Abstract
Microtransit offers flexible, on-demand rides that can fill gaps in public transit networks, especially for people who do not have access to a car and live in an area where fixed-route service is limited. However, operating these services is expensive. For example, LA Metro once reported a taxpayer subsidy of $43 per microtransit ride, and another California transit agency reported even higher costs. Additionally, because transit agencies offer low-cost, flat fares, demand for microtransit often exceeds service capacity during peak hours, leading to long wait times and unfulfilled trip requests.
To help agencies design more effective and financially sustainable systems, how different fare structures, fare levels, and fleet size affect both regional mobility and transit agency finances were analyzed. Using simulation modeling and optimization techniques, several fare strategies — including time-of-day pricing, distance-based fares, and discounts for riders transferring from microtransit to fixed-route transit were tested.
