Step Aside, Uber. Bridj Is the Next Wave of Transportation Disruption

bridj

by James A. Bacon

Later this month, 13-person vans emblazoned with the Bridj brand will begin ferrying Virginians, Marylanders and D.C. residents to destinations throughout the Washington metropolitan area, filling an under-served niche in the transportation marketplace. For $3 to $5, little more than the cost of a bus ticket, riders will be able to ride directly from Point A to Point B as long as enough of them are willing to share the ride. The trips will be 20% slower on average than if passengers drove their own cars, but the cost will be less than operating and parking a car. Trips will be marginally more expensive than a bus ticket, but they will be 30% to 40% faster.

“We aim to fill the doughnut hole between car and bus,” Bridj CEO Matt George told me in an interview yesterday. “We don’t have routes or schedules. The routing is dynamic. People tell us where they need to go. We direct them to a pop-up mass transit stop. The vehicle expresses them to a drop-off point within a five- to ten-minute walk of their destination.”

Bridj vehicles carry 13 passengers, have comfortable seats and come equipped with Wi-Fi and USB power. That makes passengers’ time on board more productive, George said, whether they want to check their work email or play Flappy Bird.

The Boston-based Bridj doesn’t see itself as a transit company, however. It’s a technology company. Its core competency is matching supply with demand: identifying clusters of people who want to travel between the same two locations at roughly the same time. The company outsources the actual driving to local partners who are licensed as operators to provide the vehicle and driver.

“We’re looking at billions of data points a day to understand where the city is moving,” George said. What are those data points? He won’t say — it’s proprietary. However, the company website refers to “dozens” of data streams, and it invites prospective riders to submit home addresses and work addresses online. The 25-person company has two research teams dissecting the data. One is led by an MIT PhD, the other by a Columbia University PhD.

Bridj is enlarging the market for mass transit. George said that, based on its Boston experience, about 20% to 30% of riders are new to mass transit. Bridj will provide transportation connections to parts of the Washington metro area that don’t have bus service. In Washington, like Boston, a third of city residents don’t own cars. Similarly, 40% of the jobs in each metropolitan area are inaccessible by transit in 90 minutes or less.

However, the other 70% to 80% are transit riders — Bridj’s gain is the local bus company’s loss. Municipal bus companies tend to be financially precarious enterprises. Would they not see Bridj as the same kind of threat to their operations as, say, Uber represented to taxicab companies? Will Bridj stimulate the same kind of political backlash that Uber did?

I asked George that question, and he gave a mixed message. On the one hand, he affirmed strongly that Bridj is far more efficient — up to nine times more — on a cost-per-passenger basis than conventional transit companies. The standard model for municipal transit companies is to run on scheduled routes at scheduled times. The buses rarely travel full; indeed many travel almost empty. Moreover, city buses typically cost ten times more than Bridj vans. The average cost per passenger trip for municipal buses in Boston is in the realm of $13 to $15 per passenger trip, said George, adding the caveat that he hadn’t checked the figures recently and could be off somewhat. By contrast,  Bridj buses run full. The company charges $3 to $5 per ticket, depending upon whether it’s on-peak or off-peak traffic — and it makes a profit.

On the other hand, George downplayed the idea that Bridj represents a threat to city bus companies. Bridj shares its data with city bus companies. (He didn’t say to what purpose, but I would conjecture to help bus companies optimize their own routes.)  “They see the ability to work with Bridj in the future,” he said. “We’re open to discussion.”

Bridj announced its move into the Washington market in late February. “We’re in the final stages of vendor selection,” George said. “We’ll be on the road in the next couple of weeks.”

Bacon’s bottom line: Just as Uber turned the economics of the taxicab business on its head, Bridj is transforming the transit bus business. It’s expanding the market for transit, but it’s also siphoning off existing mass transit riders. I can’t help but think that at some point bus companies will start complaining that Bridj is “skimming the cream,” weakening them financially and endangering their ability to maintain service to the poor. Insofar as the transit bus business is bigger than the taxicab industry, I would expect the political pushback to be commensurately bigger than the opposition that Uber faced.

But there is one big difference. Uber was unapologetically confrontational. Bridj appears to be taking a much lower-key approach to entering the Washington market. George is shrewd to consult with local authorities in advance and position Bridj as a “partner.” Insofar as George can provide valuable data that enables bus companies to improve their operations, municipal transit companies actually may welcome Bridj into the market.

