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"Missing Middle” is a phrase used to describe housing of medium size, density and expense. Many hot urban markets now produce two housing types that are pricier than this middle ground – high-rise units that cost more to build because they require concrete- or steel-frame construction; and single-family homes, which require individual households to purchase entire land plots. Missing middle is the housing types in-between – duplexes, triplexes, townhomes, ADUs – that aren’t as capital- or land-intensive per unit. Legalizing them has become a goal for affordable housing activists.

Transportation is another big aspect of U.S. urban policy, and I think there’s a missing middle for that too – namely in dense cities. This option sits in-between, and is less expensive than, either car ownership or public transit. But before defining it, let me explain these two more traditional options.

First is car ownership. It’s expensive because, even if people shop America’s competitive used car market, they’re still having to pay for licensing, insurance, fuel and repairs. According to the American Automobile Association, the average driver spends $8,849 per year on car ownership. This doesn’t include parking costs, which are especially high in cities, and would be even higher if drivers paid the full price for it (more on that below).

Second is public transit dependence, which is generally advocated by those who dislike personal car use. Its fiscal costs are less, but its opportunity costs are often higher even than car ownership. A Governing Magazine analysis found that average commute times in 25 large U.S. metros was twice as long for transit users than for single-occupancy vehicle drivers. Another report from the Brookings Institute found that in metro America, only a quarter of low- and middle-skill jobs are accessible by transit in under 90 minutes. Part of the problem is that transit agencies feel obligated to cover large areas, rather than running routes that move the greatest number of people to the greatest number of jobs. As a result, transit doesn’t address people’s needs, helping explain why ridership has declined.

But there’s a “missing middle” that could exist between the monetary cost of car ownership and the opportunity cost of transit dependence. Here’s how I see it working: an urbanite walks onto a street corner within a crowded neighborhood in a dense city like New York or San Francisco. From there, he or she can access a multitude of private micro-mobility options by phone—rideshare, bikeshare, scooter-share, moped-share, or various bus services. Some of these buses are more like vanpools, catering to small groups of passengers who want point-to-point drop-offs. Other buses are larger and follow fixed routes. But because of the ubiquity of these services (and the competition between them), prices are low: between $2-10 for trips under 2 miles.

This paradigm would turn U.S. urban neighborhoods into all-you-can-ride transit buffets. A huge diversity of options could be hailed at cheap rates, meaning every income group would be able to make multiple point-to-point trips daily. This would reduce the need for car ownership, and create better urban mobility.

And it’s a paradigm that, as other world cities show, is doable. But for it to happen in the U.S., two big strategies must change.

The first would be for the government to allow it. For over a century, there’s been heavy demand for private transit, from the early streetcars, to jitneys that arose before WWI, to dollar vans that have operated illegally for decades. Even today, companies such as Uber, Lyft and Lime lobby intensely for the right to operate in cities. But cities have been hostile to the idea for just as long. To name one of many examples, the SFMTA has unilaterally squelched every micro-mobility option mentioned above, in the name of protecting public transit.

The second thing cities should do – beyond just allowing these services – is facilitate them, by leveling the playing field for urban right-of-way. Currently, most of the ROW in dense U.S. cities is used by cars to drive or park. As New York University planning researcher Alain Bertaud writes in Order without Design, this space is often given for free or at well below-market rates, considering the land and maintenance costs it consumes.

This is a sop to people who own cars in these cities, and comes at the expense of those who don’t. If an open market could be used to price, say, curb space, that space could shift to a variety of new uses: racks for bike- and scooter-share, temporary drop-off zones for rideshare, or shelters for bus companies, all of whom could bid on use of the space. These micro-mobility companies would then have space to flourish, rather than always being scapegoated for the “traffic” and “clutter” they create.

If this system ever materialized in U.S. cities—again, by having governments take a more market-driven approach to transport—it would work wonders for urban mobility. A diversity of services would rise to meet the diversity of consumer demand, moving people cheaply and quickly. It would indeed be a third option—the transport version of a “missing middle”—sitting between the cost of car ownership and the immobility of public transit.

[This article was originally published by Independent Institute.]