CHAPTER 10

Designing and Implementing Alternative Transportation Services

Introduction

This study has found that transit agencies use different approaches for their alternative transportation services; there is no one standard design or model. Perhaps this should not be surprising given that alternative transportation programs for ADA paratransit riders are still evolving—some still operate as pilots, some have changed policies to reflect new program objectives or to better meet the needs of the riders and/or the transit agency, some have been modified as new providers enter the market, and others have upgraded features with technology enhancements.

This chapter describes the different ways transit agencies have approached designing and implementing their alternative services, including different models that structure service and different policies that define the service.

The different operating models reflect the transportation resources available in the community, their capabilities and willingness to work with the transit agency, and decisions made by the agency regarding control of the program. Are there taxi companies interested in working with the transit agency? What about TNCs? How should riders request trips? How will accessible service be provided? The choice of operating model may also reflect the transit agency’s willingness and staff resources to administer an alternative service program.

The different policies reflect the transit agencies’ objectives in pursuing an alternative service; for example, should the on-demand service be provided for ADA paratransit riders only or might eligibility be expanded to others, such as seniors? What about the level of subsidy, and should there be trip limits to help control program costs? How should the service area and span (days and hours of service) be defined?

Common Service Models for Alternative Services

At a basic level, alternative services are subsidy programs, with the transit agency fully or partially subsidizing the cost of trips for ADA paratransit riders using participating transportation providers. There are two common service models: provider-side (also called supply-side) subsidy models and user-side subsidy models. The major distinction is which entity—the provider or the rider—is receiving the transit agency’s subsidy.

Most of the alternative services in this study (16 of the 18 survey respondents) are provider-side. These programs are designed so that the transit agency pays the provider(s) an agreed-upon amount for trips taken by eligible riders. In contrast, a user-side subsidy service model has transit agencies giving eligible riders the opportunity to purchase service at a discount, which can be done in different ways: by matching funds a rider puts on their program-specific debit card, with a code to use Uber or Lyft, or by allowing them to buy a limited number of paper or electronic vouchers at a discount.

It is also important to underscore that with either model, transit agencies can control the program budget by limiting trip-making to a specific service area and days/hours, establishing a ceiling for the number of trips a rider can take over a specified period, or setting a ceiling on the number of total program trips in a defined time period (typically a month). With user-side subsidy programs, a transit agency can also control the amount of matching funds.

Provider-Side Subsidy Service Models

With provider-side subsidy models, the transit agency typically has a contract or agreement with each provider participating in the program—usually taxi companies and TNCs—which provides for, at the very least, a payment arrangement, a scope of work, and data the transit agency needs for assessment and reporting.

Some contracts and agreements also include service quality standards such as average response times split out by ambulatory and wheelchair trips to evidence service equivalency. Indeed, a major benefit of the provider-side subsidy model is that the contract/agreement gives the transit agency some control over service quality. While the determining characteristic of this model is that transit agency funds are used to reimburse the provider for services rendered, there are design variations on this model focused on how riders request service and from whom.

• With centralized reservations, assuming there are multiple providers, there is only one entity through which alternative service trips can be requested. The more common service models with centralized reservations involve requests being called into the ADA paratransit service’s call center, whether staffed by the transit agency, its paratransit call center contractor, or its turnkey contractor.

  Or the transit agency could contract with a broker to handle alternative service trips; this could be an entity offering call-taking services or an entity such as Curb, a taxi app broker. For called-in trips, the call-taker uses the ADA paratransit scheduling system to look up the rider and determine eligibility for the alternative program, asks the caller to identify their preferred provider, and then forwards the request to that provider.

  Where the provider is a taxi company, the taxi company then reenters the trip details in its dispatch system. With some systems, the transit agency has a link to the taxi company’s dispatch system. If the rider prefers a TNC or if there is a choice of TNCs, the call center staff will have a portal where the call-taker can enter the request into the TNC’s system. This is typically called a concierge link. Note that an entity providing centralized call-taking can also serve as a backup to the service model where trip requests are sent through an app, but where some riders do not have a smartphone or Internet access.

  Under the centralized reservation provider-side subsidy model, the FTA’s taxicab exception can be invoked as long as the rider has a choice of providers. With a centralized model based on the Curb taxi app, a rider cannot choose a taxi company, so the taxicab exception would not apply.

• With decentralized reservations, riders contact the provider(s) directly to reserve a trip. If the provider(s) are taxi companies, a rider can call the taxi company or use the company’s app if one is available, or in some venues go to a taxi stand or hail a cab on the street. With participating taxi companies, eligibility for a subsidized fare can be established via a program-specific swipe card. The card establishes that the rider is responsible for a base fare (if any) and a fare overage above what the agency is willing to subsidize. In some cases, the transit agency must forward a list of eligible riders to the taxi companies or other transportation providers on a scheduled basis, for example monthly.

