4 reasons microtransit is here to stay

June 14, 2018 Russell Yell

From digital platforms to private-sector investment, the world has changed for microtransit


Urban environments offer residents and visitors multiple transit options—personal vehicles, taxicabs, subways and streetcars, bike lanes, and traditional bus services. Microtransit is one option that has seen its successes and failures around the globe.

So, what is microtransit? We can broadly define microtransit as a privately operated mobility service fitting somewhere between private (cars or cabs) and public transit. It’s a form of shared mobility where users are matched to vehicles and routes are generated dynamically.


MOIA, a Volkswagen subsidiary, recently received approval from the city of Hamburg, Germany, to start testing an electric microtransit service. (Photo courtesy of MOIA)


The concept of microtransit isn’t new, with early demand-responsive transport experiments occurring during the 1960s in the UK. Since 2016, there has been renewed interest with trials and fully-fledged services popping up all over the world. These trials are seeking to address a range of use cases, from a first/last mile connection, to the replacement of community or night bus services where demand is low or sporadic.  

A good example, operating in one of my favourite places, is the Savy service in Queenstown, New Zealand, which launched in late 2017 and has now expanded to cover most of the Queenstown community in response to observed demand in the app.

There is a school of thought that says this has been tried before and will fade away just as it has in the past, but I firmly believe that microtransit is here to stay and will form an integral part of our future transport networks. Here are four key reasons why microtransit will succeed:


Digital platform

The key difference, which makes these services more commercially viable, is changes to our digital world—the application of location services, predictive analytics, and dynamic service optimisation allied with well-designed digital interfaces and in-vehicle experiences—resulting in products that better serve customer needs, built on a scalable platform.

Other smartphone-enabled mobility services such as Uber have set the benchmark for ease of use and convenience. The microtransit platform developers have adopted similar app-based driver and rider tools to create a quality user experience for all.


One of the keys to successful adoption of microtransit is newly developing digital platforms. MOIA is using algorithms and smartphone apps to plan the most efficient route. (Photo courtesy of MOIA)


Private sector investment

Collaborations, partnerships, mergers, acquisitions, and venture-capital funding were rare in transport when I started my career 2003, but now they occur daily. These new relationships could have a major influence on the way the transport industry evolves, as demonstrated by the re-positioning of original equipment manufacturers such as Ford, with their smart mobility subsidiaries. Ford’s two new businesses in the on-demand microtransit space, Chariot and Translōc, gives them a comprehensive platform to scale from. They’ve also acquired Autonomic, which could extend their influence to being an orchestrator of transport networks.

Daimler too has a portfolio of mobility services acquisitions and has set up a joint venture with Via, an on-demand mobility service now operating in cities across the globe.

After the recent scandals with emission fixing, there is a shining light emerging at Volkswagen in the form of MOIA, a mobility solutions subsidiary that got approval from the city of Hamburg, Germany, to start testing an electric microtransit service.


Transit agency appetite

_q_Microtransit platform developers have adopted app-based driver and rider tools to create a quality user experience for all._q_With the private sector investment creating financially stable vendors and well-established business models, it is easier for government agencies to consider how these services can complement and enhance existing transport networks. The adaptability of microtransit means that the business models can be applied to many use cases, potentially addressing some mobility equity issues for financially, physically, or geographically isolated members of the public.


Integrated, seamless networks

Public transport agencies have recognised the need to become customer-centric, technology-enabled organisations and a universal objective they hold is to create frictionless, quality travel experiences. As a core part of a seamless travel experience that addresses some of those first- and last-mile connections, microtransit has a crucial role to play and can make public transport a more attractive option in many cities across the globe.


We have been advising several transit agencies in North America on the future expansion and diversification of their transit offerings. Microtransit and the broader shared mobility space are globally important as we move forward. I’m excited to leverage the benefits of technology to create connected communities.

About the Author

Russell Yell

Russell Yell's skill as a project director and business leader comes from 15 years advising clients across the United Kingdom, Middle East, Europe, North America, Australia and New Zealand. He has led a broad mix of projects ranging from planning transport infrastructure requirements and master planning at a city-wide scale through to data services and customer-facing digital solutions.

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