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Welcome to another installment of our Evolving Industries series. Join us as we take a deep dive into changing markets, technologies, and consumer expectations, and learn how leading companies are surviving and thriving in some of the world’s most unpredictable industries. In this edition, we sit down with Jeff Hiott, Vice President of Imagination, Research, and Industry Benchmarking for the Capital Metropolitan Transit Authority (Capital Metro).
It’s no secret that the pandemic has had a staggering impact on the transportation industry. In 2020, daily routines that relied on public transit came to a halt, and still haven’t returned to what they once were. On top of this, transportation providers have been working to evolve their services to minimize their impact on the environment.
Jeff Hiott has seen firsthand how the industry has changed over the years. With 14 years of experience at the American Public Transportation Association (APTA) as the Vice President of Technical Services and Innovation, he has deep industry experience and knowledge at both the national and local levels.
Jeff is now the Vice President of Imagination, Research, and Industry Benchmarking for the Capital Metropolitan Transit Authority, a public transportation provider that serves the Central Texas region, including Austin and surrounding areas. CapMetro operates buses, rideshare programs, special events services, commuter rail, and demand response and innovative mobility services.
In our conversation with Jeff, we learn how public transportation agencies navigate the multiple forces impacting the industry, and how innovation and technology are being leveraged to better connect communities to jobs and opportunities through public transportation.
The story of the transportation industry can be told in three acts: pre-COVID, the COVID period itself, and the hopefully soon-to-be post-COVID new normal.
In 2014, the transit industry hit its high-water mark in per capita ridership, something not seen since the 1950s. After achieving this milestone, ridership began trending downward and most transit agencies experienced declining ridership year after year, with a few exceptions for areas like Seattle and Austin, until the bottom fell out during the COVID crisis of 2020.
In particular, agencies saw demand for rail and bus services, which had been historically consistent, steadily decline over those five years. When asked what drove that change, Jeff Hiott replies, “That is the million dollar question!”
Jeff did offer some insightful clues, noting that during that period the pendulum of convenience swung back to favoring single-occupancy driving as car ownership increased and gas prices went down. Additionally, as the health-conscious nation began biking on a large scale, facilitated by the introduction of bike share and dockless bike and electric scooter programs, this meant fewer and fewer people utilized public transportation.
It was also during this time that the country experienced the densification of cities. Self-contained communities sprang up, even in smaller cities, offering people opportunities to live, work, shop, commute, and thrive without the need for public transportation. The impact of this perfect storm on transit agencies quickly deepened in 2020 during the COVID pandemic.
During COVID, transit agencies saw ridership plummet; in the early stages of the pandemic, essential workers and public transportation dependent people comprised most of their ridership. Furthermore, safety protocols that limited capacity to 25 to 50% to observe social distancing rules led to vehicles operating mostly empty, impacting operational costs, agency bottom lines, and the environment.
“The federal government came through big time,” Jeff Hiott stated. Transit agencies received more money through the Recovery Act than they ever had. In Austin, this allowed Capital Metro to offer Zero Fares to provide no-cost transportation to essential workers.
Additionally, the Act relaxed regulations governing changes to schedules, allowing agencies the ability to temporarily alter schedules without having to go through the normal review and approval process. This in turn allowed Capital Metro to adjust its routes to meet unprecedented transportation needs more quickly for their community.
Now, as agencies begin to emerge from the pandemic, they are finding that the landscape in which they operate has changed considerably.
Before the pandemic, transit agencies like Capital Metro used ridership as a key metric to monitor progress. Their triple bottom line goals of providing safe, equitable, high-quality transportation services to their community and staying financially sound while minimizing their impact on the environment are directly impacted by ridership.
Agencies monitored an ever-shifting environment impacting consumer convenience factors such as gas prices, parking options, and wait times, which are found to greatly impact demand for public transportation. Additionally, external regulatory factors ensuring equitable service, safety, and other regulations that impact operations were closely monitored to ensure compliance among other “normal” factors.
