All valid business ideas solve a problem, but if you’re not in the business of the product or service that you need, a strategic partnership is the answer.
Every single business has limits in terms of what it can accomplish. There are operational, financial and resource constraints that limit the reach your company can have, and that’s not a bad thing. For example, if you own a fine dining restaurant, you should not also be in the business of dry cleaning laundry and grooming cats, all within the same establishment. There are other businesses who handle these services and have the skills and resources to do a better job.
However, strategic partnerships can make sense, either operationally or to provide resources that you couldn’t otherwise provide. The restaurant could, for example, work with a particular dry cleaner to service all of their linens, thus getting a better rate. You, as a restaurant owner don’t have time to be doing laundry and you wouldn’t do a great job without the right equipment. Better to leave the linens with a business that knows what it’s doing.
Such is the case with the strategic partnership between the Town of Innisfil and Uber.
The need for public transit, at the right price
The Town of Innisfil needed to build an infrastructure for public transportation. The area has a land area of over 260 square kilometres but the population density of 139 people per square kilometre also made it a widespread area. Compare that with the GTA, where the density stands at 4,334 people per square kilometre.
Innisfil was quickly becoming an area where a car was required if you wanted to get around. Taxi services have always been available but the population boom that the town experienced between 1996 and 2016, closing in on 40,000 residents, showed the town staff that they needed to start thinking about a way for people to get around.
A feasibility study in 2015 suggested that a one or two bus route through the area would be possible, but at a staggering $600,000 – $1 million startup cost. While Innisfil was in rapid growth, that sum represented over 1% of the annual budget, which is relatively high when compared against the predicted ridership. The notion of building transit infrastructure, supported and run by the town, seemed less than practical given the operational, financial and resource constraints.
The solution: a strategic partnership with Uber
When town staff stepped away from looking at the transit issue as a service they had to provide, and instead started thinking about how to connect people within the town of Innisfil to help each other out.
They pondered whether there was a way for people to share rides that was safe and economical and entirely based on rider demand, rather than hosting a service that the town was paying for, even when it wasn’t being actively utilized.
The answer? Uber.
Within months, the ride-sharing platform was customized to create Innisfil Transit, a subsidized rider demand transit service where set rates and door to door service were available. It was developed based on the UberPOOL platform, which allows the driver to pick up multiple riders en route, reducing emissions. Furthermore, the initial Transit Feasibility Study showed that the proposed one-bus route would have an approximate net cost of $19,000 per kilometre, while the two-bus route would have an approximate net cost of $26,000 per kilometre. Since there are approximately 460 kilometres of public roads in the Town, a cost of approximately $19,000 per kilometre to provide bus transit on all of these roads could total in excess of $8 million annually. That is far in excess of the funds currently being paid out as subsidies for using Uber as the strategic partner for Innisfil Transit.
The next evolution in Innisfil
Innisfil had been evolving into a forward-thinking municipality that is not afraid to test out new ideas and explore creative solutions to problems, through strategic partnerships. It’s with this kind of out of the box problem solving that residents and businesses in Innisfil win.
It also shows the town as being able to work with businesses in previously untested ways: we’re open to new ideas and new ways of doing things, to solve problems for our residents, commercial entities and other organizations.
Do you have a business idea that could be the answer to an issue we have? Your business could become a strategic partner in Innisfil. Connect with us.