Innisfil has done Ontario a great service
“Dis-economies of scale” with Uber Transit an important lesson
The Town of Innisfil has provided two very important services for communities everywhere.
First, 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. The initiative received global attention and Innisfil was presented with awards and recognition for its willingness to experiment with novel services and emerging technologies.
Second, Innisfil admitted this experiment has proven to be an expensive failure. After reporting on the costs of the Uber-based system and the shortfalls in service, staff have recommended that Innisfil Council now look at a system of fixed routes (busses) and Town-established fees for Vehicles for Hire (what the Taxi industry calls “a rate card.”)
“We still believe in the long term there’s a role for Uber and ride share,” Brandon Correreia, Manager of Planning told Councillors on March 25 as he presented Innisfil’s 10 Year Master Transit Plan. “We also think… it does make sense to invest further into fixed transit.”
This statement must have been hard for Councillors to hear, as Uber and Innisfil made an aggressively public deal over its decision to invest in Uber rides for residents instead of busses or shuttles; in fact, the Town spent far more than originally budgeted on the Uber rides. Yet, it still needs to buy busses or shuttles.
I admire Innisfil for its willingness to try new things, and its ability to look at hard numbers and new data in order to make an accurate assessment of the situation.
It should not come as a surprise that Innisfil residents love the last-mile, door-to-door service Uber has been able to offer in part because it is subsidized by both venture capitalists and its own drivers.
Residents loved the service so much, they took more rides than expected, more often. Due to high demand in 2017, 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.
The staff report notes, “Over time, as the population of Innisfil continues to grow and thus ridership increases, the cost of providing the current subsidy structure becomes less financially sustainable for the Town. 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.”
“A situation resembling a diseconomy of scale” is a very polite way of saying, “becomes more expensive with use over time.”
So, while Innisfil residents appreciate door-to-door transit service, Innisfil residents are also the taxpayers paying for it. Innisfil Councillors are faced with an unenviable task: how to reduce the expectations they raised in promising residents they could have higher levels of service at the same or lower cost as traditional transit.
It is easy to predict that travellers appreciate door-to-door service when they can get it: this is the entire raison d’etre of the Taxi industry. No one knows how much it costs to provide door-to-door service better than the Taxi industry does, either.
Now, Innisfil Town Councillors and staff know, too. This has got to be a good thing, as Ontario is proposing to roll out “rideshare” regulations to apply to the entire province. Before any other municipalities – or Ontario itself – rush into setting up transit systems by partnering with Uber or other app-based service, the March 25, 2026 Innisfil 10 Year Master Transit Plan should be required reading.
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Marc André Way is the president of the Canadian Taxi Association.
