next on "kqed newsroom" -- privatizing transit. from buses to shuttles. >> it's a perfect fit for me. >> what's driving the trend. good evening, and welcome to "kqed newsroom." i'm thuy vu. private companies are changing the way many of us are getting to work. for years google facebook and other firms have run shuttle buses to take their employees to and from their campuses. now some start-ups are getting into the transit business. in the past year three new companies have begun offering some san francisco commuters a faster way to work at more than twice the price of a muni ride. scott shafer checks out two of the new transit options.

>> everyone likes having options, right? especially when it comes to your daily commute to work. this week i checked out two new alternatives to san francisco's muni bus system. starting with the newest kid on the block leap. leap launched its first bus route this week. >> so tell me how you found out about leap. >> i read an article on tech fringe that was circulated around our office. i got excited because i live in the marina and i hate the commute every morning. yeah. it's a perfect fit for me. this is my first time. it's great so far. it's really comfortable. spacious. not hot like the 30s which i usually take. >> how long were you taking muni and what was that experience like? >> probably about a year. but i avoided it as much as i could. i took uber a lot. but obviously, with the prices that are, you know always surging it became quite an expensive habit. >> a ride costs $5 to $6 depending on how many tickets

you buy. about double muni fares. leap's vehicles are refurbished buses. there's wi-fi and even a mini bar selling gourmet coffees, juices, and snacks. leap's co-founder and ceo kyle kirkhoff rode with me on the company's only line, the lombard route, which snakes its way from san francisco's marina neighborhood to downtown. kirkhoff says he tried to completely rethink the commute experience. >> do you see muni as your competition? >> we really love muni and we really like mass transit and we think that's an important part of making a city work well, and we really view ourselves as kind of a complementary service to you know help with some of the overflow because you know right now commuters only have two major options to get to work. >> but there's also this kind of tension in the city, you know, with the google buses, the yahoo! the genentech buses. some people are really saying you're creating a two-tier transit system, for the haves and the have nots. >> well, google buses are private and only available to google employees. at leap we're really focused on

identifying the problem areas for commuters and enabling the community to give us feedback on where the mass transit infrastructure needs to be complemented. you know, and we look forward to bringing, you know, service to all areas of the city like potrero and sunset and richmond. >> what about -- san francisco of course is a very regulatory-intense place. what are some of the regulatory hurdles you've had to deal with? >> we've collaborated closely with muni to design a route that doesn't take us on restricted streets or get in the way of their operations. we're really interested in looking at the broader network of transportation options available to commuters and make sure we're doing things that make the city work better overall. >> what about bus stops? >> we primarily use white loading zones throughout the city to make sure we don't get in the way of the city's operations. >> you're not using muni stops? >> we're not using muni stops. >> kirkhoff says investors have kicked in $2.5 million to help launch leap, but they've got a competitor just two blocks away. charity. both companies mimic muni's 30 marina express line. >> how do you think it's different from muni?

for a driver, i mean. >> as a driver i think it's a lot better. we don't have to deal with, you know, rude customers, things like that. people enjoy actually our service. you know. >> using smaller vans, charity's chestnut bullet takes a slightly different route from leap. laura champion has been riding charity for a few months. >> so in terms of comfort and all that, you're guaranteed a seat for one thing, right? >> yeah. it's great. if a van full there's another one five minutes behind. so it's not like you're waiting. you're not on a packed bus. >> yeah. >> you don't feel like you're a sardine packed inside. it's nice. it's a really big relief actually and a lot less stress commuting to work in the morning. >> charity has three other lines, and like leap is targeting a niche market. unlike muni with over 700,000 rides a day. it's like an industrial bakery versus a boutique cupcake shop. these private transit options clearly can't serve everyone. >> there's a company that's

