Subsidized ridesourcing for the first/last mile: how valuable for whom?

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Abstract
The first/last mile is a long known deterrent to public transportation use, yet difficult to solve with fixed route transit. Many transit agencies are exploring partnerships with ridesourcing companies to offer subsidized feeder services. Ridership, however, has been surprisingly low. We explore two conceptual explanations. First, ridesourcing fares are found to exceed travel time savings for all distances below 1 mile and annual household incomes below USD 30,000 (i.e., the majority of US bus-using households). Subsidies are thus necessary, yet common schemes (flat fees, flat value or percentage discounts) are inequitable as they particularly benefit high-income households (thus miss their main target group). Second, the disutility of the additional transfer (‘transfer penalty’) and wait times exceed travel time savings assuming modest values for all distances below 0.45 miles. Subsidized ridesourcing for the first/last mile is thus not the panacea often portrayed, particularly not for short first/last miles. Where first/last miles are longer, investments in first/last mile services only might miss their purpose as the private car often remains the faster, more convenient and cheaper option. A much more holistic set of policy changes is hence required. Where transit agencies decide to proceed with first/last mile subsidies, they are advised to integrate them into existing fares (offering first/last mile rides for free) as this is the most equitable approach.

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