  With most provider-side subsidy programs, the swipe card merely identifies the rider as a program participant, and the participant then pays the rider’s share of the fare with cash or with a credit/debit card. With TNCs, riders generally request a trip through the TNC’s app

or online. TNCs typically also provide the option to telephone a trip request through a TNC-staffed control center, a TNC-contracted entity, or the centralized call center established for the transit agency’s ADA paratransit service, all of which have a link to the TNC system. Several alternative services in this study use both taxis and TNCs, each with their own ways of collecting and processing reservations.

• Indirect payment to providers. The research team identified one transit agency that has established an indirect payment relationship with the alternative service providers. Here, the transit agency does not contract or have an agreement with the taxi providers. Rather, it has one contract with the fare card provider, CabConnect, and CabConnect has agreements with the taxi companies. With information that is stored on the fare cards swiped in the backseat POS devices in the taxis, CabConnect invoices the transit agency on behalf of the taxi companies. The transit agency pays CabConnect, CabConnect pays the taxi companies, and presumably the taxi companies then pay their drivers the drivers’ share.

  In this service model, the transit agency pays a separate fee to CabConnect for its service. From the research team’s perspective, this still falls under the provider-side subsidy model because it is the providers who are being paid the subsidy, albeit indirectly.

User-Side Subsidy Service Models

Only two of the 18 alternative services surveyed employ a user-side subsidy model. In one case, the transit agency uses a bank-issued debit card limited to taxi and limousine service vendors. In this system, the transit agency matches funds the rider loads into their account at a rate of $4 to every $1 the rider loads, up to a total of $300 per month (including the amount loaded by the rider). The rider requests service directly from any valid vendor and pays for service with the debit card. Requests can be made in any fashion offered by the provider, whether a call to a taxi dispatcher or driver, via an app, or by hailing. Because of the funding match, the rider is accessing the service at 20% of the fare.

In the second user-side subsidy program, the transit agency gives eligible riders the opportunity to purchase, at a 50% discount, a code that gives a defined sum of money for use with the participating TNC. The rider enters that code into their personal TNC account and uses the TNC as desired, up to the defined limit. The transit agency also uses a taxi provider that operates WAVs and accepts phone requests and cash payment. Riders can purchase the same amount of money for use with the taxi company at a 50% discount using a card issued by CabConnect.

Subsidy Models: Advantages and Disadvantages

Provider-Side Subsidy Model

Advantages

• Transit agency decides which transportation provider(s) participate
• Transit agency can ensure user choice by contracting with more than one provider
• Transit agency can exercise some control over transportation providers’ service and service quality through the agency-provider agreement
• Transit agency can require that contractors directly or indirectly provide WAV service
• Transit agency can ensure it gets data needed for reporting or performance and compliance monitoring

Disadvantages

• Transit agency has to negotiate a specific agreement with each provider (unless it uses the CabConnect model)
• Transit agency must devote administrative effort to processing invoices and monitoring service

User-Side Subsidy Model

Advantages

• Transit agency has at most one agreement with one entity (e.g., bank or fare card vendor)
• Far less administrative effort required
• Riders have more transportation flexibility than with a provider-side subsidy and, depending on how many providers are eligible, a broader array of providers to choose from

Disadvantages

• Since no provider contracts, transit agency has no control over service quality (left to market forces) or over service equivalency
• Data reported to transit agency is much more limited; this may impact the ability to monitor performance and service equivalency

Call-Taking and Trip Reservations

Centralized Call-Taking

Advantages

• Gives transit agency better control over use and monitoring of alternative service; particularly useful when there are trip limit policies
• Allows transit agency to more directly feature its alternative service on its phone tree when riders call to book an ADA paratransit trip
• Gives transit agency better (customer-specific) data to estimate cost reduction

Disadvantages

• New effort and cost for transit agency unless the function can be added to a centralized ADA paratransit call center
• Added step and time for trip reservation process because the centralized entity must forward the reservation to a provider/driver willing to accept the trip

Decentralized Call-Taking

Advantages

• Riders have direct communication with provider, reducing issues stemming from miscommunication; with taxis, requests can be made directly to drivers
• Allows riders to hail taxis or use taxi stands
• Eliminates the extra step required by centralized reservations
• Ensures riders choose their provider (assuming more than one option)

