Reimagining Public Transportation - Innovation & Opportunities
Associate Director, Boston Consulting Group
Q: You have a world class expertise in transit, having served as Massachusetts Secretary of Transportation as the General Manager of the Massachusetts Bay Transportation Authority - from your perspective, what do you see as the most important opportunities in transit over the next five years?
Transit has a tremendous opportunity to reinvent itself over the next 5 years. Indeed, the market is demanding it. Customers are demanding it. New mobility solutions, lack of investment in rail, and cheap gas are a few reasons commuters have been moving away from transit over the last several years, particularly bus. While bus remains the most efficient way to move customers on our roads, bus has suffered from a lack of focus by agencies and cities. Rather than continue to operate a 40 foot vehicle running on a fixed route that is afforded no preference over single occupant vehicles, agencies have a great opportunity to reimagine the frequency, reliability, connectivity and branding of bus networks that can reduce congestion and improve connectivity.
Q: One of the issues that we see is how dramatically ring-fenced transit in the U.S. is from private investment. Recently, for example, WMATA in Washington, DC began to explore awarding a contract to a private operator for the Silver Line extension. Do you see increased opportunities for private investment in the U.S. transit system? What would those look like?
I think transit systems are increasingly understanding that the private sector is well positioned to deliver operations and maintenance under the right circumstances. The MBTA is studying the possibility of entering into a long term contract with a private operator for its commuter rail network. The contract length could incentivize private investment in rolling stock, facilities and other infrastructure. New Orleans entirely outsourced its transit system in the wake of Hurricane Katrina. I think you need two ingredients for outsourcing to be successful: 1) ensure the private operators contractual incentives (or penalties) are aligned with the outcomes the agency desires and 2) constructive engagement with pre-existing labor unions about what “outsourcing” means and how it may impact their members.
Q: I recently had a conversation with an owner/operator of BRT systems in Australia, Singapore and the U.S., and the most interesting themes in that conversation had to do with value capture (land and air), and also the wave of technology enabling better service, and a better user experience. What are your thoughts in terms of value capture and innovation in U.S. transit systems?
On value capture, there is untapped, but perhaps limited, opportunity for transit. Sure, value capture is a big opportunity in cities with significant density-Hong Kong is probably the best example in the world. However, there are only a few cities in the US with sufficient density that can capture significant value from land and air rights. That said, agencies like MTA and the Port Authority in NY and LA Metro continue to study opportunities to maximize those opportunities. Innovation, on the other hand, is an opportunity for a systems - big and small - to increase ridership, improve the customer experience and drive efficiency in operations. Short of future, game changing technology like autonomous vehicles, there are other less visible ways to leverage technology and can be taken advantage of now: predictive maintenance and monetization of data, for example, that can deliver lower costs and increased revenues that can be invested back into to transit service.
Q: Is there are book, or even a podcast, that you've read recently that puts the world of transit into perspective?
As a Bostonian who grew up on the losing end of our sports rivalry with New York, I recently read “The Race Underground: Boston, New York and the Incredible Rivalry that Built America’s First Subway.” Boston won that race, but it was a fascinating look at the challenges the two cities confronted and ultimately overcame to build America’s first subways: there were as many political controversies and unhappy special interests to overcome as technical and engineering challenges: Tammany Hall squashed the first efforts to build a subway system in the 1850s…the more things change, the more they stay the same.
Rich Davey is an Associate Director at the Boston Consulting Group and leads the state and local public sector practice for BCG. A recognized leader in transportation and infrastructure, Rich has 20 years C-suite experience in transportation. He served as the Massachusetts Transportation Secretary, the General Manager of the MBTA and the CEO of the private consortium that operated the commuter rail in Massachusetts. At BCG, Rich has advised the largest transportation providers in improving operations, reducing costs, increasing revenue and improving the customer experience.