Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
JULY 20, 2023
OPERATIONS, SAFETY, AND CUSTOMER EXPERIENCE COMMITTEE
JULY 20, 2023
Subject
SUBJECT: MICROTRANSIT PILOT PROJECT EVALUATION REPORT
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE the Results of the Evaluation of the MicroTransit Pilot Project.
Issue
ISSUE
The MicroTransit Pilot Project (MTP) was designed as a three-year pilot to test the delivery of a new on-demand ridesharing service model for public transit throughout Los Angeles County. Metro Micro was launched during a challenging time for public transit. As LA County continues to recover from the COVID-19 Pandemic, Metro Micro has matured into a well-used highly rated service with both opportunities and
challenges. This report presents the findings of the evaluation of the MicroTransit Pilot Project conducted by an independent evaluator to help determine whether and under what circumstances Metro should continue with Metro MicroTransit as a permanent service.
Background
BACKGROUND
On February 27, 2020, the Metro Board approved the award to operate the MTP service. The intent of this pilot was to test the viability of a flexible on-demand service in terms of impacts on ridership, equity, accessibility (first/last mile), workforce development, and as a cost-effective alternative to underperforming fixed route services. The MTP annual cost is approximately $31M
MicroTransit combines technologies and operational approaches to provide flexible, on-demand transit service. Passengers using MicroTransit enjoy flexible pick-up and drop-off locations and times. Instead of using a fixed schedule and route for each driver and vehicle, customers seeking to travel within a service zone are matched with drivers using a smartphone application, phone dispatch service, and/or website.
The first two Micro Zones were Watts/Willowbrook and LAX/Inglewood, deployed in December 2020. Within 45 days, the Pilot was expanded to incorporate the MOD/Sandbox Pilot adding three more zones covering Compton/Artesia, El Monte, and North Hollywood/Burbank. In June 2021, Highland Park/Eagle Rock/Glendale and the Altadena/Pasadena/Sierra Madre Micro Zones were implemented, followed by the Northwest San Fernando Valley Micro Zone in September. The Compton/Artesia Zone was also merged into the existing Watts/Willowbrook Micro Zone in that same month of September. The UCLA/Westwood/VA Medical Center Micro Zone was added in December 2021 to create a total of eight Micro Zones, all deployed within one year. Today, within the eight zones, MTP provides coverage in 21 cities as well as several unincorporated Los Angeles County communities across 165 square miles.
To ensure service launch, MTP was coupled with NextGen as a key ridership initiative to drive usage by current and new customers. As such, MTP programming was synchronized and ultimately implemented to help replace low-performing fixed route Metro bus services. As the bus network was redesigned MTP was adjusted where needed as a mitigation measure for service changes. Due to the disruptions of COVID-19 pandemic, MTP was implemented in full synchronization alongside the NextGen Bus Plan, which redesigned the bus network to improve frequency and access for Metro riders. Replacing fixed route bus services with MTP was seen as a way to resolve changes to the network and to improve transit access for residents in the areas served by these low-performing bus routes. In total, fourteen routes were partially or fully replaced by MTP as indicated by the chart below:
Peer Agency Operating Comparison
Attachment B, Peer Agency MicroTransit Operating Summary, details Operating Models in use by other agencies and includes information on fares, payment methods, vehicles, service areas, and hours of operation.
Based on the evaluation findings of other MicroTransit systems:
• Metro offers the lowest fare
• Metro operates the largest fleet consisting of 85 vehicles
• Metro is the only service provider that operates its MicroTransit service with in-house staff (SMART Operators and AFSCME Supervisors)
Discussion
DISCUSSION
From a service perspective, MTP has several major goals, including focusing on customer experience and ease of use, improved connections to the larger Metro system and local and regional operators, address inequities in the availability and affordability of on-demand ride-hailing offered by private companies, which are often less available in communities of color and areas with lower median household incomes and providing service throughout areas with low-performing Metro bus lines ultimately removed in the NextGen systemwide bus redesign.
The evaluation analyzed MTP services, performance according to industry standard performance metrics and provided a comparison on identified key performance indicators (KPIs) between each of the eight Metro Micro Zones.
While not an across-the-board replacement for fixed-route services, the utility and
convenience of MicroTransit is evident across several key metrics for Metro Micro.
SAFETY: Safety is paramount in attracting and retaining customers. About 96% of
Spring 2022 onboard survey respondents reported feeling safe from sexual harassment; a similar percentage of customers felt safe from harassment based on their race or ethnicity and safe from crime. Only 49-55% of Metro
bus customers responded positively to these survey questions.
Comfort
COMFORT: Comfort refers to passengers’ physical sense of well-being while using
transit facilities. About 98% of Metro Micro customers rated the vehicle
seats as comfortable, but only 59% of Metro bus customers view bus seats
as comfortable.
