NEW YORK (TheStreet) -- The Livermore Amador Valley Transit Authority (LAVTA), a public transit agency that operates in the California Bay Area suburbs, is testing out a new initiative: subsidized ridesharing trips.
LAVTA, which operates buses in cities such as Dublin, Livermore and Pleasanton, is set to roll out the service on a one-year trial in mid-September. The plan will offer riders in certain areas of Dublin subsidized Uber and Lyft fares to local destinations at prices ranging from $3 to $5, according to the San Jose Mercury News.
LAVTA Executive Director Michael Tree explained the reasoning behind the program in an appearance on CNBC's "Squawk Alley."
"Traditionally in public transit we don't service low-density suburban areas well. What ultimately happens is a reduction in service or no service at all from public transit and a first and last-mile solution really evaporates for residents in that area," he said. "These first and last mile solutions are what's needed to access public transportation."
CNBC's Jon Fortt asked Tree whether or not he was concerned with the logistics of the plan, specifically the efficiency of the routes that Uber and Lyft drivers would take.
"I think you need to take a holistic approach with how we will use the discount with transportation network companies," Tree responded. "I mean, there will be three wins involved. People will get to where they need to go and get on to good quality public transit. There will be a decrease in congestion as people use the ridesharing option. And then finally, public transit wins because more people are using public transit."
LAVTA's test run will put into practice a program that other municipalities have begun to weigh. Officials in Virginia's Arlington County are in the early stages of discussing a proposal that would replace bus routes in low-ridership suburban areas with subsidized rides to Washington, DC Metrorail stations.