San Francisco Transit Startups Folding due to Regulatory issues

September 13, 2015

A recent Forbes article highlights the success of Chariot and the failure of other transit startups.

Among the startups that have stopped operating recently:

  • Night School: A late-night transbay bus service
  • Leap: A high-end commuter private transit service that provided many perks and served the Marina
  • Loup: A cross between uber and a bus (The article notes that after suspending operations their website now shows two routes).

Both Night School and Leap hit regulatory hurdles from the California Public Utilities Commission (CPUC). Night School posted this:

Though they never raised any substantive objections to the safety or soundness of our plan, the CPUC’s actions have effectively made it impossible for us to launch. We have now decided to shut down the company and refund all memberships. … We are not seeking more money or lobbying for a change in laws. After spending much of the past year banging our heads against a wall of bureaucracy, we have reached a dead end.

The Forbes article noted that Chariot has not had the same regulatory issues due to the fact that they use 17-passenger vans instead of busses.

Because Chariot operates vans rather than buses, it is subject to looser licensing, insurance and parking requirements, despite running essentially the same service as the other companies.

This loophole may mean that high capacity vans are the future of private transit startups, at least in California.

Chariot has continued to expand service in San Francisco and now operates seven routes serving a variety of neighborhoods. Their service offers fixed routes with fixed times and operate weekdays between 5 AM and 8 PM. Their website allows users to suggest new routes and the most popular suggestions have a chance to be implemented.

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Chariot offers one-off rides for $5, bulk ride packs for about $3.75/ride and monthly passes for $93. This compares to MUNI’s $2.25 per ride and $70/$83 monthly pass (without/with BART).