Ride Time
RIDE TIME: Travel time is a key factor in a potential customer’s decision to ride
transit. About 85% of Metro Micro customers are satisfied with how long it
takes to get where they are going which is higher than the 56% favorable response rate from Metro bus customers.
Equity
EQUITY: MicroTransit can bolster access to transportation for those in Equity
Focused Communities (EFCs). A higher share of Metro Micro rides occur in
EFCs compared to overall transit activity and compared to overall personal
travel activity in Micro Zones.
Usage
USAGE: Metro Micro experienced an initial peak of 62,000 passengers in August
of 2022. The 12-month weekday average across the system is about 2,000
passengers while weekend ridership averages around 1,300. There is
evidence of seasonal fluctuation in ridership, with higher ridership during
summer; data through 2023 is expected to support this pattern.
Finance
FINANCE The cost of operations per service hour on Metro Micro has declined by
61% between FY21 and FY23, in part due to startup costs in FY21. Compared
to similar services, Metro Micro operating costs per passenger trip are 8.3%
below peer average; however, operations costs per service hour are 20%
above peer average.
Costs
COSTS: Metro Micro’s costs per service hour are 28% lower than fixed-route
buses but 52% higher than ACCESS Paratransit in FY23. Reductions in wait
times compared to fixed route reduced annual travel time costs for Metro
Micro customers by an average of $3.8 million per year.
Contract Cost Analysis
The MTP was solicited as a PDA/P3 contract. The current contract was reviewed to assess how costs were structured and assigned to different categories. The purpose of this analysis was to inform operating cost structures to compare to peer agencies and to other Metro modes. The current contract covers eight cost categories: labor, communications, vehicles, reporting locations, hardware, software, insurance, and fleet cleaning/fueling. The annual cost of the contract is approximately $16M.
Although this contract is a pilot, notable features of the operating contract include:
• Labor costs for vehicle operators are not included as part of the operating costs of the contract; vehicle operators are provided directly by Metro. The annual Metro MicroTransit labor cost of SMART Operators, AFSCME Supervisors, Management and overhead is approximately $15M.
• Approximately 25% to 30% of costs in the contract are normally considered capital costs including vehicle lease payments, office and parking space costs (part of reporting location costs), as well as vehicle hardware costs (TAP machines, cameras, and other equipment).
Since many capital cost components are categorized as operating costs under the current contract, more costs are assigned to operations which erroneously results in higher operating costs for Metro MicroTransit than direct-operating costs for services. As Metro MicroTransit matures and improvements are made to the service model, Metro will correctly assign these costs in order to accurately compare costs and performance across modes.
Increasing Fixed-Route Ridership
An initial goal of the MTP was to provide a complementary service to Metro’s existing fixed route network, enhancing access to bus and rail services by providing first/last mile connections to stations.
A 2023 mode shift survey shows how positive customer experience can increase ridership on fixed-route services. Preliminary survey results, indicate Metro Micro customers use Metro Micro to connect to fixed route services provided by Metro as well as by other transit agencies, growing overall public transit ridership in the region:
• 11% of Metro Micro customers have become entirely new transit customers who did not use Metro’s other modes before the pandemic and now also use Metro’s fixed-route network.
• 19% of Metro Micro customers connect to other transit modes (Metro, Metrolink, and municipal bus) as a part of their MicroTransit journey.
Metro’s goal is to have 50% of Metro Micro rides link to fixed route service. Currently, 15-20% of Metro Micro customers use Metro transit as part of their journey. The low performance on this metric may be partially due to the consistently higher level of satisfaction that customers show for Metro Micro compared to Metro bus. This trend may suggest that Metro Micro customers see the service as a standalone mode rather than a way to connect to the larger service network.
Cost-Effectiveness
On a per-hour basis, Metro MicroTransit is 28% less costly than the low-performing bus service it replaced; however, on a per-trip basis, Metro MicroTransit is significantly more expensive than the replaced bus services: about $39 per trip vs. $11 per trip. Staff anticipates that with implementation of the new business model and contracts, we can meet MicroTransit’s goal of $20 to $25 per trip.
Operating Cost Per Revenue Service Hour (RSH) for Metro Micro and Low-Performing Bus Routes
Operating Costs per Trip for Metro Micro (FY21-FY23) and Low-Performing Metro Bus Routes (FY20)
The difference in vehicle capacity between fixed-route service and Metro Micro places a fundamental limit on its ability to compete with fixed-route service on productivity.
Additionally, variability within the Metro Micro fleet for vehicle capacity-ranging from three to nine passengers-means that capacity and productivity will not be consistent across all zones, further complicating Metro Micro’s ability to replace fixed-route service capacity. Rolling out Electric Vehicles (EVs) within the Metro Micro fleet also limits service span for the EV-based services due to charger availability.
