Related Links

• 2025 Investing in Rural America Conference
• Transportation Access as a Barrier to Work

Transcript

Tim Sablik: In May, the Richmond Fed hosted its sixth annual Investing in Rural America Conference in Roanoke, Va. The event brought together researchers from the Fed and community leaders to discuss the challenges facing rural places and elevate solutions that are working. In today's episode, I'll take you into one of the sessions from that conference that focused on innovative solutions to the lack of public transit in many small towns and rural communities.

For rural residents without a car, including older adults and those with disabilities, a lack of public transit can keep these individuals from work, school, and medical appointments. But mass transit options like trains and buses aren't as easy to implement outside of more densely populated cities and suburbs. Some communities have developed on-demand microtransit systems to fill the gap.

Rodger Lentz, city manager of Wilson, N.C., described how his town decided to replace its fixed route bus system with a microtransit solution called RIDE.

Rodger Lentz: We ran, for a long time, a fixed route service and that just didn't seem to be working for our community as well as we would like. It left a lot of gaps.

These buses only ran once an hour. Only 40, 45 percent of the city had access to transit and it was not accessing where major employment hubs are currently. It was designed around downtown being the major employment center and that had long since changed. The bus system had not changed with that.

Sablik: A community group in Wilson identified the inefficient bus system as a major impediment to increasing employment in the city.

Lentz: This group did surveys. They found two reasons why unemployment was high: lack of access to child care — we've talked about that at this conference — and lack of access to reliable transportation, and we're talking about that now. I remember sitting in the room and we said the city of Wilson is not in the child care business, but we're in the transportation business. We'll tackle that. County, you're in the school and social services business, [so] you tackle this issue of child care. We started on a journey.

We finally launched in 2020. We were launched a little earlier and this thing called COVID hit. All the transit systems were shutting down, but we launched. The result was going from this fixed route system that covered 40 something percent of the city to a microtransit system that covered 100 percent of the city and got people to major employment centers. In five weeks, the system matched what the fixed route system was carrying, which at its peak was about 1,450 trips a week. We just had some days where we did over 1,000 trips in a day.

Sablik: David Fols is the transit director for Bay Aging, a nonprofit that provides a variety of services to residents of Virginia's Middle Peninsula and Northern Neck regions. He described how the organization expanded its transportation options to include microtransit.

David Fols: Before us, we had no transportation. We started a demand response or a door-to-door service, doing it in 12 counties. You'd call 24 hours in advance. We would come to your door, pick you up, take you where you needed to go in the service area. We had a deviated fixed route system in a couple areas, where it was like a fixed route but they'd go three-quarters of a mile off.

We started microtransit and replaced the deviated fixed route with the microtransit. That works very well — about a 15-minute response time. You use your app. If there's an older citizen and they don't have access to smartphone, they can still call in and get a ride.

We did 131,000 rides last year — 26,000 of those were with the microtransit. We just converted one of our systems over to microtransit in December. We were averaging 80 rides a month before that. We're at 326 rides a month with the new microtransit, so it makes a big difference.

Sablik: Mitch Elliott is the transit director for the nonprofit group Mountain Empire Older Citizens, which serves Lee, Scott, and Wise counties in southwest Virginia. With no fixed public transit system, Mountain Empire was formed, in part, to address the rural region's transportation needs.

Mitch Elliott: Like a lot of small communities, there were a lot of taxi cabs. Each one of the little towns had a taxi service. And then Medicaid transportation came along and, all of a sudden, the taxi cabs were out of business.

We started in 1974 with home-delivered meals and things. When we went into the transit business, we were — just like Rodger here — all demand response. We would go to someone's house, take them where they need to be, and then we would bring them back when they needed to come back.

Sablik: But it became apparent that this system, as well as other on-demand, medical transportation through Medicaid, wasn't quite meeting the needs of the community.

Elliott: The person that needed to ride had to have a 24-hour notice to ride. Even with Medicaid transportation, they'd have to call five days in advance. People don't know when they're going to get sick.

Not only did we see the need, but we have a lot of people in our area that are elderly and disabled. They couldn't go to the pharmacist after they went to the doctor because they'd have to book another trip.

I'm a voice for the voiceless. I think microtransit will be the saving grace for some of our rural communities. If you can show me a vibrant transit system, I'll show you a healthy community.

Sablik: It took some convincing to get community leaders on board with the idea of an app-based microtransit solution, but Elliot said the results have been transformative.

Elliott: We had a couple of people there that were living in a homeless shelter that never had a job. The reason they couldn't get a job [was] they didn't have any way to get back and forth to work. So, when we started this program, all of a sudden they had a way to get to employment, had a way to apply for a job, and a way to get back and forth to it. So now both of them are now out of the homeless shelter and have an apartment of their own. So, it empowers people.

