The future of public transit requires a symbiotic relationship between traditional public services and commercial innovators to help citizens travel that last mile or two between home and job.
“Right now we’re faced with a pretty dynamic shift in the way people get around,” with bus ridership in most urban areas down 15 percent to 20 percent, impacting transit budgets, according to Ted Hamer, a managing director of Global Infrastructure at KPMG.
Meanwhile, the rise of the sharing economy is changing customer expectations, with mobility-as-a-service companies offering more paths from A to point B than the bus, on demand. All this is occurring during a significant decline in infrastructure investment and a projected increase in miles traveled thanks to shared and autonomous vehicles that will worsen congestion.
The panelists delved into one potential part of the solution: microtransit, which offers flexible shared minibus or van trips on demand where and when gaps exist in bus and other public transit service.
As detailed in Accelerating mobility, KPMG teamed up with shared microtransit company Via to run simulations, and they concluded that microtransit options provide high time value of money, as microtransit is both convenient and cheap.
The data show that the average microtransit trip lasts only two to four minutes and is almost 70 cents less than bus service per trip.
At an average distance of only 3–4 miles per trip, microtransit can complement the bus routes that 90 percent of customers live near, and serve a societal role as well.
“As cities talk about mobility as a service and integrating all these different ways to get around, [they] can achieve not only economic and growth outcomes, but also really important social outcomes that shouldn’t be lost on anybody,” Hamer said.
In Detroit, for example, it’s hard for a lot of citizens to get around, car insurance costs are the highest in the country, and there’s a lack of regional cooperation and investment in transit, according to Mark de la Vergne, the city’s chief mobility officer responsible for integrating new mobility technologies and services with transit and infrastructure.
“Detroit is a really good representation of the challenges with mobility and transportation, and how that can really impact an overall economy of a city,” he said. Whether it comes to employment or access to healthcare, “the inability to just get where you need to go holds people back.”
Via already offers approximately 2 million rides a month globally, and it sells contracted transportation services to cities and transit agencies. The company is about to launch two Federal Transit Administration-funded projects around Seattle and Los Angeles, according to Zachary Wasserman, the company’s director of Business Development.
“All these different partnerships… are making the existing public transit infrastructure better for the people who use it, and we are bringing more people into the shared use mobility system by giving them a viable alternative to driving on their own,” he said.
The next problem to solve is funding, and that’s fundamentally a political question, Wasserman added. He said he expects to see one or more bills at the federal level creating new funding sources for transit agencies to own and operate their own microtransit systems, as well as some local ballot initiatives.
“In the next five to 10 years, this mode is going to migrate from the periphery of our transportation system to the core, and really become a cornerstone of our transportation infrastructure,” he said.
Cities like Detroit are interested in these types of new solutions because they can’t cover every square mile with the frequency customers are looking, even if they are investing in their transit system, de la Vergne added. For example, Detroit launched a pilot last year with Lyft to focus on the first and last miles while city buses run less-frequent late-night service.
The biggest challenge is understanding how to put all the solutions together seamlessly in a true system, de la Vergne continued. Richard Threlfall, global head of Infrastructure at KPMG International, agreed, adding that that public leaders have to facilitate the entry of mobility solutions into a city environment due to capacity constraints.
“You can’t just escape by putting drones in the sky, because capacity is going to be constrained there as well,” he said. “The effect of [adding more shared mobility vehicles] is to bring everything to a standstill in our cities. We have to counteract that by finding modern technology, and ways of creating that shared transit environment.”
Detroit takes a partnership approach to working with companies, rather than viewing their role as purely a government regulator, de la Vergne said. “This is the challenge for a lot of cities…. They’ve been doing planning or administering of paperwork and things like that, and not really thinking through how you actually take this from square one to implementation.”
Transit authorities and local governments are struggling to work out the new regulatory environment they need to put in place to bring innovation into the city without negative impacts, Threlfall said. “‘How do you get that balance right?’ is a question I’m asked almost every day, wherever I go in the world.”
De la Vergne added that companies are facing a similar struggle in trying to work with various governments and agencies “because they’re facing 95 million different regulatory frameworks across the world.”
Gary Silberg, the Americas Head of Automotive at KPMG in the U.S. and host of the conference, ended the session with some final words.
“The cities that have world-class, multimodal transportation will be the most innovative cities in the world. And the Luddites that are out there, who are trying to over-regulate and not let technology adapt, I think will be the laggards.”
To access this panel’s presentation, please click here.
To access the KPMG whitepaper on this topic, Accelerating mobility, click here.