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, and the city, with a subsidy from the Ministry of Transportation, subsidizes the remainder of the cost. The lower costs are for quasi-fixed service from established pick-up areas, while “custom” door-to-door service costs at the upper range. Stage 2 not only extends the funding, and reports results, but formalizes taxi participation, waiving permit fees, etc.
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.
Source: Innisfil DRT fares in 2019. https://innisfil.ca/transit/
Updated May 2019