Should The Government Subsidize Low-Income Commuters To Use Uber And Lyft?

It may be more cost-effective than building new public transit infrastructure a new report suggests.

Should The Government Subsidize Low-Income Commuters To Use Uber And Lyft?
[Photo: Flickr user Mark Warner]

If you don’t have a car–and roughly 20% of people on or below the poverty line don’t–then you’re reliant on public transit for getting around. And transit tends to be much better in some U.S. cities than others. In New York or Washington D.C., for example, there’s a bus and train for nearly everyone. In other places, services tend to serve only major arterials and avenues, leaving many without a means to get to work.


A new report proposes an intriguing way to fill in these “transport equity” gaps: subsidized ride-sharing to get people from their homes to the nearest station.

Flickr user abrackin

“If you live somewhere like Atlanta it’s easy to find yourself in a housing complex that’s not within a reasonable walking distance of the transit system,” says Kevin DeGood, director of infrastructure policy at the Center for American Progress (CAP), a Washington D.C. think-tank. “Our purpose is to have an impact on people who are extremely poor and who are maybe structurally eliminated from the economy because they lack access to transportation.”

The CAP report focuses on Atlanta, looking at what it would take to provide Lyft-type services within an area of poor transit access (shown in green on the map). That’s housing more than half a mile from a rail station, or more than a quarter-mile from a bus line. The report suggests diverting 1% of the city’s bus budget to raise $2.3 million. Assuming a $3 per ride subsidy, that would pay for 744,000 trips a year, and help 1,550 people commute to and from work five days a week, it says.

DeGood says the technology behind Lyft or Uber offers a way to proscribe the geography and eligibility of the program in way that would have been difficult with an old-line taxi service.

Uber and Lyft weren’t involved in drawing up CAP’s report, but they seem to be keen to take on a public service role, integrating their networks with traditional transport. Uber is now offering an unlimited weekly rides pass, for example, in Manhattan during commuting hours–and it costs less than the subway. Meanwhile, research shows how the sharing economy could help people on low-incomes as much as hip, middle class types.

DeGood suggests Congress free up restrictions on federal funding to allow transit authorities to experiment with alternative options. And he suggests operators could be more flexible in their thinking, given new technology. Though it’s not yet proven, subsidizing ride-sharing could be more economical than expanding bus routes into low-income neighborhoods.


“Are there new technologies out there that can help transit achieve its goals? What we’re saying is ‘here’s something you could think about differently from the way you did it yesterday’,” he says.

Read the whole report here.

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About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.