The Corporate Law Group

Efficiencies

Innisful, Ontario, Canada (pop 36,000) wanted to provide a mass transit solution so that folks who didn’t own cars could get to work. The town was getting pressure from students, seniors, and single car families. They found that one bus route would cost $300,000 and they needed more than one. Buses operated on routes, which wasn’t optimal. They asked for help from local taxi companies but none was interested.

So they contacted Uber. Problem solved. The town worked out flat fees for common trips, and subsidies, with Uber. Like most bus service, the rider has to pay something as low as 25% of the cost for most rides. And, unlike buses, no one is ever driving around relatively empty. Each ride is on demand.

Resident Lisa Cameron said, “I think it’s a fantastic opportunity, especially for teenagers.” She added that it could provide her own teenage daughter with the ability to get to a job or simply enjoy the town more. On the other side of the equation, part-time Uber driver Brian Knuff said that, “It’s a fun way to meet new people, and it’s a great way to help the community.”
So what did this cost? Much more than the planned bus routes? The town worked out an initial two month budget of $100,000. After all, evil profits, right? Not so much. The total cost came to $26,462. The average cost, per trip, per passenger was five bucks. The estimated cost for the bus? North of $17 per-person.

Compare that with the disastrous rollout of the government built affordable care act website. Private industry will always be more efficient than any government-built solution. It has to be or it goes under. Every conservationist should be in favor of competitive markets because much less is wasted with private solutions. Competition breeds efficiencies. Now Innisful needs to contact Lyft and get the two fighting it out. Win-Win.