Sablik: In Wilson, a city of about 50,000 people, Lentz said they faced some similar challenges and pushback to replacing the fixed bus system with an on-demand system based on an app. They needed to come up with some creative solutions to ensure the new transit system remained accessible.

Lentz: You mentioned the fear of the phone. That was one of the criticisms early on. So we, of course, wanted to provide both a phone option that you could call the number and talk to a live person, and then the cellphone app option. People have migrated. It started off at maybe 70-30: 70 percent app, 30 percent phone. I think we're about 85-15 app-to-phone booking.

We also had a unique thing where they also have to follow the rules the state of North Carolina has for Uber. So, they can't take cash on the vehicle. We have folks that were cash-based riders and we had to come up with a system to accommodate them. So, if you didn't have a debit card, or were afraid of putting your debit card in your cell phone, you can come to our customer service center just like you would have bought a bus pass. You still do that. That was how we handled the unbanked, so to speak, is making sure they still had access to the trips.

Sablik: For Wilson's residents, microtransit has been a much more efficient solution than the old bus system.

Lentz: We regularly survey our riders. Fifty percent report they use it for their commute to work. That was not true of the bus system, at all, and you can see it in the trip data. Middle of the day was the peak time for the fixed route. Now we have a distinct morning and afternoon peak, just like if it was traffic on a highway, right? So definitely, people are using it to get to work.

Sablik: Microtransit has also empowered the residents of the Middle Peninsula and Northern Neck.

Fols: Fifty percent of our ridership is work related, about 18 percent for medical, retail is about 17 percent. And then we partner with the local community college. We give the students free rides.

We hear lots of stories. "My car was broken. You got me to work until I was able to get my car fixed." I've had people I've met that say, "I rode your system for five years and I was finally able to buy my own car."

Sablik: A key feature of all three microtransit systems is keeping the cost low for riders, around $1 to $2 per trip. Elliot explained how they fund the service while keeping fares so low.

Elliott: Part of our funding comes from the FTA [Federal Transit Administration] and it's passed through the Virginia Department of Rail and Transportation. They provide 50 percent of our funding and our localities have to come up with the other 50 percent. Also, the capital or the vehicles that we use, it's the same way, except the FTA comes up with 80 percent of the [cost of the] vehicles. The state of Virginia applies 16 percent in the locality or the public transportation [agency has] to come up with 4 percent of the vehicles. So, that's how we can afford to do that.

Sablik: One of the things that keeps costs down for Wilson's microtransit system is using the app to constantly identify more efficiencies.

Lentz: Every ride is a shared ride. You don't do any of it. The computer does it. So it says, you live over here. This is the route that it's going to take to get you to go to your destination, kind of like a deviated, fixed route.

It sets some parameters that we've ended up tweaking to make the system more efficient. It says, here's a ride that someone just asked for and it's going in a similar direction you're going in. So, we're going to go pick that person up on our way. You might get dropped off first or you might get dropped off second, depending on where everybody's origins and destinations are. That's what makes it work so well.

Sablik: Although the overall cost of RIDE is more than the bus system it replaced, Lentz argued that it is a far more efficient solution for a smaller community like Wilson.

Lentz: We started off with the same budget as the fixed route. I would say that budget has doubled. We were at 1.3-ish million [dollars]. We're at 2.6-ish million.

But let's put that to an apples-to-apples comparison. If your goal is to improve transportation, we would have had to invest more money in the fixed route system. So if you think about at 1.3 we're covering 40 some odd percent of the city and we're running buses once an hour on the route. If we want to go to 30 minutes, I got to have more buses, more drivers. Maybe it doesn't double the cost, but the cost is going to go up.

Now I need to cover 100 percent of the city. Let's say our Via system, our RIDE system is picking up, on average, in 18 to 20 minutes. Now I want to run the buses three times an hour [and cover] over 60 percent of the city. I would dare say we would have a $6 million system, not a $2.6 million system. So, I think from an efficiency and cost standpoint, this was really the best way for us to go.

Should the city of Charlotte replace its fixed route system with this? Absolutely not. It's too big of a city. I think in those bigger cities, [microtransit] should serve the transit desert and connect people to a very robust fixed route or light rail. Wilson, N.C., will never build light rail in my lifetime.

So, what is the right system? What's the right tool for Wilson? The right tool in southwestern Virginia might be a little bit different than what the tool is in Wilson versus Northern Neck. I think what you have to do, if you're interested in improving transportation, is really look at your community.

Sablik: To learn more about transportation challenges and solutions in small towns and rural communities, you can check out a recent article in the Richmond Fed's Econ Focus magazine that we'll link to in the show notes.

The investing in Rural America Conference is just part of the Richmond Fed's ongoing effort to better understand the challenges facing our small towns and rural communities and share what we learn. You can find more, such as our Rural Spotlights, on our website. And, don't forget to check out our June 11 episode on child care access in rural communities.