Transit Leadership Summit: New York Summary Report

Quality of the transit experience. A convenient, attractive and comfortable transit experience is key to helping transit agencies grow and diversity their customer base, thereby increasing modeshare and farebox revenue.

Participants identified several components to a high-quality experience:

• Frequent and reliable service: Transit needs to be competitive with other modes of transit.
• Amenities: Comfortable seats, wi-fi and other amenities mean that customers can work and socialize while traveling. This is a critical advantage for transit, compared to other modes of transportation. A comfortable and productive commute is likely more important than a fast commute to attracting customers.
• Better communication with customers: This is particularly important with younger customers, who are committed transit users and sophisticated social media users. Real-time information is expected for this generation.
• Branding and good design: Customers’ perception of transit is critical to its success.

Fare policy

Fares must be set effectively and equitably; but how? Raising fares is always sensitive politically; a structured formula set by an independent governmental body can help to ensure that fares keep up with inflation and increases in labor costs. Fares should be set high enough for the agency to provide quality service and amenities, but also be designed to accommodate those customers for whom transit costs are a significant portion of their income. New fare collection technologies can help facilitate this segmentation of the market. Transit agencies seeking to adopt a merchant-based fare system should work together with other agencies for a unified fare payment standard to reduce costs with banks.

Financing

Transit investments are expensive, and government funding is difficult to come by in these tough times. Transit agencies can diversify their funding sources:

• Farebox revenue: The farebox recovery ratios of the agencies participating in the Summit varied from 27% (Los Angeles) to 200% (Hong Kong). There are many reasons for these variations, of course, including the use of the system, the density of urban development, and operating patterns.
• Partnerships with the private sector: Involving the private sector in the development of new transit systems can help infuse a project with up-front cash, complement the skills of the public agency, and insulate the public sector from politically difficult situations like fare increases and labor negotiations. The public sector, however, should set the goals of the project and closely monitor its private partners.
• Value capture: Several transit agencies have engaged in successful partnerships with private developers to build dense, mixed-use nodes around train stations; and have captured, via those developments, new revenue. If a transit agency owns the underlying property, it can lease out the land for redevelopment. Even if the agency does not own the property, it can work with the local government to structure a property tax system that generates revenue for the transit system (tax-increment financing, for example). These dense residential or commercial development have the added benefit of generating new customers.
• Congestion pricing: London, Stockholm and Singapore – the three cities with congestion pricing – as well as New York City – a city which has considered it – were all present at the Summit. In Stockholm and Singapore, pricing is primarily a congestion-management measure and the revenues do not go to transit. But in London, the revenues from pricing congestion are used to subsidize the transit system, which of course helps to provide a viable alternative to driving (the scheme New York considered also involved a similar cross-subsidy).

Making the case

Public transportation is too often taken for granted. But many of the most significant challenges that cities face today – stagnating economies, congestion, long commutes, carbon emissions, etc. – are best addressed by building a strong public transportation system. Building the environmental and economic case for public transportation is critical to ensuring that the government continues to fund transit at appropriate levels. New metrics for measuring the benefits of transit on greenhouse gas emissions, or on the economic climate, would be effective.

Governance

A civic organization independent from the government can be the most effective advocate for public transportation. The organization can make the economic and environmental case for transit to the public institutions that fund it, as well as to the public, helping to forestall any potential NIMBY opposition to projects.