The Toronto exurb of Innisfil considered traditional fixed-route bus service to address demand for public transit. They considered and calculated costs for both one-bus and two-bus acquisitions and operations for a smaller and larger service area, respectively. Desiring a larger service area, the department of transportation staff recommended issuing a Request for Expression of Interest (RFEOI), followed by a Request for Proposal (RFP) for demand-responsive transit.
The government decided to execute a partnership agreement with Uber, to be followed by the taxi companies (to cover WAV trips) to use the UberPool ridesharing platform as their Stage 1 pilot. The operation is explained in full in a presentation, but the basic form is that the user pays within the range of a bus fare ($3-5 CA), and the city, with a subsidy from the Ministry of Transportation, subsidizes the remainder of the cost, as follows in Table 1. The lower costs are for quasi-fixed service from established pick-up areas, while “custom” door-to-door service costs at the upper range.
Table 1: Innisfil DRT fares in 2017
Stage 2 not only extends the funding, and reports results, but formalizes taxi participation, waiving permit fees, etc.
UPDATE: May 2019
Citylab reported in April 2019 that “As of April 1, flat fares for the city-brokered Ubers rose by $1. Trip discounts dropped to $4, and a 30-ride monthly cap was implemented.” According to the article, which is also linked below, the service remains popular. A mode like rail might enjoy economies of scale with rider adoption, but smaller vehicles require more supply to meet demand.
Updated May 2019