Since Uber was founded almost a decade ago, the ride-hailing service has pushed its way into dozens of countries and dramatically altered how people get around major cities all over the globe.

But it’s the company’s foray into a small Ontario town that has put it and services like it at the forefront of what could be revolutionary development in Canadian public transit.

Last May, Innisfil, a town of about 36,000 just south of Barrie, began partnering with the ride-hailing company on a new service designed to serve as an alternative to traditional public transit.

Under the program, instead of implementing fixed-route bus lines, the town decided to subsidize Uber rides for its residents. People using the service pay a flat fare of between $3 and $5 for trips to or from one of the list of set destinations like the Town Hall area and the Barrie South GO station, or get $5 off their fare for journeys elsewhere in the town. Riders are often paired with others heading in the same direction through the company’s UberPool service.

According to Mayor Gord Wauchope, the partnership, which is the first of its kind in Canada, has saved the local government hundreds of thousands of dollars while ensuring residents have greater access to transportation than bus lines would have provided.

“For us it’s a great way to operate a transit system here for the present time,” Wauchope said.

“It would have been quite expensive using the regular transit system.”

Innisfil has roughly the same land area as Mississauga but only one-20th its population. According to a report by town staff, two bus lines would have cost $610,000 a year and, Wauchope argued, they would have only served residents who lived within walking distance of the routes.

The door-to-door Uber program cost just $165,535 over its first eight months, and roughly 3,400 residents took more than 26,700 trips using the service.

In March, the city and Uber announced the program was so successful they were expanding it by adding two more flat-rate destinations.

Uber has more than 35 partnerships with public transit agencies across the world, including in Boston, Massachusetts, and Pinellas County, Fla., according to the company.

What differentiates Innisfil is its small size and the fact the ride-hailing program stands in for, rather than supplements, a traditional municipal transit system.

“We’re proud of the partnership,” said Xavier Van Chau, the public affairs lead for the company’s Canadian operations.

“We’re looking at more and more ways we can partner for public transit in Canada. Fundamentally we believe that public transit and ride-sharing are complementary, that together we can get people out of their personal cars.”

Larger Canadian cities are considering following Innisfil’s lead. Calgary intends to launch a pilot of subsidized ride-hailing or taxi service this year.

Councillor Shane Keating, who has backed the proposal, said it could be the perfect solution for improving transportation options in Calgary’s sprawling suburbs.

“We’ve got communities that are just developing. The residential base there probably isn’t quite (dense enough for conventional public transportation), yet they need some sort of transit service,” Keating said.

The councillor predicted the idea might also work in more established neighbourhoods that have high transit demand only during the morning and evening rush hours. The city could run buses during busy periods and then subsidize ride-hailing during off-peak times, he suggested.

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“We should be saving money by not running a bus on a continual basis.”

Toronto has also been looking into the idea. In 2016, the board of the Toronto Transit Commission voted to study a pilot that would deploy taxis or ride-hailing services to provide on-demand transportation in some parts of the city. The agency is expecting to bring a report back to the board in the first half of this year.

But despite the seeming momentum behind such partnerships, Yonah Freemark, a transit expert and doctoral student in city planning at the Massachusetts Institute of Technology, warns there are risks on relying on ride-hailing companies to meet residents’ transportation needs.

He points to the fact Uber had reported losses of $4.5 billion (U.S.) last year. He said the company is “being propped up by very significant venture capital investments” and “we don’t know how long the cheap prices that are provided by Uber and Lyft and other ride-hailing companies will last.”

“I would say this is concerning for cities that are relying on them to provide relatively cheap trips, whether customers are paying for it or whether the town is paying for it.”

There is also reason to question Uber’s contention that the company can serve a similar role as conventional public transit in helping cities reduce private car use and alleviate traffic congestion. Research on the subject has yet to produce a consensus.

A 2016 analysis published by the American Public Transit Association and often cited by Uber found that the more people used shared transportation modes like bikesharing and ride-hailing, the more likely they were to ditch their car, suggesting a link between Uber use and lower congestion.

But a 2017 report by the Institute of Transportation Studies at the University of California Davis found people who use ride-hailing services report taking transit less frequently, and roughly half of ride-hailing trips replace journeys that would have been made by walking, biking or transit. The researchers hypothesized ride-hailing is probably making traffic worse.

To some policy-makers, the idea of public transit agencies partnering with ride-hailing or taxi services to replace regular transit trips is a fundamental contradiction.

“It is anathema,” said Councillor Joe Mihevc, who sits on the TTC board.

He argued that in terms of reducing congestion, ride-hailing and taxi trips are only slightly more efficient than single-occupancy vehicles, and public funds would be better spent improving the existing public transit network.

“The ‘public’ in public transit is destroyed when public transit agencies start subsidizing private automobile use,” Mihevc said.

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