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Shared Mobility FAQs: Eligibility Under FTA grant programs

In response to increasing interest from the transit industry in partnering with on-demand, shared mobility services such as ride-hailing companies, the FTA has identified FAQs about funding eligibility under federal public transportation law for FTA grant programs, like the Urbanized Area and Rural formula programs.

The FTA encourages your comments and questions to TransitInnovations@dot.gov. See Shared Mobility definitions.

Shared Mobility Eligibility Under FTA’s grant programs


Can FTA's programs provide funding for emerging shared mobility services?

It depends. FTA grant recipients are responsible for ensuring FTA funds are used for eligible expenses. The eligibility of shared mobility services will depend largely on the specific contracts entered into between FTA recipients and third parties, such as shared mobility operators.  When structuring such contracts, grantees should consider whether the terms of service will meet the legal definition of public transportation, for example, or whether such service may be permitted as an alternative to public transportation within several of FTA’s grant programs. 

FTA funds may be used to reimburse recipients for expenses associated with public transportation capital projects, and in some cases, for the costs of operating transit service. The statutory definition (49 U.S.C. § 5302) of public transportation is “regular, continuing shared-ride surface transportation services that are open to the general public or a segment of the general public defined by age, disability or low-income.”  

Examples of eligible public transportation capital projects include constructing waiting or pick-up/drop off areas at a transit facility, or providing information technology (IT) systems that support the use of shared mobility services.

When federal public transportation law allows funding for transit operating expenses, such as in small urban and rural areas, or for job access and reverse commute activities and ADA paratransit services, FTA may reimburse a transit agency for the costs of contracting with a shared mobility operator to provide shared ride service to the general public. This may be an option for off-peak services or first-mile/last-mile transportation. Where contract services are used, the transit agency must ensure that civil rights obligations continue to be met, as noted in the Americans with Disabilities Act FAQs.

In addition, FTA funds may also be used to support operating or capital costs for alternatives to public transportation, particularly under the Enhanced Mobility of Seniors and Individuals with Disabilities (Section 5310) program or as a job access and reverse commute project under FTA’s rural and urban formula programs. Such costs may include the costs of contracting with a taxi company or shared mobility operator to provide exclusive ride service or for voucher programs.

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What is the difference between “shared-ride” and “exclusive-ride” services?

Local (municipal/state) statutes or regulations, or company policy, will generally determine whether a taxi company or shared mobility operator provides shared-ride or exclusive-ride service. Not all shared mobility services are shared-ride services. For example, if the local regulation or company policy permits the driver to determine whether or not a trip may be shared (for example by declining to accept an additional passenger where there is capacity) the service is not shared-ride. Similarly, if the regulation or policy requires the consent of the first passenger to hire a taxi or shared mobility operator to be obtained before the taxi or shared mobility operator may take on additional riders, the service is not shared-ride.

In essence, services which can be reserved for the exclusive use of individuals or private groups, either by the operator or the first passenger’s refusal to permit additional passengers, is exclusive-ride service, and is not shared ride. Not every trip needs to be shared-ride in order for a provider to be considered a shared-ride operator, but the general nature of the service must include shared rides. A recipient passing funds through to a taxi company or shared mobility operator should request documentation from the company to assure the company is providing shared-ride service. 

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Who may be a recipient, subrecipient or contractor?

In general, the law permits that only states and local or regional public agencies may be recipients or subrecipients of FTA program funds. However, in the grant program for seniors and persons with disabilities (Section 5310), non-profit organizations and private providers of public transportation are eligible subrecipients. Any type of entity may provide service through a contract with an eligible recipient or subrecipient. 

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Is bike sharing an eligible expense?

It depends on the source and use of funding. Federal public transportation law does not define bike sharing as a form of public transportation; however, the cost of installing bike sharing stations and infrastructure are eligible expenses when functionally related to public transportation. The FTA considers bicycle facilities and improvements to be functionally related to transit when they are located within a three-mile radius of a transit station or bus stop. However, the purchase of bikes for a bike sharing network is not an eligible expense. See FTA’s bicycles and transit webpage for information on how bicycles and transit are a win-win proposition.

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Is car sharing an eligible expense?

It depends on the source and use of funding. Federal public transportation law does not define car sharing as a form of public transportation and funds cannot be used to operate those services. However facilities functionally related to transit may be eligible. For example, parking spaces dedicated for the use of car-sharing at local transit stops.

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Are micro-transit services eligible?

Yes. If these services offer shared rides and are open to the general public, these services would be considered public transportation and generally would be eligible. Services that do not meet the definition of public transportation may be eligible as ADA paratransit, as a job access and reverse commute project, or as an alternative to public transportation. A transit agency may contract for eligible micro-transit services; however, the law generally does not permit private firms to be eligible to receive FTA funds as a direct recipient or subrecipient. 

As with car sharing, a recipient may provide for the integration of transit services with micro-transit through the design and construction of an eligible capital project. For example, information about these services can be integrated into electronic signage that stream data to applications as part of an infrastructure project in order to provide the consumer with more transportation options.

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Are private shuttle services eligible?

No. Private shuttle services, which include corporate, regional and local shuttles that make limited stops to pick up specified riders, are not considered public transportation and are not eligible for FTA funding.  

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Is ridesharing, such as vanpools and carpools eligible?

It depends on the source and use of funding. Vanpools are a form of public transportation, and may receive capital or operating funds under FTA’s grant programs through an eligible recipient or subrecipient.

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Are ride-sourcing services eligible?

It depends on the source and use of funding. Ride-sourcing services that provide exclusive-ride service for a single passenger or group are not considered public transportation and are not eligible as a public transportation expense. However, exclusive-ride services may be eligible as an alternative to public transportation in the 5310 program or as a job access and reverse commute project. For example, a transit agency may use FTA funds to provide vouchers for individuals to use an exclusive-ride service.

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Is ride-splitting or dynamic carpooling eligible?

It depends on the source and use of funding. In general, ride-splitting, which allows customers requesting a ride to be paired with others traveling along a similar route, is eligible as public transportation if it meets the definition of shared-ride services. The FTA may reimburse a transit agency for the costs of contracting with a ride-splitting company that provides shared ride service to the general public; however, the law generally does not permit private firms to be eligible to receive FTA funds as a direct recipient or subrecipient. For example, a transit agency could contract with a shared mobility operator to provide a shared-ride service as a first/last mile solution as long as that contract requires both the drivers and passengers to accept any additional riders identified along the trip.

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What are other potential eligible ways a transit agency may support the use of shared mobility services?

Transit agencies can undertake a number of partnerships or contractual relationships with other mobility providers to provide additional mobility options to the public. Examples include mobility management; joint marketing; advertising; integration of schedules or travel information systems; linking to services from Internet sites; and integrated payment systems, etc.  

Additionally, the FTA encourages non-transit uses of transit agency property that can raise additional revenues or, at a reasonable cost, enhance ridership. Incidental uses may include permission for other transportation providers to use transit facilities or parking spaces, as long as such use does not conflict with the intended transit uses of the project property. The recipient must fully recapture all costs related to incidental use from the non-transit entity and any revenues received from incidental use must be used for public transportation purposes.

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How can mobility management assist with coordination?

Mobility management is eligible as a capital expense and can be used to coordinate new mobility services with traditional public transportation and other alternative services. The purpose of mobility management is to improve coordination among existing public transportation providers and other transportation service providers in order to expand the availability of transportation options. The FTA supports the National Center for Mobility Management, which provides technical assistance.  

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Updated: Monday, December 12, 2016
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