Now, in the still-evolving aftermath of COVID, Capital Metro and other transportation agencies across the nation face the prospect of a new normal. For example, there’s the prospect of prolonged remote work or hybrid arrangements where employees are able to work from the comfort of their own homes. Arrangements like these are not new, but they have greatly accelerated as telework-hesitant businesses learned they could effectively operate without the traditional in-office work environments. This will not only impact overall demand, but also traditional peak times, making the scheduling process even more complex.
This phenomenon has also led to an ancillary shift in demographics impacting transit agencies. Because employees can work from the location of their choice, many are choosing to relocate. Jeff explains that Capital Metro is currently experiencing such a change as more people from the Pacific Northwest and California are relocating to Austin. He further explains that Capital Metro is fortunate as many of those coming to Austin are already familiar with public transportation, which makes their job of acclimating residents to public transportation much easier.
Finally, the transportation industry itself is not insulated from the worker shortages other industries are experiencing. Jeff asks, “Where have all the workers gone?” He points out that Capital Metro was fortunate to not have to lay off any employees during COVID and made the deliberate business decision to maintain pre-COVID staffing levels. This worked to their benefit in the early stages of the pandemic, but as attrition continued and the workforce dried up, they found themselves having to make tough decisions around adjusting services in response to shortages of operators and maintenance personnel.
In this post-COVID world, transportation industries will be forced to rethink their businesses. As demographics and demand change and external factors affect their operations, they must innovate to continue to provide safe and high-quality transportation options to their communities while minimizing their impact on the environment.
Despite these challenges, Jeff Hiott is excited by the prospect of rethinking the business, and considering the steps Capital Metro is taking, he has every right to be.
In November 2020, Austin residents overwhelmingly voted to approve a ballot measure, increasing property taxes to fund the $7.1B Project Connect initiative. The funding will be used to expand Capital Metro’s public transportation options and will include the construction of a light rail system to connect the northern and southern parts of Austin as well as creating transportation opportunities to Austin-Bergstrom International Airport (AUS). Additionally, funds will be used to move to an all-electric fleet of vehicles and create nine new park and ride stations.
On Earth Day 2021, Capital Metro reaffirmed its commitment to the environment and announced that the agency’s facilities, electric buses, personal electric vehicles, and MetroBikes are already 100% powered by renewable wind energy through Austin’s GreenChoice program. It further solidified its commitment to Austin’s community goal of having 100% zero emission buses by 2035.
Jeff indicated that they have already taken big steps in that direction and recently awarded a contract for up to 197 battery-electric powered buses (the largest purchase of this kind in U.S. history), which currently represent 40% of its fleet. According to Hiott, technology has finally reached a level that the economics of moving to all-electric vehicles works and transit agencies across the country are starting to “walk the talk” to improve the environment. He fully expects Capital Metro to have its entire fleet replaced in time to meet its 2035 goal.
“In the end,” Jeff remarks, “we are here to provide good, safe, equitable, and reliable service that gets people where they need to go, whether that is to work, the grocery store, or simply out for a fun evening.” To make that happen, a lot of different things need to come together, and data plays a critical role. That’s why he’s excited about the transformational data warehouse and business intelligence initiative Capital Metro is undertaking.
Data from across the organization, including but definitely not limited to electric buses, will empower Capital Metro with actionable insights to make impactful business decisions - decisions that will improve the overall operations, efficiency, on-time performance, and ridership in their journey to improve the overall safety and quality of the transportation services they deliver to the Austin community.
Since the community, its travel needs, and its patterns are changing rapidly, data, technology, and innovation are critical components in helping Capital Metro continue to fulfill its role in keeping its community connected.
Public transportation agencies across the country are experiencing similar challenges to those occurring in Austin. Agencies are rethinking their strategies and are currently making significant investments to turn their corporate data into insights, and ultimately into action, to better serve their community’s public transportation needs. This will be key for the industry as we move into a post-COVID, more environmentally-conscious future.
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