offering a tap on the phone with an alternative to muni. >> i would expect it to be more expensive. >> so how often do you use public transit? >> every day. i take the b.a.r.t. from the east bay, come up to san francisco, then i take the 38-l or 38 regular down to japan town. >> what's that experience like? >> it's smooth. the transition's very smooth. i get off on b.a.r.t., walk right out here to montgomery and ride on there and i'm back in japantown in about ten minutes. i like it. i like it. >> what's your take on muni? >> i mean, it's better than not having -- it's better than not having any sort of way to get around the city, but sometimes, you know, it can be a little frustrating with, you know, people yelling and screaming and getting harassed on the bus. >> who knows? maybe a little competition will force muni to up its game. >> and joining me now to discuss the benefits and drawbacks of private transit services are san

francisco supervisor scott wiener clarissa, a planner with transform, a transportation advocacy organization and charity founder and ceo ali mahobzade. welcome stou all. ali, your company is less than a year old it provides 4,000 rides a week. muni provides more than 7,000 rides a day. what niche is charity filling? >> we're focusing on the commute. so in san francisco like many cities if not the world the peak hours monday through friday mornings 7:00 to 10:00, evenings 4:00 to 7:00, 4:00 to 8:00 are really people trying to do the right thing by doing transit first and most transit systems aren't able to take the capacity of all the computers trying to get either to work or to home at the time. so i'm not sure if it's a niche but it's a large swath of the

segment that we're addressing. >> right now you're in san francisco. do you have plans to extend beyond san francisco? >> we do. we think there's a lot of opportunity in san francisco and afterwards we want to look at the greater bay area and then eventually move on to a second market. >> and supervisor wiener, you are a long-time muni rider. you've done it for 18 years. muni's on-time performance is 58%. it's supposed to be 85%. it has never met that goal. and people complain about muni all the time. do you think that the growth if these private transit systems are a reflection of muni's failure? >> the fact that we're seeing private alternatives to public transportation shows that we have not kept up as a region in investing in our transit systems. our city has grown by 100,000 people in the last decade. the bay area's going to grow by 2 million people in the next 25 years. and bart and muni and ac transit

and caltrain are all bursting at the seams. you can't get onto vehicles at times. and that's because we have not invested at the level that we need to to expand the capacity and reliability of the systems. and so as a result we are seeing lost alternatives. and that includes some of these private services. but just to be clear, even if we did everything we need to do with public transportation if we really want to get people out of their cars, and we can't have another million cars in the bay area we have to give people alternatives. to get people out of their cars even with good transit you have to have supplementary services. car sharing ride sharing, and so forth. >> so you support these new services coming along. >> i support giving residents as many good non-car alternatives as possible, and that includes great public transportation and cabs, and it includes private services as well. >> clarissa, what impact do you

think these private services will have on the public transit system? >> so at transform we really believe that you can't get ahead in life if you can't get around. and that means dealing with the reality that we have currently a bifurcated system where there are people that can afford to drive everywhere and plug up our highways, which look more like parking lots. if you've been on the 101 recently. and then there are those that have to take transit, even if it's unreliable or it's not coming when you want it to come. or bike or walk to get to your destination. so i think the reality is that people want options and these new options signal the need for provision of options that, you know, people currently can't rely on the existing transportation network. >> but you use an interesting phrase. bifurcated system. does this not also set up a different kind of bifurcated

system in the sense that those who can afford to pay, for example, a $6 ride on leap will be able to use these plush posh services and you create a further stratification between those who can afford that and those who can afford a $2 muni ride? >> yes. and so i think that what the private sector has been able to do well is find the gaps in the existing transportation network and actually capitalize on that. and you can decide whether or not that's a good thing. it is getting people out of their cars per se if that is an option that is better than their own personal automobile, i think that where we need to be careful is making sure that type of technology and that advanced solution is accessible to low-income people. so are are there ways these companies can start to really think about the needs of lower-income people that currently are underserved by

