing. In 2016, transit ridership fell in 24 out of 30 major U.S. cities, the Federal Transit Administration reported. In that same period, the two private services saw their passenger trips grow exponentially. Other factors, like falling gas prices, probably contributed to transit’s poor showing. But as Erik Johanson, SEPTA’s director of innovation, told me, even if “the declines are not entirely due to ride-hailing, they’re correlated.”

The implications for cities couldn’t be more profound. If Uber and Lyft continue to siphon market share from transit agencies, it could weaken public systems, leading to a destructive cycle of service reductions and further declines in ridership. Meanwhile, cities will grow more congested as on-demand vehicles clog the streets.

Of course, people with money will always be able to pay a premium for the private services, in much the same way that they can now choose FedEx or UPS over the United States Postal Service. “The big worry is that transit becomes the last option for the poor,” said Bruce Schaller, a New York transit consultant.

Although the impact of Uber and Lyft on the traditional taxi industry has been well-documented, there is surprisingly little hard data on how much business they’re taking from transit. Because New York City requires companies to submit their trip information, Schaller was able to undertake the first comprehensive analysis. His conclusion was unequivocal: “The growth of on-demand services is working to undercut the essential role of mass transit.”

Schaller also found that the popularity of Uber and Lyft is adding to the traffic congestion in Manhattan and the densest parts of Brooklyn and Queens. Many people think of ride-hailing as a form of mass transit, but on-demand vehicles occupy just as much street space as private cars and hold the same number of people. The big advantage is that they require less street space for parking because they're always roving.

Johanson said he was not surprised by Schaller’s results. Philadelphia is also seeing more congestion in Center City, especially on Chestnut and Walnut Streets. SEPTA’s on-time performance fell slightly last year, and he blames congestion.

Those delays make it harder for transit to compete.  Uber and Lyft drivers can always change course to avoid the jams, but buses have to stick to their routes. It's frustrating for riders not to know when the bus or train might arrive.

In many ways, transit agencies have only themselves to blame for many of their problems. Like the taxi industry in the days before Uber and Lyft came along, transit agencies are not particularly responsive to customer needs. SEPTA, in particular, has stuck to many of its old habits, even as smartphones and the gig economy have changed the way people move around the city.

Just compare the experience of buying a SEPTA Key card with ordering Uber or Lyft. All you have to do is tap your smartphone to summon one of their cars. The app tells you exactly how many minutes it will take before your ride arrives and how much the trip will cost. Then you can sit back and watch the little car icon move through the streets of Philadelphia.

Acquiring SEPTA’s new Key card isn’t so simple. When I went to buy my Travel Wallet at the 11th Street station, the SEPTA attendant insisted the cards weren’t being sold there. Because a colleague had already acquired a card there, I persevered. After half a dozen tries on two machines, I finally walked away with a pretty turquoise card. I can accept that new technology always starts with some kinks, but what kind of company rolls out a new product without training its staff?

Unlike Uber and Lyft, SEPTA’s card readers don’t tell you what your trip cost or how much money is left on your card after each trip. You’re supposed to be able to find out from SEPTA’s website. But after I registered my card online, the site refused to acknowledge my existence. This could be my bad luck, but I’ve heard similar complaints about the site from others.

Competition from ride-hailing forced taxis to step up their game. SEPTA needs to do the same. Fortunately, there are plenty of low-cost tweaks the agency can make to improve service.

Improving travel times is key, said Dick Voith, a transportation expert for Econsult. SEPTA is the only big-city transit system in the country where buses stop at every corner. If SEPTA skipped every other block, it would speed up trips dramatically. Introducing back-door boarding would also reduce delays.

SEPTA could also win riders and make its system friendlier by scrapping its much-hated $1 transfer fee. It's unfair to bus riders, who tend to be poorer. When fares go up to $2.50 July 1,  a two-bus ride will cost $3.50 -- only slightly less than what I've paid to take an Uber pool ride across Center City.

It took almost eight years for SEPTA to replace its tokens with its Key card, but in many ways, it is a 20th-century technology. Voith said the agency needs to let people pay with their phones. And while they’re at it, there should be accurate real-time information about the location of its buses on those phones.

Changing its culture won't be easy, but unless SEPTA matches the customer-friendly approach of Uber and Lyft, people like Maciunas are going to have a hard time resisting the urge to summon a car.