Palo Alto council extends Palo Alto Link on-demand transit contract for 12 months while staff studies options

PALO ALTO, Calif. — The Palo Alto City Council on June 17 approved a staff recommendation to extend the Palo Alto Link on-demand transit contract for one year, directing staff to work with the provider on options to adjust service or wind the program down if needed.

Council action followed a staff presentation outlining ridership and funding questions, public comments from the transit vendor and business stakeholders, and council debate about whether the service is financially sustainable without ongoing grants.

City transportation staff said the pilot, which began in March 2023, delivered more than 45,000 completed rides from July 1 through Dec. 31 of the most recent reporting period and that roughly 40% of riders fall into categories staff identified as —vulnerable— (seniors, people with disabilities, veterans). Staff said about 30% of total ridership are seniors. The city's original general-fund contribution plan included roughly $760,000; the version of the budget discussed at the council's June deliberations included a $500,000 city commitment for fiscal 2025—26, with the possibility of additional grant support.

Transportation planning manager Nate Baird told the council staff had reworked the recommendation after receiving direction during budget discussions the previous night. —We heard your concerns about the cost and cost effectiveness of the Palo Alto Link service,— Baird said, summarizing staff's updated proposal to extend the contract through June 2026 while pursuing grants and transition planning.

Staff identified two grant lines that could substantially reduce the city's subsidy if awarded: a Transportation for Clean Air (TFCA) grant (staff said the city requested about $456,000 and received about $441,000 in the prior cycle) and an allocation from the Santa Clara Valley Transportation Authority (VTA) —innovative transit— set-aside. Staff said the VTA application requested roughly $1.4 million; staff also told council they had previously received a larger discretionary award during early implementation.

Joe Martin, a representative of Via Technologies (the vendor operating the service under contract), said Via would continue to work with the city on service options and wind-down planning. —We're…