MTP may reduce total costs while improving accessibility and customer experience, but as an on-demand service it cannot match fixed-route services’ total capacity for passengers with the same cost-competitiveness. Although Metro Micro creates benefits beyond its capacity and productivity, both factors are important to consider when comparing Metro Micro’s effectiveness to that of other modes in Metro’s service portfolio.
Evaluation Summary:
Metro remains committed to strategically refining the MTP program in an effort to provide options for Board consideration allowing for responsive and effective service delivery, meeting customer needs, and reducing overall operating costs. Based on the evaluation results listed in this report, Metro will continue efforts to restructure the revenue service model to achieve the goals of the program. This restructuring plan entails focusing not only on the most productive existing MicroTransit Zones and/or increasing fares, but also to ensure that program demand is balanced and does not result in negative impacts to other critical performance measures such as transit access for Equity-Focus Community (EFC) populations or the restoration of transit service lost from NextGen reduced bus service. This restructuring and analysis will also assist in determining which MicroTransit Zones should be discontinued (if any) or how to redefine the current operating hours and costs, in order to balance equity, efficiency, and effectiveness for zone change considerations.
MTP maintains many advantages compared to fixed-route bus services (shorter wait times, more direct trips for customers, etc.). Key program successes include:
• Customer Experience: Metro Micro provides a high-quality experience that has received high customer experience ratings (averaging 4.8 out of 5 stars) with no Micro Zone below 4.8 star rating. The target was 4.5 of 5 stars. The 4.8 has been maintained since service inception, through each COVID-19 pandemic surge.
• Wait Times and Cost Savings: Reductions in wait time between Metro Micro and the fixed-route services it replaced represent time cost savings for Metro Micro customers. When wait times are reduced, the customer spends less time waiting for transit service, which means more time at work, with family, and other activities. While non-labor time is valued differently than labor time, hourly wages are used as a proximate value of the “reclaimed” time that Metro Micro customers get back as a result of lower wait times. The greatest savings are for people making $15,000-$25,000/year.
• Customer Acquisition: Metro Micro attracts new transit customers; 11% of Metro Micro customers are entirely new transit customers.
• Operating Costs: Metro Micro has reduced its operating costs per Revenue Service Hour (RSH) by 61% and is now 23% less costly than the low-performing bus service it replaced at $179 per RSH in FY20 verses $138 per RSH.
• Service Coverage and Access: Nearly 350,000 additional residents are now able to access service across the eight Metro Micro Zones, providing meaningful service to 99% of residents.
The evaluation also considered the original five guiding MTP research questions:
1. How does a large, public agency operate an on-demand transit service that prioritizes customer experience and equity?
2. Can new management models (e.g., positive discipline) improve workforce retention, advance career pathways and establish workplace happiness?
3. How can an innovative Pre-Development Agreement Public-Private Partnership (PDA/P3) procurement tool be leveraged and improved upon to support testing emerging technology, risk sharing, and rapid iteration in service delivery models?
4. Can positive customer experiences on Metro MicroTransit translate into increased ridership on Metro fixed-route services from current and new customers?
5. Can Metro MicroTransit perform as a cost-effective alternative to underperforming fixed-route service(s)?
Attachment A summarizes the review and findings related to these five questions.
Opportunities for Action
Like most transit services, MTP is a complex and relatively new pilot trying to achieve a range of goals and performance measures. Some initial goals-parity with per-trip costs of fixed-route service and wait times of 15 minutes or less-have not been possible with existing resources and operations. That said, MTP customers have a very positive experience, may become full Metro system customers, and value the service being provided.
Potential next steps for the MTP include: 1) end MTP and discontinue MicroTransit
service, or 2) continue the MTP but with operational changes.
Option 1 - End the MTP and discontinue MicroTransit Service
One option for the MTP is to end Metro Micro and apply lessons learned to future
projects and services. However, the impacts include, but are not limited to:
• Loss of population access to transit for nearly 350,000 residents, including in EFCs and loss in first/last mile connections as currently 20% of Metro Micro
customers connect to fixed route transit using the new offering);
• Loss of potential new customers as 11% of Metro Micro customers are new to Metro);
• Loss of a well-liked transit service with the 4.8 out 5 customer rating; and
• Loss of jobs/pathway for existing and new operators
Option 2 - Continue the MTP but with Operational Changes
One way to partially achieve the original MTP goals and work toward achieving
performance measures would be to discontinue or curtail service in some Micro
Zones and concentrate as well as conserve resources in remaining Zones. Additional
steps could be taken such as:
• Incrementally Raising Fares to original planned fare of $2.50 (current MTP fares are $1 per trip as an introductory fare)
• Shifting operating costs to capital costs (vehicle ownership, and/or as well as purchasing land for regional deployment hubs vs leasing) to reduce operating costs and improve overall financial health;
• Streamlining operating hours (current MTP hours of operation are generally from 5am-11pm) to address the demand for more service levels as indicated by fail search percentages.
