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Is The Gig Economy Hurting Public Transit?

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To some, it's the shared economy disrupting the old business models. To others, it's the gig economy that denies workers full-time hours and a living wage. Regardless of its name, the new economy is disrupting more than the established business norms. It is forcing grown-ups to live with their parents and is likely causing the decline in public transit ridership.

Between Uber competing for trips served previously by public transportation, and the spatially dispersed gig economy jobs, public transit faces an uphill battle to grow or sustain its market share.

The recent decline in transit ridership in cities across Canada and in the US deserves an inquiry to determine if it is merely a blip or the beginning of a long-term trend brought about by the flux in economy and demographics.

In the past, transit ridership moved in step with the economy. At least for now, that relationship does not seem to hold in the aggregate. Transit ridership has fallen in Montreal, Toronto, and Washington, D.C., despite the healthy economic outlooks. In some other places, such as Calgary, the falling ridership could still be attributed to the economic slump.


The new economic order, partly defined by the gig economy, is creating opportunities, but of the temporary nature where the job growth is more pronounced for part-time employment. In Toronto, for instance, full-time jobs grew by a mere 1.4% in 2015 compared to 7.3% growth in the part-time employment.

Source: Toronto Employment Survey, 2015

The growing labour force that works from home will also cause a dent in transit demand. According to the Transportation Tomorrow Survey, the number of those who worked at home in Toronto increased four times from just over 2% in 1986 to 9% in 2011.

Yet another challenge for transit ridership is the growth in walk and bike trip shares, which in the urban core in Toronto account for one in four trips.

Labour market fluctuations are altering social and cultural norms. Last week, Pew Research Center reported that for the first time in 130 years, Americans between the ages of 18 and 34 were "more likely to be living in their parents' home than they were to be living with a spouse or partner in their own household."

Views about marriage and romance have something to do with this change. But as the Pew report reveals, the real contributor is the diminishing economic prospects of young American males whose unemployment rates have risen significantly in recent decades. Furthermore, real earnings of young men have fallen considerably since 2000. These young men are more likely to live with their parents than those who are gainfully employed.

The unemployed are less likely to commute than the rest. Similarly, the partially employed might travel less frequently, or their commutes end up in areas where public transportation is not a convenient and competitive alternative.

The drop in transit ridership in Toronto has been confined to surface transit, i.e., buses, streetcars, and the Scarborough LRT. In comparison, subway rides increased from 220 million in 2014 to 228 million in 2015. The largest drop in ridership has been recorded for buses, which usually compete for trips to destinations served more efficiently by cars.

The bus-only trips disproportionately carry the lowest-income commuters in the city whose part-time jobs are located at destinations not served adequately by public transit.

For the competing travel modes, public transportation is handicapped by default. Even in the City of Toronto, where transit is readily available in the urban core, transit trips are significantly (59%) longer than are those made by car. Declining gasoline prices make car-based commuting even more attractive.


Lately, we were advised that the Millennials are the generation that will turn the tide on car-based commuting. We might have made too much of their lack of interest in acquiring driver's licenses and have erroneously extrapolated to conclude that they would help increase transit ridership in the future. The Millennials appear equally uninterested in leaving the nest and flying on their own. The shifting economic sands are also not helping.

The governments in Canada have to steer the public transit file with caution. From feds to provinces to local authorities, tens of billions have been earmarked for investments in public transportation. If the decline in transit ridership continues, the planned investments in mostly suburban transit, where it is especially disadvantaged because of longer commutes, could result in even sparser transit ridership.

The sight of nearly empty buses running on high occupancy lanes in the future election years will not be viewed kindly by those stuck in regular lanes. The smart thing to do is to invest in rapid transit on urban arterials with existing unmet demand rather than building speculative transit in the boonies.

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