Originally published on Gas2.
Reuters.com recently reported that Altamonte Springs, Florida, will be the first U.S. city to subsidize Uber services in an attempt to reduce traffic and increase transit ridership. The Orlando suburb has currently allocated $500,000 to cover 20% of Uber trips within city limits and 25% of trips to or from a SunRail station.
The program, which launched March 21st, received local, national, and international coverage. Altamonte Springs city manager Frank Martz said,“It’s infinitely cheaper than the alternatives. A mile of road costs tens of millions of dollars. You can operate this for decades on $10 million.” Martz said that suburban sprawl in Florida has made bus service inefficient and unaffordable. He hopes Uber service will help those in need of public transit to reach bus and rail stations.
“We’ve really worked with the city of Altamonte Springs to figure out how they can increase mobility,” said Central Florida Uber General Manager Christine Mitchell.
The city recently tried a similar measure with what is described as “Uber for public transit,” Lynx Flexbus, that was unsuccessful. Leftover funds from this attempt, along with additional funding from private local businesses, will be used for the new partnership with Uber.
“We’re disappointed that working with public agencies didn’t work out,” continued Martz,”but the fact of the matter is people still need to move. So, we kept looking for opportunities and Uber was an excellent opportunity.”
Not everyone is as optimistic. Joann Weiner, director of the master’s program in applied economics at George Washington University remarked, “I see this plan as blowing (the city’s) budget out of the water.” She added that subsidies often drive up the price of service and that the city may be underestimating the potential demand.
After the year-long trial concludes, the city will analyze the results and look for another partnership, possibly with Lyft, to drive prices down.
Reprinted with permission.
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