The Benefits of Microtransit

Microtransit is a flexible transit service that bridges the gap between individual private transportation and public mass transit. It is a demand-response service that uses existing buses, paratransit vehicles, passenger vans, and cutaways enabled by various mobile technologies. Rides are scheduled through a smartphone app, traditional phone, or website.

The goal of microtransit is to expand the geographic and demographic reach within a network by serving populations that are low-density, low-income, and lacking other reliable transportation options. Microtransit service providers strive to complement existing transit services. Many microtransit services are dedicated to the first and last mile to provide riders transportation to and from public transit stations.

Microtransit is proven to decrease traffic congestion, spur economic development, and reduce the amount of air pollution. Some of the additional ways microtransit benefits transit agencies and riders are:

  • Cost-effectiveness: Alternate service for low-performing routes and off-peak hours
  • Increased service coverage: Agencies can reach underserved areas without dedicating a regular service
  • Flexible service: Flexible hours to accommodate shift workers and those who work during off-peak hours
  • Equitable and Economical: Inclusive services that maximize the use of resources by facilitating paratransit and conventional riders traveling together in the same vehicles
  • Efficient: Riders are picked up and dropped off at common locations to reduce travel times

The Federal Transit Administration (FTA) allowed formula funds to be used toward microtransit projects in 2016 upon recognizing microtransit as public transportation. However, this option is only available to transit agencies or cities that receive federal formula funds, and many smaller transit agencies and towns do not typically receive formula funds.  

Many other transit agencies use a private provider to operate the microtransit service, which is sometimes called a “turnkey” solution or “transportation as a service (TaaS).” In this service, agencies could apply the FTA’s “capital cost of contracting” policy and receive up to 80% match for half of a turnkey contract’s cost. The remaining half of the contract is treated as an operational cost in small urban and rural communities and could receive up to 50% in federal matching funds.

Over the past few years, the U.S. Department of Transportation has launched several innovative grant programs to assist transit agencies and cities across the United States in experimenting with new technology. Some of these programs are listed as follows:

  • Integrated Mobility Program (IMI), named initially Mobility Demand (MOD) Sandbox Program
  • Accelerating Innovative Mobility (AIM) grant
  • Congestion Mitigation and Air Quality Improvement Program (CMAQ)
  • Advanced Transportation Technologies & Innovative Mobility (ATTIMD)
  • Infrastructure and Investment Jobs Act (IIJA)
  • Carbon Reduction Formula Program
  • Rural Surface Transportation Program
  • Congestion Relief Program

A community that receives federal funding must find local match funds to finance its projects fully. Federal funding accounts for 16.5% of overall public transit funding, while state funding accounts for another 21.2%. Some states offer transportation grants specifically for innovative transit services, while many other grant programs focus on policy objectives, such as increasing access to jobs and reducing greenhouse gas emissions. Local funding accounts for 62.3% of transportation funding in the United States. Local sources include local partnerships, local government budgets, transit fares, and ballot measures.

Public transportation is essential in every community, predominantly rural areas, where many community residents may need access to public transportation and may be unable to drive or afford a vehicle. Many underperforming bus systems can improve service utilization and reduce costs by switching to on-demand service. Rural cities and transit agencies can invest in a system that replaces unproductive fixed routes and creates transportation access for rural residents.

Overall, microtransit has been successful because it allows cities and agencies to create equitable access to public transportation for all communities. As microtransit services continue to increase, transit agencies will need to determine how microtransit can enhance their public transportation services by helping them achieve their overall goals. Sain is exploring microtransit as a possible solution to the unserved and underserved rural communities in Alabama as a part of our rural transportation studies. Sain’s goal is to provide equitable recommendations to address the current rural transportation service gaps and improve mobility in rural communities.