Disadvantages

• Transit agency has less control over quality of reservations function

App-Based Reservations

Advantages

• Low cost
• Riders are in direct communication with drivers once driver is assigned to trip
• Riders get an estimated time of arrival (ETA) and can follow progress of vehicle before and after getting in
• Major TNC apps have shared-ride options
• Major TNC apps are accessible
• Some TNCs maintain call centers for riders without smartphones or Internet access

Disadvantages

• Transit agency will need to provide a backup call center (with a concierge link) if TNC doesn’t have one
• Transit agency will need solutions for unbanked customers

Other Functional Variations

Scheduling/Dispatch

With all alternative services, the process of assigning a trip to a driver or vehicle is performed by the provider, either manually (e.g., by a taxi dispatcher) or through an automated dispatch system. One reason transit agencies are not involved in this process has to do with user choice and the taxicab exception. Should the transit agency intervene in scheduling or dispatch, the result is that riders are not choosing their provider because the transit agency is directly controlling the service. In such a case, FTA drug and alcohol testing regulations would apply.

Taxi providers schedule and dispatch trips via radio or an automated dispatch system that assigns the trip to a driver or vehicle based on proximity to the pickup location or need for a WAV (if the provider operates WAVs).

TNCs schedule and dispatch trips through the company’s app or website using the automated matching system. Trip requests are made available to “signed in” TNC drivers in the vicinity of the requested pickup location; drivers can respond and serve the trip.

Service Delivery: Number of Providers

Alternative service delivery is performed by one or more private transportation providers. Typically, these providers are taxis and TNCs, but can also be other livery operators and NEMT companies willing to participate in the program. And in the case of user-side programs that employ vendor category debit cards, the providers can potentially include any such vendors available in the category, including, as in one of the case studies, an airport shuttle provider.

One Transportation Provider

An alternative service may have one provider only—a taxi company or TNC. This may be by design or by necessity; in some cases there is only one suitable provider in the community or only one willing to participate. Key requirements when there is only one transportation provider are to ensure the provider can provide accessible service and that the drivers participate in drug and alcohol testing because there is no user choice, and the taxicab exception does not apply.

Advantages

• Less administrative and monitoring effort with only one provider
• Drivers subject to a higher standard of safety oversight by virtue of compliance with FTA drug and alcohol testing requirements

Disadvantages

• Riders have no choice of the provider
• Response times may be longer than a program with multiple providers

Multiple Transportation Providers

Transit agencies may design their alternative services with more than one provider through direct contracting relationships or through a broker. Using multiple providers may promote higher

levels of service quality through competition, and it means the FTA taxicab exception applies because riders have a choice of providers.

Advantages

• Multiple providers generally translate to greater capacity with more service available for riders
• More service available should translate to shorter response time
• Gives riders a choice of providers, and they can use a preferred company
• Rider choice may spur competition among providers and improve service quality
• With multiple providers (at least three) the service remains rider’s choice if one provider ends its participation

Disadvantages

• Transit agencies have multiple providers to manage (under a provider-side subsidy model), increasing administrative and monitoring efforts, unless using a broker or other entity to manage service and pay providers

Service Delivery: Wheelchair-Accessible Service

In all cases, it is up to the transit agency to ensure wheelchair-accessible service is available to riders who need it.

With provider-side subsidy models, this can be done via a contract provision. As contractors, many taxi companies already have WAVs, whether because of a local regulatory requirement or incentive program, a local or statewide effort to infuse WAVs into the taxi fleets, or because it makes good business sense. In contrast, TNCs entering into contracts with transit agencies to participate in alternative service programs often rely on subcontracts to supply WAV service. These subcontractors often include local NEMT providers and sometimes national paratransit operation/management companies. Some TNCs have also begun to lease WAVs to partner-drivers. And as mentioned previously, with provider contracts, the transit agency can require the data needed to evidence service equivalency.

Policy Variations

Table 10-1 shows variations on policies a transit agency can establish for its alternative service.

Eligibility Policy Alternatives

ADA Paratransit Riders Only

• Focuses the service on riders who lack access to same-day transportation given the transit agency’s next-day ADA paratransit service.

ADA Paratransit Riders and Others

• Policy choice to expand eligibility to others such as seniors, those with low incomes, and veterans results in greater alternative service use and cost.

Service Area Policy Alternatives

Required ADA Paratransit Service Area

• Providing service in the mandated ADA paratransit area of ¾-mile corridors of fixed routes aligns the service to what the ADA requires and to riders’ experience if the ADA paratransit area also corresponds to ADA requirements.

Table 10-1. Policy variations.

• Making the alternative service area the same as the ADA paratransit service area simplifies user information and marketing materials.
• Covering the same area as ADA paratransit increases the likelihood that an alternative service trip would otherwise have been taken on ADA paratransit.

