The Difference Between TNC's and Public/Private Transit Providers

By Aaron Rovner July 30, 2019

If you’re looking to enter the field or expand operations as a NEMT provider, it’s important to keep up with industry changes and trends.

Besides making sure you’ve chosen the best software and your drivers are providing the best customer service, you need to understand the biggest change to hit the American transit sector in decades⁠—the rise of the TNC.

What is a TNC?

Transportation Network Companies, or TNCs, are companies that provide on-demand rides like Uber and Lyft.

Generally, these companies act as virtual brokers to distribute trips to transportation providers. Today, there are even several TNC companies that work specifically in the field of non-emergency medical transportation, like RoundTrip and Ride Health.

TNCs were able to successfully disrupt the traditional transit and taxi industries by embracing emerging technology, especially the rising popularity of smartphones, alongside a pioneering model of using private vehicles and treating drivers as independent contractors.

Over time, city and state governments have started to impose regulations on TNCs. For example, in New York City, drivers are now required by law to be paid minimum wage; in other jurisdictions, a certain percentage of TNC vehicles on the road are required to be wheelchair accessible.    

The Difference Between TNCs and Other Private Transit Options 

Historically, the biggest private transit provider has been taxicabs. Because TNCs entered the industry without much regulation, they were able to undercut the prices that taxi companies, who have to pay for permits and special insurance, were charging.

This led to an explosion in popularity for TNCs like Uber and Lyft, while traditional taxis services have struggled to maintain ridership.   

The field of NEMT services has been dominated by traditional private transit options like AMR who have their own fleets of vehicles, in-house dispatch software, and contracts with healthcare providers.

While the TNC model of connecting riders to private vehicles works fine for able-bodied people, providing accessible transportation has proven to be a more difficult undertaking. Private NEMT companies can stay competitive by providing dedicated ADA-certified vehicles and providing specialized training for their drivers that includes “door-to-door” service.

Why is door-to-door service important to NEMT customers? More on that below.   

TNCs vs Public Transit 

As operational models, TNCs are private entities, whereas public transit companies are operated by local and regional authorities.

Initially, the “agile” size of small TNC startups made innovation easy, while larger public transit agencies have been slower to embrace emerging technologies and are constrained by greater regulation (for example, all public transit vehicles must be handicap-accessible).   

While TNCs and public transit companies could arguably work in conjunction, the reality is that the two fields are fairly segregated. In cities with spread-out, poorer populations like Detroit, metro transit providers are pioneering public-private transit partnerships to provide on-demand rides; but these efforts are so far confined to a handful of metropolitan areas. 

Although TNCs are arguably serving a public transit need, especially when it comes to the “first/last mile”, studies have shown that ride-hailing services like Uber often drive ridership away from public buses and trains.

In places like San Francisco and New York City, this has resulted in increased traffic congestion as riders choose private vehicles over public transit.

In the specialized field of non-emergency medical transportation, a few TNCs have emerged, but paratransit (which is operated as an adjunct for people who can’t access regular public transportation) is currently still more widespread.

One important thing that NEMT TNCs can do to distinguish themselves is to provide riders with “door-to-door” service.    

Curb-to-Curb vs Door-to-Door Service 

Traditional public transit is built around serving riders on a fixed route, meaning that riders have to walk to the nearest stop and then walk to their destination after disembarking from the bus or train.

This model works well in densely-populated areas, for people that don’t have special mobility needs (for example, less than 25% of New York City’s transit stops are wheelchair accessible).

For people who live too far from a public station or who have special mobility needs, paratransit and private providers often fill in this gap. Generally, private transit like TNCs and taxis provide “curb-to-curb” service for their riders, where riders are expected to get to their nearby destination without additional help.

On the other hand, “door-to-door” service involves the driver getting out of the vehicle and helping the passenger not only board and exit the vehicle but get to and from the actual origin and destination of the trip.

“Door-to-door” service takes longer and, in the case of passengers with accessibility needs or medical equipment, may require some specialized training.

However, for passengers with special needs, access to “door-to-door” service can literally mean the difference between being able to get out of the house or not.

Providing door-to-door service is not nationally mandated for paratransit services, meaning that some transit agencies provide it and some do not. Therefore, NEMT agencies can not only distinguish themselves but help advance the cause of accessible transit by providing this service as a standard operating procedure.       

NEMT, the Public Sector, and the Private Sector: Multiple Routes to Success 

If you’re considering how to structure your NEMT business, the most important takeaway is that there are multiple ways to find riders and establish yourself.

A TNC is one business model that can be extended to NEMT services, albeit with some modifications (namely, you need an ADA-compliant vehicle). 

While most NEMT services are currently provided by private transit companies, there is also increasing room for public-private partnerships; it’s a great idea to find out if your regional transit association has an annual conference and attend it if possible.

No matter which funding and business model you decide to pursue, make sure that you stay competitive by providing excellent service, including offering door-to-door help as a standard part of operations. Curious for more tips from NEMT industry insiders?