transit? you know, there are a lot of people that own cars in places where transit's just not serving them well. >> well, we have the ceo of charity right here the ceo of one of those companies. have you begun to think about that? >> we have. >> how will you serve underserved communities? >> sure. we're really excited because with charity customers are paying closer to $3 a ride rather than a $15 or $20 ride using uber during surge pricing or lyft during primetime pricing. so getting down to $3 is very close to muni in fact. on top of that our customers can pay with charity passes with commuter benefits provided by their employers. so using those commuter benefits like wage works or commuter check, the same ones they would use on muni, caltrain or b.a.r.t., our customers are paying for charity passes with pretax dollars. in other words that's saving them anywhere from 30% to 50% off that 3 1/2-dollar ride, for example. so on a commuter benefit basis

chariot customers are playing closer to $2 a ride. >> but you have limited rides. you don't have rides going into bayview hunter's point or the tenderloin. people who can't afford to do something beyond muni many of them. >> sure. we're very excited. we started with four vans, me driving one of them back in april. and now we're over 30 vans and four routes in just 11 months. so we're really excited to -- we've just expanded to the haight-ashbury. and we hopefully look forward to serving places like the inner richmond, the inner sunset, and places south as well. >> you didn't mention the tenderloin or the bayview. >> well, think about where the tenderloin is. the tenderloin is walking distance to union square. financial district and even soma. so the tenderloin is really not a transit hub, if you will, or places that people need to transit to for most of the major work centers of course. it's also walking distance to

b.a.r.t. stations where people can go to the east or south bay. and bayview hunter's point we're actually speaking with a few commuter activists down there and seeing how we can improve their transit experience as well. >> supervisor wiener, do you think there is some sort of obligation or social responsibility component here for these companies to look at a way to provide services in those lower-income neighborhoods? >> actually, it's not the responsibility of private companies to provide good transportation in low-income neighborhoods. it's the responsibility of our public transportation systems to provide that service. and i think the minute we start saying we want private companies to fulfill our obligation in terms of equity for low-income and working-class neighborhoods, that would be a monumental failure. we need to make sure that muni and b.a.r.t. and all of our systems are providing superb services everywhere they go. it is not acceptable that to get from the bayview to downtown say, on the t that it takes as long as it takes.

that's not acceptable. it's not acceptable how long it takes to get from the outer sunset downtown. and that is an obligation on us as government to make sure we're delivering those services. >> i think many people would agree with what you're saying about what is the role of government and the responsibility of government. but as we saw in scott shafer's piece earlier and as you all know there's been a lot of resentment over, say the google buses. and these services that you're providing for example seem like another symbol of that. the divide between the haves and the have nots. that for $6 or $3 riding on these things you can isolate yourself from the rest of san francisco from the homeless, from the elderly from the disabled, people who don't necessarily have access to these services. >> the best part of my day is 7:00 in the morning when i jump on the chariot service itself, and i meet waitresses like jennifer, who commute from the north end of town to her job at the ferry building and she tells me privately that she doesn't make that much money but the

extra dollar is really worth spending because she can reliably and comfortably get to work stress-free on a very affordable budget. all the way, yes-o to ceos and founders of companies that take chariot. one of our customers, dylan told me he sold his car after two weeks of riding chariot because we did prove to be reliable and he didn't need the expense anymore of a fixed car payment insurance, parking, vandalism and parking ticket. >> clarissa, so the benefits have been laid out. do you have concerns, though, about that stratification, about how if you have more and more people using these services and being more isolated from the rest of san francisco for example, that perhaps they will feel like they have less of a stake in protecting the city's public transit system here in san francisco or elsewhere, wherever these ride sharing services spread? >> so i did mention earlier that i think that there are people

that can afford to even not take public transit. so it isn't that in current society we're without these private companies that we wouldn't have that kind of isolation, social isolation from people that have lower incomes of you. but i think where -- you know it's important to realize that there are people that could probably take that. i mean, chariot's an example of one where it's open to the public. the google buses, for example are not necessarily open to the public. so there is that opportunity to see if it can work for the public. but the reality is that in the bay area costs are skyrocketing. people are moving from san francisco into the east bay and displacing the families that have long been there to even further parts of the region. and our challenges, are we going to have them drive back in because that's their only option. i think with the tech sector involved in trying to find mobility solutions there might be something there. but unless it really understands

