The Potential of Microtransit Shuttle Services — Part 2
This is the second part of my post on the research I conducted concerning microtransit services. For an overview of the concept and the inherent advantages of microtransit services please start with part 1.
Part 2 is a review of microtransit services in Korea and the US. It also includes my opinion on the difficulties faced by these services and the different types of routing methods that I’ve observed in my research.
Bear in mind that I am a UX designer and I am approaching the subject on a conceptual level, nothing technical.
Microtransit Case Studies
To further investigate if what I theorized in the first part of this post is really happening in the market and to understand what determines the success or failure of a microtransit service, I looked into researching some existing services in Korea and the US.
Summary of Case Studies
Call Bus
A shuttle pooling service in Seoul, Korea that was restricted to operate in the Gangnam area at late night hours.
Description
iOS/Android
Operation hours were limited to 11PM~4AM and riders who requested trips to similar regions were automatically grouped and pooled to the same shuttle bus. It is the only Korean Microtransit service that used a real-time system for matching riders to shuttles upon request.
Obstacles
Seoul City and the Ministry of Transportation restricted the operation to only pickups around the Gangnam Subway Station during late night hours due to the opposition by taxi unions. With the limited service region and operation hours, the scale of demand for the service was restricted, limiting the potential for the service to create a healthier network of demand. After a few months of operation, Callbus eventually discontinued its on-demand microtransit service and has now created an auctioning/bidding platform that connects users to private shuttle operators for one-time shuttle trip reservations.
Everyone’s Shuttle
A Korean crowdsourcing shuttle platform that connects users with similar stops and arrival times on weekdays to rent a scheduled shuttle on a monthly basis.
Description
Web Only
A microtransit service that terms itself as a “Crowdsourcing” shuttle platform for people’s daily commute to work. The crowdsourcing process is executed in batches and multiple approval stages are necessary before final confirmation of a shuttle to operate a commute route. The trips are limited to single or round trips, meaning you can only use it for commute travel once a day at a designated pickup time.
Obstacles
The entire operation of routing trips and recruiting riders is executed manually by the operation team. There are also long wait times needed to recruit enough riders to approve operating a route. Communication is done via SMS and phone calls by the operation team to confirm riders who express interest in using a route. The shuttle routes are fixed after it’s final approval, making it a very rigid manual system with limited scalability.
Poolus
A Korean version of Uber X without any actual pooling options between users (just pooling with the driver).
Description
iOS/Android
A carpooling service that used a legal loophole where carpooling for pay was only permitted when drivers are commuting to their respective place of work.
Obstacles
Although Poolus was operating legally through the legal loophole, Seoul City eventually heeded the protests of taxi unions and made the service illegal when the service just started to gain traction. Due to the restrictive operation hours (commute hours) and legal issues, Poolus wasn’t able to operate in its full capacity and the company was eventually liquidated due to low profitability.
Chariot
The earlier US version of Everyone’s Shuttle in Korea.
Description
iOS/Android
A service with a similar model as “Everyone’s Shuttle”, Chariot was a crowdsourcing platform for shuttles with fixed routes that were determined by user demand on the platform. Compared to “Everyone’s Shuttle”, Chariot had a more efficient semi-automated crowdsourcing process with regular scheduled operation of routes throughout the day (not single trips like the Korean version).
Obstacles
With fixed scheduled operation of the routes, the operation times were not really crowdsourced, leading to low ridership at certain hours. Furthermore, crowdsourcing user requests in batches to determine fixed routes is a slow and rigid method that is not flexible enough to address irregular realtime trip demand, preventing it from becoming a general transportation solution for people’s daily needs. Although Chariot was acquired by Ford Motors 2 years ago, it discontinued its services in early 2019.
Bridj
A data-driven realtime shuttle pooling service with limited operations in the US and Australia.
Description
iOS/Android
A microtransit service that used big data and user trip data in order to more effectively estimate demand in the region. Bridj also used realtime ride grouping and dynamic routing to address realtime trip demand in a more efficient and scalable way. Bridj seemed to be the only microtransit startup that used local community data to estimate demand and select high potential regions/routes for operation.
Obstacles
With limited awareness and a small service region, I am assuming that the scale of demand was too restrictive for it to sustain its pilot operations in Kansas City. Toyota also canceled its plans to invest in the startup, leading it to discontinue its operation in the US due to financial difficulty. Bridj is currently operating in Australia with the same concept and system in a limited region.
Summary of Analysis
Factors Leading to Failure
After researching these cases, I realized that although the concept of microtransit services may seem convincing, creating and operating such a service is a completely different story that entails many other variables that determine the success of a microtransit service.
Just looking at the track record above, 4 out of 5 of these services were discontinued. Below are some of the key obstacles or causes that I found to be relevant in determining their failure.
- Inaccurate Demand Estimation leading to Poor Route Selection and Low Ridership
- Ineffective Targeted Marketing leading to Insufficient Demand and Awareness
- Limited Service Region leading to Restricted Service Growth
- Unscalable Operation Methods leading to High Costs and Limited Expansion
- Low Cost Effectiveness and Low Ridership leading to Financial Difficulties
Although cost-effectiveness, efficient operation and sufficient demand are all factors necessary for the success of any product or service, there are a few factors specific to microtransit that make it a more challenging market.
