An outlook on ride-sourcing price changes: Implications for future transit agency-TNC partnerships

Ride-sourcing trip prices charged by transportation network companies (TNCs) have increased significantly compared to before the pandemic, causing concerns about the effectiveness of existing and planned transit agency-TNC partnerships. This paper explores three scenarios of future TNC price changes: (1) price trend extension using forecasting models, (2) price increase in response to local policy changes, and (3) TNC/taxi price convergence due to increased competition. We then investigate the impact of TNC price change on the prospect of transit agency-TNC partnerships, using a case study in the Seattle region. For the first scenario, we employ two time-series models, namely ARIMA and PROPHET, to forecast price changes within the next three years (Oct 2022–Oct 2025) using publicly available Chicago TNC trip data. The results show that TNC's daily average price would reach $3.23 per mile, increasing by 40 % from 2019 average rates. For the second scenario, we track significant policies that directly impacted TNC prices in Seattle and incorporate reported price increases. The resulting estimations indicate that TNC prices would increase by an extra 25 % in response to changes in the minimum wage law. For the third scenario, we use publicly available taxi trip data of the city of Chicago and forecast future taxi prices by estimating time-series models comparable to those for TNC prices. The analysis suggests that due to increased competition, TNC and taxi prices are converging and that the average TNC fare per mile could add another 50 % to the forecasted price if TNC and taxi prices become similar in the upcoming three years. These price changes are shown to have a considerable negative impact on the expected cost-effectiveness of transit agency-TNC partnerships. Although such partnerships could still provide many benefits, transportation planners and policymakers should carefully examine the implications of TNC price increases resulting from changing market and policy environments.