Ride-hailing app seeks to expand into late-night service
MBTA OFFICIALS, ALREADY heartened by improvements in transportation for the handicapped by taxis and private ride-hailing companies, are entertaining a proposal from Lyft to launch late-night on-demand pick-ups that would be paid by passengers, employers, and the T.
Brian Shortsleeve, the CEO and acting general manager, said the transportation network company submitted an unsolicited offer that would cost the T an estimated $1.3 million a year for late-night service for workers. Under Lyft’s proposal, a rider would pay the first $2.75, the employer would pay $1, and the T would subsidize the reminder, estimated to be about $3.50 per ride based on 1,000 rides a night.
In one example, Shortsleeve showed members of the Fiscal and Management Control Board that a ride from Boston University to Dudley Square would cost an estimated $7.10, with the rider and his employer picking up $3.75 and the MBTA paying the remaining $3.35. In another example, if a worker took a Lyft from South Station to Malden Center, the cost would be about $9.61, with the T paying approximately $5.68 in subsidies.
The submission by Lyft is one of several unsolicited bids through the T’s “Innovation Proposal” program that seeks ideas form private vendors to start or privatize agency services. It comes on the heels of a similar proposal by Bridj, the on-demand bus company, to provide late-night service on some high-demand routes.
But the Lyft proposal is also separate from a pilot program both Lyft and Uber began earlier this year after the MBTA ended a pilot late night service for lack of customers and high cost. The transportation network companies offered temporary price reductions for riders after T service ended. But there has been a clamor to resume some sort of late-night service for workers who get out or start in the early morning.
The proposal also comes on the heel of promising data showing the MBTA is getting a bigger bang for its buck in a pilot program utilizing taxis and a more limited pilot involving ride-hailing services. According to data for the year, the budget for the paratransportation division is up about 10.3 percent over last year with The Ride, with a nearly 20 percent increase in costs, accounting for nearly the entire budget hike.
Reductions in costs for wages, materials, call center workers, as well as reduced subsidies for taxis and on-demand rides have saved the T about $2.6 million but the budget for The Ride service itself has risen about $5.4 million.
The average trip for The Ride costs the T $31 while the average subsidy for taxis under the pilot program was $13, with the rider paying $2 toward the cost. In the first two months of the pilot program with Uber and Lyft, the average trip cost $9.11, with a passenger paying $2, a 70 percent reduction in costs.
In addition, there was a 24 percent increase in ridership for paratransport using the private vendors, according to Ben Schutzman, the T’s Director of Transportation Innovation. Schutzman also said customers reported an “improved” experience with the private services.
Secretary of Transportation Stephanie Pollack hailed the performance and urged the T to continue to seek ways to shift ridership from The Ride to the lower-cost alternatives.
“Are there things we can do to encourage people” to utilize the private services, she asked.
Shutzman outlined several initiatives, including finding ways to utilize Uber’s ca-sharing UberPOOL; create campaigns to lure inactive customers who had been turned off by The Ride service; and pushing call center operators to find lowest-cost alternatives. But Shutzman also said costs still have to drop in other areas, such as the $13 subsidy and officials are eyeing increasing the $2 cost-share for riders.