Required ADA Paratransit Service and Beyond

• Where a transit agency provides ADA paratransit beyond the required ADA paratransit service area with a defined premium area, aligning the alternative service (which is also a premium service) to correspond lets riders reach destinations in that same area on a same-day, on-demand basis.
• Service may be provided beyond the defined ADA paratransit area or premium area to one or a few important regional destinations, e.g., a major medical center.
• A transit agency may decide to extend alternative service area to its entire jurisdiction, recognizing that residents throughout the jurisdiction may contribute tax dollars for public transit but service is limited to locations of fixed routes and corresponding ¾-mile corridors of the routes for ADA paratransit.
• A transit agency may decide to extend the alternative service area to an adjoining area not in its jurisdiction if the adjacent municipality or transit agency contributes subsidy funding.

Service Span Alternatives

Same as ADA Paratransit Service

• Structuring the alternative service with the same days and hours as ADA paratransit, like covering the same service area, aligns with riders’ use of ADA paratransit and simplifies user information and marketing materials.
• Mirroring the ADA paratransit service span increases the likelihood that an alternative service trip would otherwise have been taken on ADA paratransit.

Greater than ADA Paratransit Service

• Providing alternative service beyond the ADA paratransit service span gives riders more flexibility in scheduling trips, but it will increase cost exposure to the transit agency unless other limits are imposed.

Less than ADA Paratransit Service

• Limiting the alternative service to fewer days or hours than ADA paratransit is a cost-conservative approach and may be appropriate absent other cost controls such as trip limits.

Trip Request Policy

On-Demand/Immediate Response Requests

Advantages

• For-hire providers such as taxis and TNCs are typically designed and operated to offer immediate-response on-demand service. This is their standard business model.

Disadvantages

• Given that alternative service providers operate fewer WAVs than sedans, it is difficult to ensure an equivalent response time. This means riders who request a WAV may have a longer wait time for their trips. With provider-side contracts, however, provisions requiring service equivalency can be added to the contract.

Same Day/One to Two Hours in Advance Requests

Advantages

• A same-day policy is still beneficial to riders compared to ADA paratransit’s next-day policy.
• Requiring riders to request trips 1–2 hours in advance is a strategy that works toward response time equivalency between riders who use sedans and riders who need a WAV. Given the greater prevalence of sedans used by providers, response time for sedans is typically faster than for WAVs. The 1–2 hour advance scheduling policy essentially stalls the dispatch of sedans, which gives additional time for a WAV to respond.

Disadvantages

• Riders who use TNCs on their own outside of ADA paratransit may be frustrated by the advance scheduling requirement.

Advance Reservation and Subscription Trip Requests

Advantages

• In addition to on-demand and same-day service, riders may benefit from having the option to book trips in advance (especially for important appointments) and schedule subscription trips.
• Advance and subscription trip bookings can be positive for providers, showing future demand that may help with driver management.

Disadvantages

• Advance and subscription trip bookings can absorb capacity for same-day trips, working at cross-purposes to an on-demand or same-day service. This has particularly been the case in 2021 and 2022 as the for-hire transportation industry is facing driver shortages and their supply of service is constrained.
• Shifting subscription trips, which form the foundation of ADA vehicle schedules, to the alternative service removes trips from the ADA paratransit service.

Trip Limits

Advantages

• Setting trip limits gives the transit agency some control over service use and resulting cost.
• Trip limits help establish the fact that the alternative service is a premium service, beyond what the ADA requires.

Disadvantages

• Requires administrative and monitoring efforts to manage riders’ trip limits

Considerations

• Setting riders’ trip limits by the week or month rather than by the day gives riders more flexibility to use the alternative service to meet their transportation needs.
• Setting trip limits for individual riders based on their history of ADA paratransit use seems a logical method to allocate resources and may prevent induced demand. But unless riders’ history of ADA paratransit use is reviewed with appropriate frequency, the limits may not be an accurate reflection of their use and their access to the on-demand service may not be correspondingly limited.

Fare/Subsidy Policies: By Trip (Provider-Side Subsidy Models)

Initial Fare Required

Of the 16 alternative services in this study with provider-side subsidy models, 14 require riders to pay an initial fare.

