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The Great Debate of Public vs. Private Transit

Apr 16, 2015
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Bus

Last updated January 2017

#ThinkTransit

Private vs. public transit is a controversial issue and has recently been heavily contested. The big question, the one that has everyone talking stems from the level of government subsidy for transit. How much is optimal? Do riders want luxury over convenience, or do they just want to have choice?

Some attribute the increase of private participation in the transportation industry to the fact that there is more deregulation due to the government’s inability to manage and fund transport infrastructure. With the MAP-21 bill expiring May 31st 2015, the amount of funding for the nation’s infrastructure is currently in limbo, which is not sitting well with transit professionals and riders alike.

As in any industry, there are many options for customers, this is also true of public transit. Passengers have several choices, they can take a taxi, ride a subway or join a ride-sharing program to name a few.

With so many private companies entering the transportation sector, one big question remains. What is the unique competitive advantage that allows private firms to offer a higher price and still survive in the industry? 

A Closer Look at Luxury

[via PSFK images via Leap]

Leap is one of the many luxury bus services that have entered the transportation sector. It stands in company with other start-ups including Chariot, Uber, Loop and Lyft in San Francisco. All these start-ups are private passenger transport services that take commuters through routes similar to San Fransico’s main line, The Muni.

San Francisco’s main public transit option is the SF Muni, which costs an adult $2.25 to ride. Leap’s luxury bus service costs $5-6 for an adult trip. Leap is a complete departure from your typical public transit bus experience and offers an enormous number of perks to its riders. Word on the street is that the Leap bus is also commonly referred to as the “anti-muni” by members of the young tech-focused demographic in San Francisco.

So, what gives Leap its edge?

This bus service has one driver and one employee on the bus at all times. It has upgraded seating options, a conversion nook, laptop bar, USB chargers, outlets and free Wi-Fi. You can also buy coffee and snacks from local organic food suppliers while riding. While this all may seem like an extravagant way to travel (and an expensive one at that), data shows that people are choosing these services over the public transit options in their cities. So, do riders really want all of these bells and whistles, or are public transit agencies missing something else?

What is the difference between $2.25 and $6.00?

Leap’s $6.00 per trip price tag is a major departure for riders, but evidence shows that commuters are opting for these luxury bus services. We drilled down to determine exactly what the key driving force is behind commuters’ decisions to get off public transit and choose these expensive private alternatives. We managed to narrow it down to one thing; exceptional rider experience.

The public transit sector needs to step up their service to that of their private company counterparts. We are not saying public transit needs to offer coffee and wait staff, but it is imperative to their success that they consider the experience of their riders. A 2015 survey by San Francisco’s MTA found that only 65 percent of riders deemed service good or excellent.

Private companies are recognizing that their passengers are tech-savy and innovative. Allowing passengers to pay with their mobile devices, easily check the availability of seats and charge their electronics are small additions to the rider experience that have a substantial impact. These private companies are simply incorporating key elements that significantly improve the rider experience. Taking a page from this book, if a public transit agency were to increase their focus on the rider experience and incorporate some of these “luxuries” would we see ridership numbers double? Triple? We think so, do you?

Download our whitepaper to learn more about how mobile phones are making a significant impact on passenger experience.


 
Bruce’s 25 years of experience in building, designing, and implementing Traveler Information solutions for the Public Transit Industry have afforded him a rich and diverse industry, solutions, and technical background. Bruce develops the strategic vision and detailed plans for the Trapeze Traveler information suite, makes important contributions to the design and functionality of the products and he ensures that the ongoing development of is driven by customer and market needs and demands.
 
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