New York’s Shadow Transits Aim For A Greener Future

Often called New York's "shadow transit network," these vans, some equipped with sound systems, flags, and concert advertisements, have served as a vital link between immigrant communities and jobs for tens of thousands of riders in the city.

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Dollar vans, which have been around since the 1980s, are American spins on the informal van lines that cross so many of the world's metropolises, colorful grassroots transit networks such as jeepneys in the Philippines, rural Chivas in Colombia, and the tuk tuks found throughout Asia. They have existed since the 1980s. While some of these services provide "last mile" rides to the nearest train station, bus stop, or subway stop, others operate regular routes to distant job centers from neighborhoods that aren't well served by traditional public transportation systems. 

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The city's ad-hoc micro transit network has become an opportunity for one local entrepreneur to change the way mobility startups operate in the city as a whole.

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Founded in 2017 by Su Sanni, a Nigerian-American entrepreneur who is based in Brooklyn and Queens and grew up in Brooklyn and Queens, Dollaride seeks to modernize this network by launching an app that allows users to find and pay for rides. (Despite the name, rides today usually cost at least $2.) Now Sanni has created a plan to turn dollar van services — which have played a crucial role in outer-borough transportation for decades, albeit under murky legal circumstances — into a mode of transportation that is both legally regulated and environmentally friendly. 

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This startup, which won a $10 million grant from the New York State Energy Research and Development Authority last fall as part of the larger New York Clean Transportation Prize competition, will be able to install chargers and provide a fleet of battery-powered vans as part of the program. Sanni, a company that has been running a pop-up route in Jamaica, Queens, for the past two years that has used an app and mobile payments, plans to put electric vans in the field this year, as well as to put 35-plus chargers into operation before the end of 2023. Dollaride intends to install a charging infrastructure within the next two years that will be able to support a fleet of 60 to 70 electric vehicles.

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Adding an Uber-like feature to hail a van, as well as electrifying the vehicles, will help users find them more quickly and provide them with a better ride, according to Sanni. Drivers would be able to save 20-40% on maintenance and fuel costs through Dollaride's model, which bundles insurance, vehicle rental, and access to electric charging stations, according to Sanni, by combining the three services. Furthermore, that will help put now-unlicensed operators and drivers on a path to becoming legitimate once they gain licenses. 

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“The cost of getting a city license and getting insurance is very high," said Sanni, explaining the issue of getting a city license. “There is no doubt that these guys are smart. There is a cat-and-mouse game that they are playing because they are trying to save money in order to avoid these expenses. In spite of that, they know that the market is looking for the kind of service they can provide.” 

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Rough road for microtransit

The dollar-van business has deep roots in Sanni's family. Two of his uncles, Fatai Lasisi and Lateef Ajala, who grew up in Nigeria before immigrating to the US, were owners of dollar-van fleets in the late 1980s. It was during his childhood in East New York, Brooklyn, that Sanni recalls walking a mile to reach the nearest subway station; jumping on a dollar van offered an alternative way to get there quickly. At the time, “transit equity” wasn't a term that he was familiar with, but when comparing notes about commutes with classmates in Manhattan, he noticed that his neighborhood wasn't as connected to the city as others. 

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Many other ride-hailing apps have also attempted to combine the convenience of an app-enabled ride-hailing service with the efficiency of larger vehicles by integrating these features. In the past decade, a number of micro-transit startups have emerged in the US, including Bridj, an on-demand bus service that operated in Kansas City and partnered with Ford before it abruptly shut down in 2017, as well as Chariot, another startup that Ford purchased, which shut down in 2019. It is estimated that one Denver route only served 110 passengers in the past two and a half months. Models such as these attempted to collect passengers from all over a neighborhood and connect them in a pop-up fashion. Small towns and rural areas have also piloted on-demand bus services, with mixed results.

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There is a big difference between this and dollar vans, which operate on fixed routes and can take advantage of New York's dense residential population. "People who commute every day just need to be within walking distance of the subway or bus station. They do not need to be dropped off door-to-door as they do a daily commute," said Sanni. “It is a good idea to take a fixed-route approach, because it is efficient, and this way you will save a lot of money on fuel, as well as wear and tear on your vehicle."