Advantages

• In keeping with transit agencies’ policies for ADA paratransit
• Establishes at the start of a trip that riders contribute to the cost

Disadvantages

• Adds a step to trip provision
• Where riders can pay with cash or tickets, administrative efforts needed for reconciliation
• Requires back-office efforts to calculate payment to provider(s)

Initial Fare Compared to ADA Paratransit Fare

A comparison of the alternative service initial fare to the ADA paratransit fare at the surveyed transit agencies finds:

• 5 are less than the ADA paratransit fare
• 5 are more than the ADA paratransit fare
• 3 are the same as the ADA paratransit fare
• 1 varies compared to ADA paratransit based on the comparable fixed-route fare

Considerations

• A fare higher than the ADA paratransit fare establishes that the alternative service is a premium service, beyond what the ADA requires.
• A fare equal to or less than the ADA paratransit fare may encourage riders to use the alternative service instead of ADA paratransit. Depending on the subsidy structure and trip limits, this may shift more trips to the alternative service and help the transit agency reduce costs on ADA paratransit. But without attention to the subsidy level and possible trip limits, a lower fare may induce demand that results in new trip costs beyond any savings on ADA paratransit.

Riders Pay Overage (Excess Fare beyond Maximum Subsidy)

Twelve of the reviewed programs established a maximum per-trip subsidy, with the rider required to pay any overage. Except for one of those 12, the programs also require that riders pay an initial fare.

Of the other alternative service programs, two have agreements to pay the providers a negotiated amount per trip and two pay providers their full trip cost.

Advantages

• Setting a maximum subsidy per trip gives the transit agency control over the cost of individual trips.
• The subsidy per trip can be tailored to the transit agency’s objectives for shifting trips to the alternative service, e.g., shorter trips or longer trips.
• A provider-side subsidy program without a maximum subsidy per trip exposes the transit agency to unknown costs unless other trip controls are established.

Disadvantages

• Depending on the subsidy level, riders might frequently have overage to pay, which may limit their ability to use the alternative service.

Considerations

• The per-trip subsidy level should reflect the cost structure of participating providers so the providers’ individual drivers, often independent contractors, want to serve the trips.

Driver Qualifications (Provider-Side Subsidy Models)

With provider-side subsidy models, the transit agency can specify in the contract, if desired, requirements for drivers of the participating provider(s). With a user-side subsidy model,

the transit agency does not have the same level of control over the providers’ drivers as there are no contracts with the individual providers.

Meet Qualifications Established by Transit Agency

In the contracts with the providers, the transit agency can specify driver requirements, for example, the transit agency may want the drivers who serve trips for ADA paratransit riders to have some sensitivity training. Seven of the surveyed transit agencies reported including driver training requirements in their provider contracts.

Responses from the other transit agencies indicated that providers followed requirements set out by their regulatory body or that no special training was required; in the latter case, presumably those providers adhered to applicable regulations set out by regulatory entities.

One of the transit agencies with a user-side subsidy reported that it required no special training, as would be expected given the service model, but added that the participating providers may have their own training programs.

Meet Qualifications Required by Respective Regulatory Entity

Alternatively, the transit agency can accept the driver qualifications established by the providers’ regulatory body. Taxi companies typically must follow requirements set by the city or county that regulates taxi service in that jurisdiction. TNCs have requirements established by the company that are followed for all their operations.

Require Compliance with FTA Regulations for Drug and Alcohol Testing

When the alternative service has only one provider, the FTA’s taxicab exception does not apply and the provider must follow the drug and alcohol testing requirements. In some cases, the transit agency with two or more alternative service providers may require those providers to adhere to the testing requirements. This may be the case when the alternative service providers are also under contract to serve overflow or peak-period ADA paratransit trips for the transit agency. Those trips are scheduled and dispatched by the transit agency, so there is no user choice that would invoke the taxicab exception.

Common Designs

While the transit agencies in this study used varying approaches to design and implement their alternative services, certain commonalities emerged.

Model and Subsidy Method

The most common model is a provider-side subsidy program using multiple providers with:

• Decentralized trip reservations: riders reserve trips directly with providers
• Initial fare that covers a trip up to a defined subsidy limit: typically a dollar amount but in some cases a mileage limit with a price per mile, with riders responsible for overage

Policies

Among the policies that structure the alternative services, several common approaches were:

• Trip limits established for riders
• Eligibility only for ADA paratransit riders
• Service area beyond required ADA paratransit service area

Other policies varied, with no common approach:

• Service span
  • Same as ADA paratransit
  • Less than ADA paratransit
  • More than ADA paratransit, including 24/7 service (typically with taxi companies)
• Scheduling policy
  • Same-day
    • On demand
    • One- to two-hour advance scheduling
  • Advance scheduling allowed, with varying definitions of “advance”
    • One day in advance
    • Five days in advance
    • 30 days in advance
    • Advance scheduling depends on the specific provider in multiprovider program
  • Subscription trips provided