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Partner with Transportation Network Companies (TNCs) for Low-demand Service: Is It Viable and Beneficial for Transit Agencies? - In areas with low transit demand or during off-peak hours, fixed-route bus services often struggle with low productivity while maintaining regular headways. However, further increasing headways can degrade service quality, posing a significant challenge for transit agencies. This study introduces an innovative approach to addressing this issue by establishing partnerships between transit agencies and Transportation Network Companies (TNCs), where TNC vehicles replace fixed-route buses on select segments. A decision-making framework is presented to help agencies evaluate the operational feasibility and financial sustainability of such collaborations. The framework identifies critical factors influencing the viability of TNC substitution, such as vehicle hours, travel distances, and passenger volumes. Utilizing these factors, the study examines various compensation models and estimates the costs associated with TNC operations, a key element in determining economic viability. To validate this approach, the framework is applied to a case study in Long Beach, California. The findings reveal that when passenger volumes at a given stop drop below 0.6 per stop, substituting buses with TNC services leads to cost reductions. Additionally, results highlight that transit agencies must weigh both financial savings and passenger experience when making substitution decisions, as removing longer route segments may generate smaller cost savings but improve service quality for other riders. Ultimately, this research offers transit agencies actionable insights into optimizing service efficiency and reducing costs in low-demand areas and off-peak periods through strategic partnerships with TNCs.