like -- i've heard data that says one tech sector worker relies on three low-wage service workers. where are those low-wage service workers going to live? will they be able to afford living in the bay area? more and more people are spending more than half of their incomes on both housing and transportation. and that's the reality of what it means to live in such a desirable location. >> absolutely. and clarissa i just want to jump in. you mentioned the east bay, and it's exciting that the board of directors at b.a.r.t. actually reached out to chariot. and we're discussing actually first mile and last mile solutions to b.a.r.t. stations. what's happening -- >> what does that mean? >> what's happening is that people are actually opting to drive in to san francisco because they can't even find parking at b.a.r.t. stations. so they drive to the b.a.r.t. station a mile away from their home they see the parking lot piled up and nowhere to park and ride so, they end up getting on 80 and driving into the city. that's a lose-lose for everyone

the commuter and the community and all the other commuters as well. with chariot we're exploring solutions where we can solve that first mile solution get that commuter to keep his car in the garage until saturday morning and take chariot to the b.a.r.t. station and run loops around big b.a.r.t. or caltrain centers. and on the other end of the city -- of the commute in san francisco doing a last mile solution for people as well. again, the goal is keeping people -- having people keep their cars in their garage. >> that's interesting. i want -- we're talking about city to city transportation now. so that brings up the question of regulation. and supervisor wiener, who -- this is a two-tiered question. who is responsible for these services in san francisco in terms of regulation? the california public utilities commission told us it only has oversight for companies that operate from city to city. so chariot and leap don't do that yet.

and the san francisco municipal transportation agency says it does not monitor ride-sharing agencies. so it seems like it's this gray area where no one's in charge. >> as i understand it ride sharing in general is governed by state law. so that would be the cpuc. the mta the city really has no jurisdiction over them. other than -- >> but the cpuc says if the organization exists only in one city and doesn't go from city to city it's not responsible. >> well someone has to be responsible. but what we're really seeing is that state law is really really far behind with a hot of theselot of these services. so for example, uber and lyft as well and one other company started these carpooling services where you can call and if they have someone in the area who's already going in a certain direction they'll pick you up too. it's super cheap. it is incredibly affordable to do that. much more affordable than even a cab. and the cpuc rule that it was illegal under state law.

so you're trying to take a service and make it more affordable for people. and the state is saying the law is out of date. so we need the state legislature to comprehensively address this, not by catering to some incumbents like some in the cab industry that want to destroy these services, but to actually conform the law to the modern reality that we're facing and make sure that this kind of innovation can thrive. >> and in fact even the laws that we do have in place now for services like uber and lyft, the cpuc in that chase was playing catch-up catch-up. it wasn't until we had serious questions about insurance, for example, for uber that the cpuc started coming in declared a whole new category for these companies called transportation network companies. so it seems like on a regulatory level we're playing catch-up. >> absolutely. and in fairness to our government agencies, this all happened fast. it came on the scene. and so government is playing catch-up. we have to make sure that these

services that there is a degree of oversight around insurance, around making sure the drivers are well trained, making sure that there are consumer protections in place. that's very, very important. and that is happening and i think it will happen. >> ali, who is responsible for conducting background checks at chariot? do you conduct them? and do your drivers have insurance? >> yes, we do. so we do thorough background checks. we do extensive driver training. we have -- and so -- the second part of your question? i'm sorry. >> do your drivers have insurance? >> so we have actually commercial-grade insurance with chariot. so all of our passengers have, as well as the vehicle, have twice the state limit, or twice the state minimum, excuse me, of vehicle insurance. and our drivers are actually insured by workers' comp. another interesting thing that people don't know about charity is that our drivers are actually

