Optimizing transit in response to rapid disruptions in technology and consumer behavior
Overall transit ridership in the United States has declined by nearly 5% over the last decade, driven by a cumulative 15% decline in bus ridership over the same period. To remain relevant, cities and transit agencies need to meet the changing expectations of today’s consumers. To achieve long-term success in managing congestion, providing equitable transportation options and achieving sustainability goals, we believe leaders in both the public and private sectors can embrace emerging technology and technology-driven partnerships.
Technological advancements are impacting all sectors and changing the way we live, play, work, and move. In this digital landscape, the consumer is literally placed in the driver’s seat, requiring both private companies and public agencies to rethink how they deliver and provide consumer services.
Remaining relevant and growing shared mobility will require a reevaluation of existing business models and a deep examination of trends in consumer behaviors to gain insights into the products and services that consumers want, sometimes even before they want them. We must move from mass transit to mass mobility.
Private companies have adapted to the digital landscape, and the public sector, in particular transit providers, has the opportunity to do the same. While fixed-route bus service is still the most dominant mode of public transit, ridership has been in decline in cities across the U.S. Challenges are not monolithic and include, but are not strictly limited to, the continued dominance of the single occupancy vehicle, the rise in the sharing economy, the growing popularity of ride-hailing and ride-sharing services such as Uber, Lyft, and Via, and emerging forms of active and shared transportation. Bike sharing, for example, is increasing in urban centers where over 35 million trips were taken in 2017, up 25% over 2016.1 And, two decades of significant investment to make light and heavy rail transit more convenient have led to triple digit growth in ridership compared to a double digit decrease in bus ridership over the same period, underscoring the importance of investment in transit to boost competitiveness.2 But it is our view that the biggest challenge is a change in consumer expectations where on-demand service not only proliferates, but is also now the norm.
In order to regain its standing as a valued and cost-effective transit option, and position itself for the future, now is the time for cities and civic leaders to rethink and reshape mobility. Declining transit and bus ridership is emblematic of a shifting landscape led by technology and increasing modal options. Going forward, additional challenges such as connected and autonomous vehicles—as illustrated in KPMG’s Islands of Autonomy white paper—will bring added pressure to the survival of the public bus. To keep transit alive and well in the digital age, transit providers have an opportunity to meet consumer needs by leveraging emerging technology and partnerships that complement and enhance bus service. This can be achieved by the following:
Communities of all sizes can win by adopting these approaches. The implications are profound. For many, the bus represents the only viable form of transportation. Equitable transit is critical to achieving access—access to education, jobs, and healthcare. Indeed, the benefits are broad-based. Bolstering the competitiveness of transit in an equitable way that serves low, middle, and high-income communities is a key ingredient for durable economic growth. At the end of the day, better mobility supports the local economy, connects people to each other and to jobs, and builds more attractive communities.