Firstly, selecting the right region with accurate trip demand forecasts (by time, region etc) is essential for microtransit services to be able to minimize the risks of low ridership and financial loss. This is especially true in view of the high fixed costs and regulatory approval needed to start a microtransit service in a new region.
Secondly, especially in Korea, legal restrictions seemed to be the biggest obstacle that limited the scale of demand needed to create a healthy network of demand for sustainable growth. Especially with a fleet of relatively costlier shuttles in operation and cheaper fares than taxis, it would be difficult to stay afloat when demand is restricted by region and operation hours.
Finally, the realtime ability to group trip requests and automatically route multiple trips is a capability that is necessary for microtransit services to become scalable and consistently meet users’ transportation needs. With only 2 of the 5 startups researched above coming close to being able to group riders/trips with real-time routing, it is a difficult but necessary feature to make a microtransit business operatable.
Routing Methods
In relation to the final point above, I organized some of the routing methods that I came across while researching these services. Although they are not in technical detail, the visualizations should help you understand the importance of routing solutions and the varying levels of flexibility that affects the routing method’s ability to provide rides that are close to door to door trips.
- Fixed Stops with Scheduled Fixed Routes
What public mass transit buses do (they stop at all stops) - Fixed Stops with Reservation Based Scheduled Fixed Routes
What chariot does with the added efficiency of passing by stops - Fixed Stops with Reservation Based Flexible Routing
What city mapper rides seemed to do. Basically chariot but re-routing to not even pass by stops without a reservation - Conditional Stops with Reservation Based Flexible Routing
Something like Uber Pool with stops being provided as close to the rider as possible but under certain conditions (e.g. by main roads) - Door to Door Stops with Reservation Based Flexible Routing
Door to door pickup like regular car/taxi hailing services, but just with a bigger car with more people
I cannot stress it enough. Flexible routing is a must for microtransit services to be more cost effective and smarter than public buses. Operating fixed scheduled routes with fixed stops would be a complete waste of money for shuttle services.
Between the three types of stops, fixed, conditional and door to door, I personally believe that actual door to door stops is not appropriate for microtransit services as there has to be some level of centralization (just less than public buses) to make the service cost effective and affordable for users. If shuttles were being operated for actual door to door pickup, it would essentially be the same as a regular 4 seater taxi, just with a bigger and costlier car. This leads to choosing between the remaining fixed and conditional stops.
If you are opting for the fixed designation of stops, the network of stops has to be dense and thorough enough to minimize the walking distances of riders as much as possible while making sure the selected stops are appropriate for shuttle operation.
If you are going with the conditional method, you have to gain access to accurate data on the condition of roads and make sure that the conditional stops are appropriate, safe, and close enough for the rider.
Fixed stops are the slow but sure method and the conditional method is the faster but slightly more expensive and riskier method that could lead to low ridership. It's a matter of finding that balance.
Personal Opinion
During my research last year, I don’t know why, but I did not include Lyft or Uber’s endeavor into the field of ride pooling, maybe because both services are unavailable in Korea and they used regular vehicles with a maximum of 4 riders (not actual shuttles or vans).
And I remember later thinking to myself, how exciting would it be if Uber were to create a microtransit service? But they already did two years ago with Uber Express Pool! Uber even started a new service called Uber Bus in Egypt late last year!
Without access to Uber’s pooling services in Korea, I resorted to looking into user reviews of Uber Express Pool and I found that a lot of users were complaining about having to walk more than their usual rides. Many drivers were also disgruntled by riders comparing Express Pool to other more convenient but pricier Uber options.
There are definite pros and cons to pooling users with bigger vehicles, especially when users are familiar with hailing services that are setting the standard in terms of convenient tech-driven mobility services.
But I still genuinely hope that one day there would be a cheaper, faster and more convenient option to public buses with a lively network of demand that makes operating a microtransit service feasible because I still believe that it has the potential to address an unmet demand for something between buses and taxis.
Microtransit does not only make mass transit more efficient, but it also has the potential to reduce congestion and pollution. And this is a form of transportation that government organizations should be knowledgeable of and actively create the space and opportunity for companies to demonstrate the potential of alternative modes of transportation.
Conclusion
To wrap things up, the following is a summary of the key points made between parts 1 and 2 of this post.
- Shuttles have the potential to provide a mode of transportation that is cheaper than taxis but faster and more convenient than buses, somewhere in the middle.
- Microtransit services need to effectively forecast regional demand, select service regions with high potential, and raise awareness about its presence to gain a healthy network of trip demand.
- Microtransit services need to create a scalable operation system with automated routing and ride grouping on a realtime basis to become scalable.
- Routing methods need to be flexible and efficient enough to reduce travel time and user walking distances in order to provide the added user benefit compared to other modes of mass transit.
- Legal restrictions have to be more relaxed to give microtransit services the opportunity to gain a strong foothold in their respective service regions and maintain their operations.
Hope you enjoyed this medium post and please let me know if you have any questions, want to discuss or are interested in hiring me 😉.