• Structuring future contracts with better accounting for time-of-day and
performance delivery to remain useful to customers and cost-effective for
Metro.
• Discontinuing or curtailing service in some low-performing Metro MicroTransit zones with consideration of continued service in zones where bus lines were eliminated/reduced due to NextGen.
Factors for considering zone optimizations, reductions to realign service, and software parameters adjustments to improve cost efficiency can be seen in Attachment D.
Equity_Platform
EQUITY PLATFORM
The MTP sought to also address inequities in the availability and affordability of on-demand ride-hailing offered by private companies, which are often less available in communities of color and areas with lower median household incomes. Part of this effort included asking appropriate questions in our April/May 2023 Mode Shift Survey that examined how we can provide better availability and affordability through the MTP program.
To generate the broadest sample possible, the survey was issued through three methods: (1) an online survey, announced via email in English and Spanish; (2) an on-board survey conducted by bilingual outreach personnel; and (3) a telephone survey in English and Spanish of people booking through the Metro Call Center in September 2022 who opted-in to be contacted. A total of 2,875 Metro MicroTransit customers completed surveys. The survey was available in English and Spanish. Completion rate for English-language was 80%, Spanish-language was 78%. 95% (n=2733) of the surveys were completed in English, 5% (n=142) were completed in Spanish.
Initial survey results indicate:
• More than half of respondents identified as female (53%), 40% identified as male, 3% as non-binary, and 0.3% as other genders.
• Compared to Metro customers overall, Metro Micro users identified as Asian/Native Hawaiian/Pacific Islander (18% vs 7% overall) and White/Caucasian (28% vs 12% overall), compared to riders identifying as Black/African American (10% vs 14% overall) or Hispanic/Latinx (40% s 58% overall).
• Compared to overall Metro customer household income, Metro Micro users identified as under $15,000 (19% vs 39% overall), $15,000-$24,999 (14% vs 23% overall), $25,000-$49,999 (19% vs 21% overall) compared to $50,000-$99,999 (16% vs 11% overall) or $100,000 or more (13% vs 6% overall).
While all Metro MicroTransit zones contain EFCs, there is a range of EFC coverage among zones:
|
Zone |
% of Land Area in EFC |
% of Population in EFC |
|
Watts/Compton |
68.0% |
69.8% |
|
El Monte |
50.6% |
73.3% |
|
LAX/Inglewood |
33.2% |
40.3% |
|
Highland Park / Eagle Rock / Glendale |
19.3% |
31.7% |
|
North Hollywood / Burbank |
19.2% |
29.5% |
|
Altadena / Pasadena / Sierra Madre |
9.9% |
23.7% |
|
UCLA / Westwood / VA Medical Center |
5.5% |
10.6% |
|
Northwest San Fernando Valley |
3.9% |
7.2% |
For context, 31% of the land area of the eight Metro MicroTransit zones are in EFCs.
Metro staff continues to monitor changes to daily operations for equity related impacts.
As the MTP seeks to increase ridership and efficiency, with an eye toward reducing cost per boarding, Metro staff will be conscious of the potential impacts on equity.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The MTP supports strategic plan goals #1.2 and 2.3: Metro MicroTransit is an investment in a world-class transportation system that is reliable, convenient, and attractive to more customers for more trips. Metro MicroTransit was designed to improve customer satisfaction at customer touch points by offering an accessible, flexible service that better adapts to customer demand and needs.
Next_Steps
NEXT STEPS
Metro staff is in the process of drafting a business model based on lessons learned that appropriately assigns risk and responsibilities to Metro and the private sector based on expertise to maximize cost efficiency, service quality, innovation, and productivity based on lessons learned during the MTP.
With that in mind, at the September Board meeting, Metro staff anticipates final recommendations about the future of MicroTransit with a potential limited time extension of the current contract. This will afford staff the opportunity to develop new solicitation packages to be released in Fall 2023 based on the improved service model, should the Board approve service delivery of Metro MicroTransit beyond the current contract.
Attachments
ATTACHMENTS
Attachment A - Evaluation of the Metro MicroTransit Pilot Project
Attachment B - Peer Agency MicroTransit Operating Summary
Attachment C - Comparison of Service Coverage and Access
Attachment D - Evaluation Findings
Prepared_by
Prepared by: Roxane Marquez, Senior Manager, Transportation Planning (213) 922-5724
Dan Nguyen, Executive Officer, Operations Administration (213) 418-3233
Reviewed_By
Reviewed by: Conan Cheung, Chief Operations Officer, (213) 418-3034
