Lessons from the collapse of Bridj: Quality counts, but transportation also requires subsidies

Lessons from the collapse of Bridj

THE STARTUP MOBILITY COMPANY that tested the potential for innovation in the transportation sector announced on Sunday that it was shutting down effective immediately.  Bridj might have changed the face of mobility in Greater Boston with the power of its algorithms and its plush 14-seat vans, but there was a vast gulf between the promise of change and the reality of a service that never seemed to catch on.

Informed observers of the Bridj experiment continually questioned whether there was ever any “there there,” whether the self-described on-demand service was really nothing more than a small-scale, fixed-route service with a smartphone app allowing you to book a seat in advance. It had algorithms that I once thought would, but ultimately didn’t, offer a transformative experience.  Bridj became a shuttle van stuck in traffic, and that’s not innovative. Bridj also had a difficult time getting traction in Kansas City, where it was the beneficiary of a sole source opportunity to provide similar carpool services.

The passing of Bridj strikes me as an important inflection point in the story of how innovative ideas are influencing and changing transit.  Bridj is not the first such startup to fail – in San Francisco, a similar service called Leap Transit closed shop two years ago.  There are lessons arising from these experiences that need to be learned. Here are some takeaways that may help inform our thinking:

First, public transportation is expensive.  There is a reason why public transportation systems historically require subsidy – they are expensive to build, operate, and maintain. Fares by definition cannot cover all of the costs.  The public sector is able to provide the subsidy that keeps the MBTA going, largely through a transfer of a portion of the state sales tax.  The private sector – especially venture capital outfits that are looking to make a return on their investment – do not have any obligation other than to make money for their investors.  Let’s be crystal clear: Bridj shut down because it could not close on another tranche of private sector funding.  In other words, without private sector subsidy, Bridj could no longer support itself. This is not unique – take a look at the current giant in this space, Uber. That company lost $2.8 billion on $6.5 billion in revenue last year.  That is a staggering and unsustainable figure without the continued subsidy of private sector investment capital.  Once the private sector decides to stop subsiding Uber, it, too, will face either restructuring and downsizing or the final curtain.

Second, innovation will continue to put pressure on the mobility paradigm.  Many factors are converging: people have expectations and preferences about their personal mobility that are fundamentally different than those of a generation ago, preferences that are drawn more to non-vehicular modes of transportation; on-demand services are both popular and consistent with the expectations reinforced by the technology that fills our daily lives (iPhone, Amazon); rich data sources are being mined enabling actionable, real-time information to influence mobility decisionmaking.

Third, people are drawn to support and use quality mobility services, which is the principal reason why Uber and Lyft are surpassing taxicabs as the vehicle for hire mode of choice.  Quality of experience matters a lot.  Bridj offered a higher quality experience because its quiet, wifi-enabled vans were nicer than the average MBTA bus. But this one differentiator alone was not enough.

These and other factors are driving mobility in the 21st Century, and the public sector must adapt and respond to these changing preferences and expectations.

Bridj represented a potential existential threat to the T.  My biggest concern was that Bridj would attract many higher income riders away from the MBTA, thus beginning a dangerous stratification where the riders on T busses and subways were there largely by necessity, not choice.  Such an outcome would be devastating for the T, but it would also be very bad for the city and Greater Boston because it would underscore the negative impacts of income inequality.  I have said more than once before that the T serves us all best when you see people on the bus in shirtsleeves standing next to people in cufflinks. The only way the T survives, and indeed the only way true social cohesion survives in our city and region, is if our public transportation system remains a vibrant and egalitarian one.

The growing number of mobility options on offer today raises another issue: the increasing VMT (vehicle miles traveled) that the use of vehicular alternatives like Uber and Lyft may be causing.  These are not generally green, sustainable mobility solutions.  If Bridj was carpooling people who might otherwise have been on the T, that wasn’t a green mobility solution.  When Uber and Lyft transport one customer to a destination, that, too, isn’t a sustainable approach to mobility. So if part of our policymaking is – as it ought to be – focused on building a modern and sustainable transportation system, we need to find ways to move people out of vehicles and onto high-occupancy modes.  This requires a level of transit investment and policymaking that we have not been able to embrace yet in the Commonwealth.

I want to return to my earlier observation, that ultimately Bridj offered nothing more than a nice van service that, like all other vehicles, was often stuck in traffic.  This points to what may be the most important innovation and opportunity before us, one that is achievable in the short term and that can change the face of public transportation as we know it – Bus Rapid Transit.  Bus Rapid Transit (BRT) is not new – indeed calling it an innovation may be laughable since BRT has been successfully deployed in cities in South America and Asia for many years.  But we are laggards, and BRT for Boston would be a major innovation, one that would elevate the bus transit experience in a potentially groundbreaking way.  BRT would provide several bus routes with (among other things) enforced dedicated lanes, off-board payment, traffic signal priority, and significantly faster rides for travelers.  It will be a transformative experience and it could have the truly positive effect of encouraging urban modal shift – getting people out of single occupancy vehicles and onto busses that provide a ride unhindered by traffic congestion.

There is a role for shuttle van services like the one offered by Bridj.  We continue to search for an effective and reliable approach to resolving what is called the “first and last mile” dilemma. What this means, in simple terms, is that many people need some sort of service to get them to and from their final MBTA stop (or parking space) and their ultimate destination. Services similar to the one provided by Bridj, or currently provided by Lyft and Uber, could fill that first/last mile void.  Whether that is a role that can be made profitable without some sort of tax credit or other subsidy is, of course, the question that must be answered.

It’s a mistake to read the Bridj story as a failed one-off experiment.  Bridj may be gone, but other innovations are coming soon.  This is a reprieve for the public sector, nothing more.  We all should support the MBTA as it tries to step up its game. The T and MassDOT have hired some very smart and impressive people to manage its embrace of technology and innovation. David Block-Shachter, Rachel Bain, Laurel Paget-Seekins are among a group of young, highly regarded, talented professionals who can help advance innovation and enable the public sector to keep pace with the times, and compete with new approaches to providing mobility.  But no matter how talented they are, they cannot succeed without proper resources.

The Bridj story is a caution to everyone that providing quality mobility services is expensive and hard work.  Whether the public or private sector provides those services, we need to focus on breaking down the barriers to success.  Perhaps what happened to Bridj will underscore the point that the answer to better public transportation cannot always (or often) be found in privatization.  The private sector will face the same poor infrastructure and other embedded barriers to success, and it will not have any reason or incentive to subsidize a service that isn’t making a profit.

What happened to Bridj may have the unintended effect of helping us be more honest about that really needs to happen to improve mobility within the Greater Boston area. As I’ve said many times, the T must multi-task: reduce its state-of-good-repair gap, expand strategically, and adopt innovative and new approaches to service delivery (like BRT).  It has to have more financial resources to do all this, and hire the internal resources it will take to make things happen in a timely manner.  It’s up to each of us to support legislative efforts and advocacy geared toward leveling the funding playing field and providing the MBTA with the net new revenue it needs to become the 21st Century system we all want and need it to be.James Aloisi is a former state secretary of transportation and a principal atTrimount Consulting and the Pemberton Square Group. He serves on the board of TransitMatters. Josh Fairchild, a TransitMatters board member, contributed to this article.

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