Friday, February 25th, 2011
You might have a hard time believing I’ve spent most of my career in consulting due to the lack of Power Point presentations on my blog. While I’ll admit to not being partial to the tool, I can create frameworks. Going forward, I’ll occasionally share some that are relevant to cities, starting today with public transit.
Last year I won first prize in a global transit competition sponsored by the Chicagoland Chamber of Commerce. The goal was to devise a strategy for boosting regional transit ridership to one billion rides annually. If you’d like, you can read my winning entry, which won out over 125 others from around the world.
My plan includes over 50 potential actions that could be undertaken. You could think of them as being organized around the following framework.
In short, to boost ridership you need to create ridership demand, which you accomplish by increasing the number of transit addressable trips, then making transit the mode of choice for them. You then have to supply the capacity and pay for it, as well as creating an appropriate governance and operating model structure.
Generating transit addressable trips comes primarily by boosting CBD employment and land use policy changes. Making transit the mode of choice involves creating a transit service with the right mix of price, end-to-end journey time, and quality of experience versus other modes. Capacity is provided by more efficiently utilizing what you have and building new where appropriate. Financing – which includes capital and operating – typically comes from a mixture of federal assistance, sales taxes, and fares. I would favor a greater reliance on transit value capture, however.
To give some further perspective on this, I’ll share some considerations around various aspects of the framework.
Generating Transit Addressable Trips
Transit addressable trips are those that can reasonably be served by public transit. For example, a trip to Wal-Mart anchored shopping center or a suburban office park is generally fairly difficult to service by transit, at least for choice riders. We need to generate demand for more of the trips that are.
For work trips, the place to start is the Central Business District. CBD’s are generally fairly dense, constitute the largest single employment base in the region, were historically served by transit and thus are walkable, and are generally the focus of the transit that exists today, at least in the United States. The more jobs in the CBD, the better for transit.
Unfortunately, this is a challenging matter. Jobs have been decentralizing from downtowns for decades. Most cities have a fairly low percentage of their regional jobs in the CBD. This isn’t per se a problem as long as the CBD holds a significant job base, as it does in places like New York and Chicago.
The problem is that outside of the tier one cities, CBD employment has been experiencing absolute declines. Last year a Toledo Blade series documented how all of Ohio’s top seven downtowns were losing jobs. Even a great performing city like Columbus lost over 12,000 private sector downtown jobs between 2000 and 2005. This is not to pick on Ohio since I’d speculate most other places would show the same.
I have done a lot of thinking on this topic, but we’ll have to save that for another day. Suffice it to say that this will be a challenge outside of tier one cities. But as the key to the central city’s tax base, it’s an important matter to tackle even without the transit considerations.
Beyond that, land use policy is something I’m sure my readers already get. You need some level of density and walkability along transit lines and near rail stations.
Making Transit the Mode of Choice
Apart from a small hard core, I fundamentally do not believe people will choose to ride transit to save the planet or otherwise because it is the right thing to do. Rather, they are going to make the mode choice that seems best to them based on a combination of price, end-to-end journey time, and quality of experience.
Price again is where the CBD is poised to shine since that typically features expensive parking. This is the easy lever to win. Outside of CBD commuting though, the price equation can change dramatically. When you can park for free near a restaurant, for example, the price of round trip bus fare for two ($9 in Chicago) is a material amount of money. Heck, you can sometimes valet park for less than that. This off peak, non-commute price disincentive is one reason suggested that small cities should have fareless transit.
Price is also a consideration for automobile. Pricing roadway travel, especially congestion pricing to help ease peak of the peak travel, could potentially help transit even more. Also parking prices and taxes.
End to end journey time will almost always favor the automobile. It’s tough to address that. Most of the periods that feature express runs are during peak periods, targeting CBD commuters only, which is a group that already has reasons to take transit. Again, this is going to be tough for transit, but not necessarily a killer.
Quality of experience is an interesting one. Generally I think many people would prefer the private interior of their own car to a bus or train with other people. However, there’s a lot that can be done to make the experience better, as anyone who has used a first class overseas transit system can attest. And of course commuting in bad traffic is like a form of torture at times.
Also, the rise of wireless devices means transit time can be productive time. This might even favor longer commutes by transit since you can get some uninterrupted work time. Many people I know get lots of work done on Metra trains, for example.
It’s obvious that we need to build the capacity to serve the market we want, but I’d like to highlight the idea of optimization of existing capacity. Public transit is to some extent like an airline. Once you decide how many vehicles and runs to put on the street, it is more or less a fixed cost business to operate. So you want to make sure that none of those seats go empty.
As with many things, adding capacity at the peak of the peak period is costly. For example, the CTA spent $550 million to lengthen platforms to enable eight car Ravenswood L trains that are only needed during rush periods. The rest of the time that capacity is useless.
To avoid having to add this type of very expensive but limited use capacity, we should look at how we can shift peak demand to shoulder periods or off peak. Variable pricing is one way to do this. I already wrote about this in my post “Transit Pricing Reconsidered.”
Of course, this is a nice problem to have. Many smaller cities would dearly love to have fully occupied buses.
How do we pay for this? Typically capital comes from a mixture of federal grants and bonds backed by sales taxes. Operating subsidies also come from things like sales and real estate transfer taxes. One problem with this is that it implies funding a more or less fixed cost system with variable/cyclical revenues. Without healthy reserves, this will lead to periodic “doomsdays”.
My preferred method of financing is transit value capture, where transit is funded through increases in the land values created by transit. I wrote about this previously as well.
Governance and Operating Models
This is not the sexy part of transit, but needs to be carefully considered. Often the current structures are more or less the result of legacy choices and aren’t appropriate to the current or desired environment. Changing them can be politically difficult, however. Part of this is recognizing that no system of government investment will be made purely on an ROI basis. Thus we need to find a way to strike the right balance among civic objectives in a way that enables real benefits to be delivered.
Obviously this only touches the surface of these items. I just wanted highlight some of the matters that must be considered when planning transit systems inside of an overall high-level framework for doing so.
This post originally ran on January 21, 2010.