w-2 employees. chariot is paying payroll taxes toward the city and the state and employing -- now we have about 60 full-time and part-time drivers. we're not doing -- we're not playing this 1099 charade of hide the pea, but we're -- >> they're not your contractors. they're actual employees. >> they're actual employees and our retention rate is super high because they really enjoy what they're doing and they know they're contributing to a larger cause of better transit in the city. >> clarissa, i want to ask you this. transportation is a region-wide issue. you all talked about that. to what extent do you think private companies like chariot, like leap provide a solution, and what more would you like to see from them? >> so i think that their existence is kind of telling that they are providing some form of a solution. right? there are people that choose to take that rather than our traditional public transit

system or driving or uber for example, or a taxi for example, to work. i think that where we're increasingly seeing a lot of complementary service that's something i would really encourage chariot and leap and lyft and all the different new providers of transportation service to work with the government. i heard a stat that said about 22% of lyft rides are going to caltrain and there are hot spots around b.a.r.t. stations. that tells me there's some kind of symbiotic relationship that should be mined. if we are regionally trying to get people to drive less. and the reality is that people often only can drive. in san francisco you might have i multiplicity of options but along the peninsula there's less kind of transportation service. so i think we're dealing with the realities of our built

environment and what options you do have out there. i think people do need options and if you can make them more affordable and speak to their needs a little bit more. >> and just real quickly this seems like it's just beginning. ten years from now what do you think transit will look like in the bay area? >> i think that clarissa's point is a really really important one. when you look at the reality of our systems, b.a.r.t. hit 400,000 daily riders a decade before they projected. cal terrain's gone from 35,000 a day to 61,000 a day in just a few years. muni is through the roof. people can't get on these vehicles. so it's not like people are saying oh i don't feel like taking muni anymore. a lot of times in the 30 exes you can't even get on the bus. ten years from now i know what it has to look like. we need dramatically more service. we need b.a.r.t. vehicles. we need more muni vehicles. we need to significantly expand

capacity. >> and all of that is going to take money. thank you for for being here. supervisor scott wiener, ali vahabzadeh with chariot and clarissa cabansagan. thank you all. and now to scott shafer with an update on two stories we've been covering. >> on last week's show i asked the head of the state water board, felicia marcus, why the state hasn't employed mandatory rationing. >> our goals to been to leverage at the local level, not to stand in the shoes of thousands of local water agencies to make decisions. what we've been trying to do is to make clear that there are certain things that aren't okay and that certain things go to the level of -- >> like what, for example? >> like watering your lawn so much that it runs off into the streets. >> yesterday kqed's politics and government editor john meyers asked jerry brown the same question. >> so i'm going to talk to some of the members of the water board and ask them that very

question. but i do think they know what they're doing and they're trying to dot best they can. and we're going to do more. don't worry. if this drought continues we'll crank it down, and it will get extremely challenging for people in california and in some places far more challenging than other places. >> the governor made his remarks at a bipartisan press conference with leaders of the state legislature and unveiled a plan to help communities hit hard by the drought and to make it easier for the state to buy water. and finally, last month we interviewed oakland mayor libby schaaf, who was part of our panel with the mayors of san francisco and san jose. in that interview schaaf used a phrase that has generated some unusual interest. >> you know i love talking about the idea that oakland can grow without selling its soul, that we have a secret sauce in oakland, it's our diversity our artists our gritty industrial flavor. even our birthplace for social

movements. >> recently someone actually filed a public records request with the city of oakland asking for all documents relating to the ingredients and manufacture of oakland's secret sauce. the city has not yet responded to that request. now we believe the ingredients include chipotle and garlic but we haven't confirmed that yet. that is our show for tonight. for all of kqed's news coverage please go to kqednews.org. i'm scott shafer. thanks for joining us. ♪

>> sreenivasan: on this edition for sunday march 22nd. a new isis threat against american military personnel and their families. the pentagon is ordered to release potentially inflammatory photographs documenting the abuse of detainees. what's next? and in our signature segment: the debate over the legalization of sports betting >> let's figure out a legal way to do this where it can be regulated, it can be taxed. >> the debate is, should government be actively encouraging and you know, sponsoring predatory forms of gambling? next on pbs newshour weekend. >> pbs newshour weekend is made