Regardless of how the vested interests might feel about Bridj, the company brings a welcome transportation alternative to the Washington regions. Any innovation that expands the marketplace for shared ridership and spurs sluggish local transit companies to up their game is a good thing.

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7 responses to “Step Aside, Uber. Bridj Is the Next Wave of Transportation Disruption

  1. I don’t think Bridj and similar affect transit at all because I think the income demographics are not the same and I have to wonder – how many folks who use transit and don’t drive make enough money to justify paying more for transportation.

    I think there may be a niche market for Bridj and I support it being a player in the game like I do with Uber – with caveats that were followed up in Virginia with legislation.

    I think uber and Bridj are exploiting customers who don’t really like conventional transit and money is not the issue but as much as we make about transit running firm fixed routes that often run not full or even empty – I do doubt that people are going to pay more for a service that is not at least as reliable in terms of time/place/trip time. In other words – folks who pay more expect to get to their destination at the same precise time every day within 5 minutes are so.

    a potential new customer that adds delay to others is going to be a deal-killer for many. People expect consistency and reliability for a service that purports to be better than conventional transit.

    there is nothing inherently magical about the technology that Bridj would use that would prevent public transit systems from also utilizing it – except if they did – they’d be abandoning the traditional fixed-schedule that makes transit dependable and reliable to riders.

    Every bus stop has fixed times when buses will arrive and the folks that use transit rely on that schedule.. they plan their activities around it.

    if you change it to say that some days the “bus” will be 15 minutes earlier (or later) for pick-up or destination, and you don’t know when those variances occur on a predictable basis – I don’t think people will like that kind of service – no matter the money.

    so if I ask – what existing demand is not being met… what would the answer be? Pick up and your house and delivered to your work at the same time every day – yes. Can that standard be met for a reasonable price?

    By the way – I do not buy the ” we are not a ___ service, we are a technology service… anymore than I do for online airline reservations…or Amtrak, etc.

    what a bunch of bull!

  2. tax issues – between people who are independent contractors and W2 wage employees.

    basically – the division is with respect to whether or not an employer tells a worker HOW to do a job on a daily or hourly basis verses a fixed contract that defines the work performed.

    Fed Ex for a while was operating with drivers being independent contractors but the IRS felt they were actually directing the workers.

    what’s the difference?

    it’s pretty simple. W2 employers pay into FICA for social security and Medicare directly as part of their wages – whereas employers do not do that for independent contractors – and those workers have to pay FICA out of their earnings.. which occurs at tax time .. a huge bite that most of them end up having to owe the IRS that collects the FICA tax from independent contractors.

    here’s an example of the issue:

    FedEx Illegally Labeled Employees As Independent Contractors To Cut Costs, Kansas Court Finds

    “FedEx drivers were illegally misclassified as independent contractors for years despite being treated like employees of the company, the Kansas Supreme Court found on Friday. The ruling moves FedEx Ground employees around the country a few steps closer to collecting hundreds of millions of dollars in back pay.
    From the late 1990s through the first decade of the 2000s, FedEx set contract agreements with delivery and pickup drivers in order to avoid the higher costs associated with making the drivers full employees. Independent contractors are not protected by the same labor laws as payroll employees. The contracts allowed FedEx to bill drivers for their uniforms and equipment and protected the company from having to pay overtime when drivers cracked the 40 hour weekly mark.”

    http://thinkprogress.org/economy/2014/10/07/3576714/fedex-driver-misclassification-kansas/

    independent contractors will not only get killed at tax time every year but wen they retire – they’ll not get as much social security – as employers do not pay their share of FICA when the employers are classified as independent contractors.

    ” Judge: Uber, Lyft drivers may have employee status”

    Uber Technologies and rivals such as Lyft may have to begin treating drivers as employees rather than independent contractors, a federal judge in San Francisco has said, potentially dealing a major setback to the on-demand ride platforms.
    “The idea that Uber is simply a software platform, I don’t find that a very persuasive argument,” U.S. District Judge Edward Chen said in court Friday, as reported by Bloomberg News.”

  3. Bridj appears to be a fixed endpoint company with flexible pickup within those end points. This type of service could work in Tidewater, except for the part where passengers would have to walk from the naval base gates to their places of employment. Downtown Norfolk would probably work pretty well.

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