New Jersey Transit: How The Agency Can Become A Mobility Provider

A new audit shows that New Jersey Transit, once a top transit agency, has fallen. Is it time for a radical rethink of what a transit agency should be?
By Antonio Grana | Oct 21, 2018 |
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By Antonio Grana | Oct 21, 2018 |
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Earlier this week, a full-scale performance audit of New Jersey Transit (NJT) hit the press. NJT is the country’s largest statewide transit agency, providing weekday mobility for 900,000+ people over its bus and rail network. For riders, it was no surprise to see the audit’s results. Not long ago, NJT was known as a premier transit agency. Between 1983 and 2000, NJT won the APTA award for best transit agency or best innovator six times. In 1997 it won both. A deciding factor for many people to move to New Jersey has been the quality of the transit service. Today, NJT has fallen from this peak and become known for its crisis management culture, delays, and safety problems.

The documented causes for this fall are many and some outside of NJT’s control. Many of the critical systems (e.g. Northeast Corridor) and terminals are owned by other entities and require significant capital investment. While NJT has seen a 23% increase in ridership since 2002, it has lost 90% of its state funding since 2010, and is heavily reliant on federal funding. NJT trips, however, are subsidized to the tune of $8 per unlinked passenger trip.

The proposed fixes are what you might expect. Create an effective asset management program. Diversify funding sources. Implement value capture. Leverage real estate assets. Better technology. These are all good and worthy of focus.

Yet the most urgent observation of this report was both the lack of a clear strategy and an organizational culture/structure aligned to deliver on it. This indicates an organization ready for a change. Should NJT simply be trying to return to the definition of “good” from 10 years ago, or is it time for a “rethink”? A real revolution would be to move from thinking of itself as a mass transit agency to becoming a more use-based “mobility company”.

What’s the difference?

A mobility company is different than a subsidized public good. Instead of planning assets and routes first, which are politically driven, a mobility company would be in the business of coordinating data-driven “journeys”. These journeys would be structured around the rapid changes occurring in New Jersey, including shifting demographics, travel patterns, work styles, work locations, and transportation preferences. The transformation could include the following.

1. Start with realigning the strategy around both services and asset utilization. This focuses on superior customer delivery (journey completion and satisfaction), but also reworking assets so that they can be profitable. Services should start to cover operating costs and those that don’t need to be redesigned.

2. Leverage real estate assets to fund and support capital expenditures. This will require changing relationships with the cities NJT serves. Municipalities can support transit access by raising revenue for NJT (taxes, value capture, or other means) or letting NJT develop their property to a higher level of land use to drive revenue and passenger growth. The latter is the model you see in Asia, and is being tested in Florida through Brightline.

3. Be honest and willing to mix modes, truncate services, and adjust frequency to make journeys effective and useful while ensuring adequate farebox recovery (current recovery rate is only 44%). This may mean NJT doesn't provide all services itself, but partners with 3rd parties like micro transit, ride/hail, and private or municipal shared services.

4. Develop a technology roadmap, building point-to-point solutions allowing simple integration of different modes into a combined journey. NJT should offer a best-in-class journey platform that encourages integration from other providers. Transferring modes should be seamless and quick and integrated into one price (note: in some locations this will require driving and parking, and these uses should be integrated into the price mechanism as well.)

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As the audit notes, a major shift in strategy, leadership, and organizational culture are needed for NJT to improve. The state must take steps to allow it to reorganize into an independent governance model that is separated from political forces and the bureaucracy that follows. This will not be easy. But New Jerseyans are unlikely to raise taxes, so NJT has to either cut or transform. Transport is becoming a service that is both tech-enabled and data-driven. To be excellent again, NJT should be on the vanguard of this change.

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