With a wave of innovative companies capitalizing on new technology and changing consumer preferences, the face of transportation has changing rapidly in recent years, posing important governance challenges to local and federal entities.
On October 30, the Bedrosian Center and METRANS kicked off the Price Research Collaborative series with a panel discussion entitled “NextGen Transportation: Private Sector Alternatives.” Bedrosian Center Director Rapahel Bostic and METRANS’ Genevieve Giuliano were joined by Maged Dessouky from USC’s Viterbi School of Engineering, Jeff Shield, the general manager of Zipcar LA, and Mike Waters, senior director of business development west for Megabus/Coach USA.
The transportation event marked the first in a series of joint events featuring the Bedrosian Center and other USC Price research centers in conversation. The Price Research Collaborative aims to foster critical discussion about both evolving areas of interest as well as the ways in which those policy areas are being implemented.
“Many of our research centers are specialists in particular policy areas, and governance, which is the focus of the Bedrosian Center, overlays and interacts with all of them,” said Bostic. “We thought it would be a good idea to have some conversations both about these policies and the governance structures in which those policy areas play out.”
At the NextGen event, the shifting role of transportation in Los Angeles was examined from several different angles. With more Americans living without cars than ever before—a Bedrosian Center poll of the attendees of the event found that 35% currently don’t own an auto—residents are increasingly looking at new options to get around. From app-driven companies like Lyft, Sidecar, and Uber to established stalwarts like Zipcar and Megabus, alternative modes of transportation have gained momentum for a younger generation no longer convinced that owning a car is the best bet.
“This generation is the most underemployed and in debt, but it’s also smart,” said Shield, the general manager of Zipcar’s Los Angeles operations. “Why own a car when you’re only need to use the asset a couple hours a week? For transportation and mobility professionals, it’s our job to figure out how to take advantage of that demand and give them some kind of a viable, kind of efficient solution where they can have a good experience and maybe they’ll never own a car.”
Ride-sharing could offer dynamic solutions to congestion, according to USC engineering professor and ride-share researcher Dessouky. In looking at the creation of dynamic ridesharing options in places like Washington D.C., he described the emergence of informal transportation marketplaces that can pair commuters with drivers to utilize HOV lanes and create a more efficient transportation option. As the cost structure for transportation changes, the public may see even more dramatic changes.
“I think companies [like Uber and Lyft] taxis aren’t going to really change the marketplace that much,” Dessouky said. “They just make the price of taking a cab cheaper, but when the cost goes up to something like $30 or $50 dollars a trip, people are going to be looking for ways to share that cost.”
Zipcar’s Shield says that his customers are demanding alternatives that suit their need for instant gratification and consumption patterns.
“We’re seeing a shift. It’s about technology and the demand for increased mobility,” he said. “People are used to paying for songs one at a time or downloading a movie at home. Paying for a car by the hour is not that strange of a concept [for this generation].”
But the growth of more transportation alternatives, especially in Los Angeles, could require greater government involvement to create more incentives for developers to integrate innovative transportation solutions.
“I think we could do more to incentivize folks to use mass transit or another form of alternative transportation and continue to pressure commercial developers to provide some sort of traffic demand management program when they’re building new high rises in downtown or Hollywood,” Shield said. “That way, they have a reason to get involved in some way, whether it’s adding a bus stop nearby, trying to build a relationship with the Metro or Metrolink, a bike sharing company or something like Zipcar. For us, finding strategic partners that understand the vision is important.”
For Mike Waters of Megabus, who started his career by cleaning buses at age 15, the transportation industry has experienced a “quantum leap.” Finding a niche in a crowded field of competitors has meant catering to the needs of a younger generation and operating without a lot of costly overhead.
“Our demographic is in that 18 to 35 age group, and when we survey them, among their demands is access to public transit,” Waters said. “Whether it’s subway, rail, or you name it. That’s what they want, and that’s where we typically are. Where bus terminals were built 35 years ago are not always where people want to be today.”
In looking ahead, the panel speculated about the future of transportation, from technology like automation to regulation.
“In our industry we’re going to see the huge effect of companies that don’t operate safely,” Waters said. “The feds could walk in one day and shut them down. In California the high-speed rail project may or may not be feasible at this stage of the game, but the competition is probably going to be one of the things that will impact us to some great extent. Technology changes are coming, especially in our line of business it’s probably going to be related to the power that we use.”
For Zipcar’s Shield, the future is inherently linked to technology and anticipating and investing in that future remains an important part of Zipcar’s plan.
“Probably as we speak right now, the next kind of big hip, slick, techno way to get from point A to B is being developed, but that’s our responsibility continue to invest in technology and be the category leader,” he said. “I think that vehicle technology is also on a very rapid shift, and automation is not as far away as many of us might think. [Another thing is] the proliferation of the different types of vehicles. So we are still in basically a bus-car world, and what you’re hearing here today. But it’s not necessarily the case that the future will be a bus-car world.”