Innisfil Uber scheme results in “Dis-economies of Scale”
It’s back to fixed routes (like busses) and set rates (like Taxis)
Innisfil’s “Diseconomy of Scale”
“With increased ridership, a rideshare-based system using relatively low-capacity vehicles, as Innisfil Transit does, runs into a situation resembling a diseconomy of scale, as the need for more vehicles to meet ridership demand (and their expenses doing so) would be more pressing than managing increased ridership in a fixed route-based system.”-Page 6 of Innisfil’s Ten Year Transit Master Plan
Innisfil’s much-vaunted Uber experiment might provide Ontario with exactly the information it needs right now.
In 2017, Innisfil was the first Ontario municipality willing to experiment with a new form of transit by subsidizing Uber in order to provide last-mile, door-to-door service for its citizens.
Residents loved the convenient new option and enthusiastically made use of it at rates higher than Innisfil had ever imagined possible. In fact, the cost of taxpayer subsidies for these rides ballooned so quickly, the expense of the program and finding ways to limit use immediately emerged as a municipal issue.
On March 25, 2026, Innisfil went back to the drawing board hoping to put the transit toothpaste back in the tube of the utopian service expectations it helped create.
Innisfil had budgeted $100,000 for the first stage of the program in 2017. Due to high demand, the final cost for the year reached $150,000, forcing the town to use 2018 funds earlier than planned.
In 2018 ridership surged to a total cost of $640,000. This was approximately $250,000 over budget and marked the first time the subsidy cost exceeded what it would have cost to operate a traditional bus. The town paid $1.8 million to subsidize the service in 2024.
On March 25th, Innisfil Town Council received staff’s 10 Year Master Transit plan, which might be summarized briefly as “back to busses with fixed routes, and Taxis with set rates.”
Not busses precisely – but definitely the same concept as a bus, having a multi-passenger vehicle circle the pre-determined route on which most riders can gather most conveniently. “Predictable and cost-effective fixed route transit or shuttle services” is the description provided in the March 25th 10 Year Transit Master Plan presented to Innisfil Council.
Not Taxis precisely either – but a minimum fee of $3.25 with riders paying the balance of the fare above Innisfil’s $10 subsidy. Staff and politicians ground through the minutiae of sustainable and equitable trip fees to determine what to charge to go where, eventually recommending a per kilometer fee after the initial fee and subsidies.
This concept will be familiar to everyone in the Taxi industry. It used to be called “the drop and the milage.”
While Uber, the contract with Uber, and the technology offered by Uber were the only brand-name references made during the March 25th debate to any firm which would provide services over the course of Innisfil’s 10 Year Master Transit Plan, Manager of Planning Brandon Correreia did point out to Councillors that “when we looked at the dedicated on-demand and fixed routes, it could be a contracted service. It would go through a competitive process.”
“We still believe in the long term there’s a role for Uber and ride share,” Correreia told Councillors. “We also think in urban areas, Future Orbit, Alcona and the expansions that we’re working through to our official plan review, it does make sense to invest further into fixed transit.”
Innisfil did all of Ontario a very large favour by engaging in its 9-year “Uber as transit” experiment. It is doing Ontario an even larger favour now by publicly conducting an assessment of the successes and failures of this experiment just as Ontario prepares to roll out a similar experiment province-wide.
For example, staff and Councillors both noted on March 25th that Uber drivers are often not willing to pick up in rural areas; disappear when there is not enough demand to stay busy; and sometimes cancel rides at the last minute, leaving residents stranded. Under most regulated ground transportation systems these things would not be allowed to occur. However, as one Councillor noted, they have not had much control over Uber’s policies in years past. All the Councillors who spoke clearly want much more detailed control over these policies moving forward.
Whether or not Uber will stick around or remain exclusive as Innisfil demands more input into areas like rates and fares or the ability to refuse rides will be seen as a new hybrid system is negotiated.
I’m sure there are ground transportation companies across Ontario that would be happy to bid on providing elements of Innisfil’s newest system. Virtually all of these firms will have more experience in costing rides; adjusting fare rates; providing Accessible services; and ensuring 24 hour and rural services than Uber has. Some of these companies will be Taxi companies; others will be dedicated para-transit firms. Some will be local, home-grown app based services.
In any case, everyone engaged in ground transportation and public transit in Ontario should read Innisfil’s 10 Year Master Transit Plan and watch the March 25th Council video.
Innisfil’s 9 year experiment with using digital app-based administrative services to complement the nuts-and-bolts reality transporting human beings from Point A to Point B has uncovered some new things, and confirmed several that everyone already knew:
- It appears that human beings prefer being picked up at their door to walking to a transit stop or hub. They would like not to think about what this costs financially or in terms of sustainability.
- Riders love door-to-door service when it is free; they like it less when it is only partially subsidized; and they don’t like it when they are required to pay the full unsubsidized meter themselves.
- Taxpayers (and the elected officials who represent them) are keen to provide door-to-door service to residents who need it. They would, however, like capable riders to walk to a transit stop when it saves exponentially large amounts of money.
- Taxpayers don’t mind subsidizing the rides to a reasonable degree. They would like Town officials to determine the most effective level of subsidization: to find the sweet spot that provides rides to those who need them but does not encourage profligate use by residents who can walk reasonable distances.
This used to be known as “public transit.”
As I write this, the province of Ontario is open for submissions to its “Northlander Rideshare Pilot Summary” which closes on April 10th. Ontario intends to create pilot regulations for app-based services like Uber and Lyft in communities between Toronto and Timmins in “Spring 2026,” meaning within weeks. Before it wipes out any of the existing local Taxi businesses which have spent decades perfecting systems to deliver effective, sustainable local services, let’s hope Ontario learns from Innisfil’s experience.
