Supplementing Fixed-Route Transit with Dynamic Shared Mobility Services: A Marginal Cost Comparison Approach

Abstract

Transit agencies in the U.S. have shown great interest in the possibility of incorporating on-demand shared mobility modes into their transit services. However, the cost-effectiveness of on-demand modes has not been clearly demonstrated, and there is no effective method for transit agencies to compare the costs of different service options. This study developed an innovative, economic-theory-based framework that appropriately conceptualizes the economic costs of incorporating on-demand service options into transit. On the basis of a theoretical framework, the study built a simulation model and applied it to evaluate an existing pilot of a transit-supplementing, on-demand mobility service: Via to Transit in the Seattle region. By accounting for both the service provider’s cost and the users’ costs, we obtained a more complete and accurate measure for the cost advantages of offering the on-demand option in comparison to expanding fixed-route transit. The theoretical framework and the simulation model can support the decision-making of public transit agencies as they explore leveraging on-demand shared mobility to supplement traditional transit.