As gas prices continue to climb thanks to Russia's invasion of Ukraine, policy makers are scrambling to find ways to save commuters from the high cost of filling up their tanks.
Switching to hybrid and electric vehicles isn't an easy option for most consumers given the high price of electric vehicles, but a slew of startup companies that are offering cheap on-demand ride hailing services could be one way city governments could make it easier for their citizens to avoid filling up altogether.
"If you look at what’s going on with oil prices going to the moon not only as a result of this crisis but the significant shutdown of supply while demand has been coming back to normal levels, somehow you need to figure out how to be more efficient with public transportation," says James Cox, the chief executive officer of The Routing Company, a Massachusetts based company that provides software to make it easy for cities to launch on-demand shared ride services.
"We had done zero trips in January and now we've done 58,000 trips across five cities," Cox said. "We can partner with cities through a private transportation agency or public assets. We can give them the technology to conveniently and efficiently move people around in an on-demand manner."
In Washington State, Kent, Wash. and Bainbridge Island have both contracted with The Routing Company for new services. The company provides the city with a ride hailing app called Pingo that allows users to pay between $1 and $2 to ride a shuttle bus that picks up at their door and drops off at the destination of their choice.
Wait times are between three and ten minutes and the shared ride adds, at most, about twelve minutes to a direct trip, according to Cox. And once the company has access to vehicles, cities can turn the service on within three minutes, he said.
"If you think about all of these people in a transit desert and how they behave they all drive their own car," said Cox. "Whether it’s through a public agency or it’s done privately, financing a couple of buses and using this technology would enable these people to move around without gassing up 70,000 transportation vehicles."
Cox's Routing Company isn't the only player offering on-demand services to commuters. It's not even the most well-capitalized.
That distinction belongs to Via, a company that has raised over $330 million and is valued at a whopping $3.3 billion.
Via operated both as an independent ride hailing company and a provider of software tools to cities so that they could create their own on-demand services transit services.
The COVID-19 pandemic forced Via to shut down its ride-hailing business and concentrate on selling software to cities. It's a move that places the company directly in competition with Cox's much smaller Routing Company and the Canadian startup RideCo.
The Canadian company is working with some very large American cities like San Antonio, Los Angeles and Las Vegas. These cities are turning to services like Via, RideCo and The Routing Company despite having existing mass transit options.
“Take San Antonio, for example,” RideCo chief executive Prem Gururajan told TechCrunch. “They’ve got certain areas of the city that are well-served by transit because they have high density, whereas there are many other parts of the city where there is low density, and they have first- and last-mile access problems. Fixed-route transit just does not work there.”
Fixed route transit works in extremely high density areas, but most American cities might be better served by these more flexible, and cheaper to deploy, transit options.
“[What] you have now is a city where with our service, they can use dynamic transit in the medium- and low-density areas that feed into the high-frequency corridors where they have lightrail transit or express bus lanes and where they have the demand to fill up the buses,” Gururajan told TechCrunch.
For his part, Cox has spent a lot of time thinking about this. One of the former architects of Uber Pool, Cox joined a team of MIT math whizzes who purportedly had come up with a solution for making on-demand ride hailing work with multiple passengers in a vehicle.
The company's technology flips the traditional method of geolocating a customer and pairing that rider with a nearby driver. Instead, The Routing Company's tech maps the position of every vehicle and their routes and optimizes for the best potential pick up given multiple factors.
No matter the service, the savings for consumers can be tremendous -- and at a lower cost to cities than building new metro lines or buying more buses. Best of all, commuters don't have to worry about parking, driving, or the rising price of gas at the pump. For an extra ten minutes, that seems like a bargain.