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There is also a possibility that Dollaride could differ from venture capital-backed transportation services such as Uber or Bird, which have struggled to make ride-hailing and micro-mobility profitable in recent years. Rather than overhauling a grassroots model of transportation, Sanni merely tweaks an existing one that already exists. 

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“In the case of Uber, Lyft, and other companies, I have been extremely frustrated about the amount of money they have raised, despite the fact that they have spent that money incinerated and have not, in fact, had the impact they claimed they would have, particularly in the underserved communities,” said Sanni. “But having said that, I do appreciate what they have done and I am grateful for what they have accomplished. Another interesting angle here is that they have exposed this massive inefficiency with the public transit infrastructure, right? ” 

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Tapping the Transit Deserts

New York City, being the melting pot that it is, is a perfect environment for these informal networks to thrive. In New York, according to Dollaride, there are around 2 million people who live in a "transit desert," which is at least 15 minutes on foot from their nearest bus or subway stop. 

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when the MTA failed to provide transportation for communities like mine, commuter vans began to operate as a result of that failure. Assemblymember Khaleel Anderson, who represents southeast Queens, testified before state lawmakers in favor of a bill he had sponsored, which would allow these vans to be hailing on the street. 

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In his 2020 paper “Anatomy of a New Dollar Van Route,” which explored the inner workings of this mode of transportation, New York University transportation scholar Eric Goldwyn argues that dollar van service frequency is what makes them so appealing. In rush hour, he has seen dollar vans pass at a rate of one every minute on popular routes. As much as tech-era micro-transit services try to do similar things, they are generally unable to replicate the regularity and speed of the dollar vans, which have become a hallmark of the age of the internet. Furthermore, operators are able to change routes on the fly, unlike the buses of the MTA, which cannot drop a stop or modify a schedule without first conducting public consultations and studies.

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Dollar vans coexist somewhat uncomfortably with formal public transportation. Sanni said his uncle and others, who were looking for a job and sensing an opportunity, got together and purchased or rented vans to provide rides for $1 to workers lacking other options as a result of an 11-day MTA strike in 1980. It has long been a complaint of MTA officials about dollar vans poaching riders and clogging stops for years, since they were illegal for many years, with drivers being pulled over and their vehicles impounded. 

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It was in 1994 that the Taxi and Limousine Commission (TLC) of the city established regulations that allowed the operation of dollar vans in the city. It is estimated that there are about 500 licensed operators in the country, and there are many more without the proper documents. There is a ban on licensed vans from operating along bus routes, and it's not legal for van drivers to street hail a ride from a corner, which causes frustration for drivers and may result in tickets being issued to them. 

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“This is a counterproductive regulation that isn't really in line with the reality of the service, even if the drivers are fully licensed and insured,” Sanni said.

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If Dollaride is to succeed, it will have to thread the needle between cost and accessibility, even as it adds expensive new equipment to the system. Considering the razor-thin margins in the dollar van market, Goldwyn believes that it will be difficult to charge for battery-electric shuttle vans. (Battery-electric shuttle vans can cost about $175,000 each.) There is a simple economic challenge here as well: How can you keep the price of an already rock-bottom ride at the same level while adding an additional layer of technology? A healthy ridership isn't the same as achieving profitability, as ride-hailing services like Uber and Lyft have demonstrated through their use of their services.

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“In the early days of the urban tech app revolution that began 10 years ago, I believe there was a sense that there were a lot of $100 bills laying on the sidewalk waiting for an entrepreneur who was savvy enough to scoop them up," Goldwyn said. “That hasn't been the case in my opinion.”

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The good news is that Sanni will be able to tap into a range of initiatives to boost EV infrastructure, such as Mayor Eric Adams' pledge to electrify a portion of the city's fleet and a plan to install 40,000 chargers citywide by the NYC Department of Transportation. Additionally, he hopes to recruit corporate sponsors for routes that target job centers in order to raise funds. Dollaride is confident that its deep history with shadow mode will help him win over existing drivers and operators, as well as give Dollaride a chance to accomplish what other startups in this space have failed to do in the past. 

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 Fundamentally, Sanni believes that the approach of creating a platform that supports micro-entrepreneurs and provides them with technology and resources is the right one." And that is something that we are taking inspiration from."

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