What Do We Know About the “First Mile/Last Mile” Problem for Transit?

Public transit agencies and private firms have decided that a major problem facing cities is the “first mile/last mile” (FMLM) problem. The FMLM problem is drawn originally from telecommunications, then supply chain management (goods movement). For telecommunications FMLM is the final leg (or first leg) to the consumer. With physical infrastructure it is expensive to match high capacity hubs to individual units. In the 1970s and 1980s, as cable TV was being deployed across the US, cable companies had to individually wire each and every household. This was a tremendous but necessary cost, and the cable companies were able to amortize the expenses over many years. Rarely did an individual household pay the full cost of running cable, instead they just paid a small installation fee and their monthly subscription.

FMLM then was used by logistics companies (FedEx, UPS, etc.) to describe their end point deliveries from centralized warehouses. These trips are complex chains to optimize, and ultimately the goal is to lower the cost as much as possible to lower the overall cost of shipping a parcel from Point A to any other Point. For both telecommunications and logistics, FMLM has large literatures of public research plus scads of private research.

In recent years FMLM has been used to also describe passenger travel in the context of getting to/from bus and rail stops. While there are some similarities between telecommunications, goods movement and passenger travel, FMLM for transit isn’t well understood. A Google Scholar search suggests that there are few studies overall, and even fewer peer reviewed studies. Of what is out there, most have considered bicycles (or Segways!) as the preferred FMLM solution.

The dearth of FMLM research isn’t problematic on its own. Lots of things that should be studied haven’t been studied much, and lots of things that we really don’t need to know more about keep getting poked and prodded as though something new will fall out. But for FMLM for transit, not knowing anything about what makes it successful is a bit of a challenge, especially since there are lots of private firms now competing for scarce public dollars to subsidize favored technologies and modes. We should support the spirit of innovation at the heart of these efforts to boost transit ridership. But we should also insist that solid social science research comes out of the many pilots underway.

What I have seen so far is that there are many transit agencies and cities starting to look to Uber, Lyft, Juno, etc. to provide short trips to and from transit stops (mostly rail from what I can tell). These taxi trips will be subsidized and hopefully enhance existing transit service. So far, so good. Let’s all agree more transit ridership is better than less transit ridership.

Beyond these pilots, however, what do we know? Here are some issues at hand:

• Elasticity of demand with regard to fares: Transit ridership is sensitive to fares. As fares go up, demand for transit goes down. (I’ll leave aside cross-elasticities and such for now, but they are real) For many reasons I am not convinced we can isolate a reliable point estimate of elasticity, but -0.3 is typical. A 1% increase in fares reduces demand by 0.3%. Will people pay additional taxi fares, even if subsidized, to take transit they are paying a separate fare for?

• Disutility of transfers: We know that transit riders prefer to avoid transfers when possible, but many are willing for one transfer. Transfers have to be easy in time and effort. With long headways (up to 20 minutes) it is not clear that transfers between FMLM can be reliable enough to encourage use. Getting to the station is one problem. Waiting at the station is another.

• Opportunity cost: How much are transit agencies or cities willing to pay for what will be marginal improvements in ridership and are there better uses of those dollars? I suspect taxis to transit will have a marginal effect on ridership because even if you have a handful of drivers zooming around with passengers these will be one way trips to/from the station due to peaking. So maybe a driver can carry 4-5 passengers an hour if each round trip takes 12 minutes or so, and that’s assuming that people are ready when the taxi is. A van going from a train stop to a large employer, such as what happens in Silicon Valley, will have a somewhat higher capacity. These are uncommon cases. Bike share is also unlikely to have a large effect because of the one-way travel and imbalance problems. Even if I’m off by an order of magnitude that’s not very many people per hour getting on transit at any given stop. Some of the pilot projects have a one-year budget of about $200,000 (which doesn’t suggest a lot of trips. Assuming no administration costs and $5 subsidy per trip that’s 40,000 trips, or 3,333 per month or about 110 per day. So round trip it’s about 55 people.) That’s not much relative to a total transit agency operating budget, but it’s enough to improve headways or do something else that may also have a positive effect on ridership. In most places that’s close to enough to hire a few drivers and buy a bus or two (over a few years). Would ridership improve more by reducing headways or giving cheap taxi rides? That’s a question to answer.

Overall, FMLM is an idea that sounds just plausible enough to make sense intuitively. Yet we have to evaluate these projects in terms of bang for the buck. These pilots are worth pursuing, but they may or may not be cost effective in the end.