Council Post: How Transit Companies Can Maintain Financial Viability Today

The transit and mobility sector is nothing if not diverse. It ranges from the most traditional of public transportation agencies to cutting-edge mobility startups focused on bicycles and scooters. It encompasses private tour bus and coach operators, airport shuttle services, private ferry companies, and various other private sector transit operators.

Despite their outward differences, all of these entities share one fundamental similarity: Their businesses depend on ridership. Riders mean revenue. Without riders, none of these entities can function for the long term as viable operations — not even the ones that receive government subsidies.

The coronavirus, however, has brought all of these transit organizations — both public and private — the unimaginable: almost no customers. Witness New York City, which has seen ridership levels on its subways and commuter rail lines drop by as much as 90%. These numbers paint a bleak picture for the balance sheets of any transit company or agency.

The numbers also paint a bleak picture for any city that wants to chart a sustainable path forward. While other modes of transport are certainly available — taxis, car-sharing services and bicycles come to mind — these are not a complete solution. Bicycles are impractical for many types of trips or weather conditions, and not everyone can afford a taxi or car service (to say nothing of the fact that too many cars on the roads lead to increased traffic congestion).

This congestion is no small matter: In the U.K., for example, air pollution from vehicles is estimated to cost nearly £6 billion (approximately $7.3 billion) in health bills every year. Ultimately, sustainable communities depend on people using mass transit services, be it the public subway or a privately run bus or shuttle.

So, in the age of the coronavirus, how will these transportation and mobility companies convince people to get back onto their trains, buses and ferries? How will they continue to attract riders and remain financially viable? As the founder and CEO of a digital platform that enables transit operators to manage ridership and riders to plan and pay for their travel, I believe the answer is to embrace digital opportunities.

Going Digital To Win Back the Customer

One of the first things transit and mobility companies can consider doing is making better use of data. By collecting and leveraging real-time data about their operations, they can start to address their customers’ primary concerns so that they feel comfortable embracing transit again.

For example, if I’m a bus rider, I might not want to hop on a crowded bus in the midst of the coronavirus because it would not allow for the proper amount of social distancing among passengers. But what if the transit agency or private bus operator knew when people got on and off their bus, and they were able to share that information in real time? I, as a bus rider, would know that the next arriving bus was only one-third of the way full and that it would offer enough space to ride while keeping a safe distance from other passengers.

Alternately, picture a private airport shuttle operator that could keep a tab on how full shuttles were on a particular route and make adjustments in real time. For example, it could send a longer or higher capacity shuttle to a route that had been filling up faster than expected or increase the frequency of shuttles to ensure social distancing guidelines could be met. Likewise, the operator might ensure a shuttle is taken out of service to be cleaned or disinfected once a certain threshold of passengers has been reached. The same type of disinfection protocol could just as easily be implemented by bike or scooter startups tracking their ridership.

The bottom line is that in a world that has been turned upside down by the coronavirus, using data to optimize operations and provide an enhanced customer experience could help a transit or mobility company.

More and more, transit companies are making the data related to their operations available to be explored openly by data platforms. This data might include schedules, stops or station locations, routes, etc. However, most transit companies are not able to gather information generated by ridership because of a lack of access to this data, which is invaluable in understanding their customers’ patterns, detecting issues, or assessing new actions to satisfy or attract riders.

One possibility to gather ridership information is for a company to build its own app (or add functionality to its existing app). This can be a good option for transit operators that have skills and resources to promote and continually improve the app’s user experience to maintain riders’ engagement. Without a good number of riders using the app, no significant information will be produced.

Transit operators might also consider partnering with digital companies that have mobility apps or platforms for travelers to collect ridership information in exchange for operational information, such as the real-time positioning of the vehicles. (Full disclosure: My company is one of these platforms.)

However, two things should be considered with these partnerships: First, avoid apps that provide white-label solutions for each transit operator, because riders want integration of several transport modes, not fragmentation. And second, use ridership information as the first step toward full digitalization of transit operations, engaging all internal stakeholders to make the necessary shift to embrace this unavoidable change and thus adapting to the new paradigms for the post-COVID-19 transport market.

Although today’s extraordinary circumstances won’t last forever, I believe the need for transit companies to take a new approach to “business as usual” will persist long after the virus has dissipated. From my perspective, those transit agencies and private operators that are able to harness real-time data and use it to guide their operations will be able to successfully navigate this crisis, attract ridership and maintain long-term financial viability. Those that don’t will be like ships at sea trying to navigate without a compass: lost and adrift, heading for the rocks.