Our President and CEO was honored to speak at UITP’s 2017 New Year Reception in Brussels. Here are his inspiring remarks in full:

I was recently in San Francisco for a rather unexpected announcement. I stood on a stage outside of City Hall with Mark Fields, the CEO of the Ford Motor Company. The head of an iconic 110-year-old car company — and me, representing bike share — an industry that didn’t even exist a decade ago in North America.  It’s something that would have been unimaginable just a few years ago.

But beyond the setting and the announcement itself, which I will come back to, the other surprising thing was the message that the Ford CEO was delivering. He wasn’t talking about the latest model Mustang or the new features of the newest SUV.  He wasn’t talking about how many cars Ford would sell across the globe.  He didn’t show off the latest concept car. Instead, he shared a very different vision for the future of his company and transportation. He said– explicitly and publicly– that Ford had to evolve beyond just being one of the greatest car companies in the world, to becoming a Mobility company.   

Moreover, he was clear that he did not view mobility as being incremental to his business. In his words, Ford has to recognize what is going on in the world around us, embrace consumers’ desire for connectivity and mobility, and use the data available to us and new enabling technology to better anticipate and foresee their needs.” 

That is what we are hearing coming from a venerable car company– a company that literally brought cars to the masses and has focused solely on selling them for a century. So to hear this message from Ford is very powerful. But it is a story that we are hearing more and more as leading transportation companies recognize and evolve with a new urban reality that I’m going to discuss today. This new urban reality is why I am leading a bike share company now, but it’s also something that will impact every city and transit system represented here today.

Before this move to bike share, most of my career had been spent working at the highest levels for some of the largest transit agencies in the world — in New York, London and Hong Kong.  In those positions, I grappled with the challenges that are familiar to everyone in this room. How do you move millions of people each day safely, cost effectively, and hopefully on-time? How do you contend with aging infrastructure, political pressure to cut budgets, labor pressure to preserve jobs? And it is worth grappling with those challenges, because transport is only growing more and more important in our cities.   

Indeed, these are heady times for our industry. There is a major rail revival around the world, including light rail, metro rail, heavy rail, and high speed rail. Over the past ten years, there were nearly 100,000 KM of new rail lines built across the globe. In Europe, something like 65 cities have built new or expanded light rail systems over the past 25 years, metro systems have expanded in many larger cities and we have seen a rapid increase in high-speed intercity rail lines.

In Asia, the trend is even more obvious. China has built the world’s largest high speed rail network over the past 15 years, and over 80 new metros are planned or under construction. While the scale in China is unprecedented and unparalleled, new rail projects are visible in a host of other  countries ranging from Saudi Arabia to India to Korea to Japan to Malaysia.

Even in the US, previously car-dependent cities are now seeing a rail-based future. Transit ridership in the US has grown 60% over the past 40 years, outpacing the growth of car use by a wide margin. And on a more personal basis, I am happy to say that the end of 2016 also saw the opening of two terrific projects that I have  been associated with. On December 28th, the MTR opened the South Island Line in Hong Kong to rave reviews. A few days later, I was pleased to be at the opening of 2nd Ave subway in New York, the first new subway line to open in New York City in over 50 years. That’s the good news.

All around the globe, there is no question that cities are becoming more and more important in our society. That should be incredible news for transit, because we all know that public transit makes cities possible. But the irony is that transit, or should I say traditional transit, is fundamentally at odds with the new urban reality I mentioned earlier. A hundred years ago, cities grew around the transit infrastructure they built. But as cities develop for the 21st century, they move further and further away from our 20th century ideal of transit led development. Development in many cities is outpacing the rate of transit development, and people are choosing to live and work in communities that were never part of the transit system.

The technology that powers mass transit isn’t nimble or easy to evolve and has a hard time keeping up. Cities are growing larger and larger and they are also becoming increasingly complex and diverse. Moreover, many of our rail transit systems have been laid out with the idea that commuters would come from the edges to the work in the core. But that travel pattern is no longer as dominant today as it once was.

To deal with this, individuals, employers and governments are finding new solutions to the mobility challenge. Solutions that can be implemented today– not twenty or thirty or fifty years from now. That is the new urban reality– growth patterns that transit can’t keep up with, and city dwellers who want flexible, customized, tech-driven mobility. And they want it NOWSo watching this unfold, I took a leap of faith and traded my corner office in Hong Kong for a shared-desk in a scrappy start-up warehouse in Brooklyn to lead Motivate, North America’s largest bike share company. We run bike share in some of the largest, most exciting cities in the U.S. and Canada.

Bike share is part– admittedly a small part– of a new mobility for this new urban reality. If you think about it, trains and buses followed an evolutionary path. Horse drawn coaches became gasoline buses. Steam powered trains became diesel trains and electric trains. Train sheds and depots became grand terminals and stations. But they were all part of the same mold. One of the things that I love about Bike Share is that it breaks that mold. Bike share is not evolutionary. It  is revolutionaryYou decide. Go where you want. Go when you want.

Now don’t get me wrong. I loved working in transit. Transit has obviously been hugely important to our cities and will remain so. And bike share will only ever be a very small piece of a larger puzzle. The point though, is that traditional mass transit is no longer a sufficient answer for today’s cities.

The mobility solutions of today must keep up with the way that we want to live our lives. And that means that the mobility solutions of today are different from the transit solutions that went before us in at least two big ways: First: today’s mobility solutions are personalized. You don’t fit your life to transit. Mobility solutions are designed to fit your life. This is not a small point. For the very first time, we are taking the word “mass” out of transit. Second: today’s mobility solutions are powered by technology. Not by bigger and bigger engines. Technology is at the heart and soul of the operational model and the user experience.

Today’s mobility providers are winning customers by providing high-quality, personalized service powered by increasingly sophisticated yet accessible technology. To talk about Uber or Lyft or Gett is increasingly commonplace– and these are all companies that didn’t even exist a decade ago. They are being followed by new services that are directly aimed at public transit. Chariott and Via are new group ridesharing companies with complex algorithms that are redefining these options. They even qualify for transit tax benefits in the US.

And Uber is also pushing the envelope with pricing. In Seattle, where the bus fare is $2.50, we now see a $1 “UberHOP” fare along fixed routes. And in NY, Uber is also offering a $79 monthly commuting pass in Manhattan’s CBD, with unlimited door to door rides at about  ⅔ the cost of an unlimited ride Metrocard. These are companies with seemingly limitless reserves of venture capital. These are companies that are relentlessly innovating and asking how they can improve customer experience and win new customers. These are companies that are hiring armies of software engineers to develop better algorithms.  

And they are very clear about what their objective is in the end. Simply put, they want to change how the public thinks about moving around cities. They want to fundamentally change what public transit means. And they believe that they can even compete on cost, with prices as affordable as taking a subway, a bus or any other means of transportation. But for all that we have seen so far, this is really just the tip of the iceberg. I believe that we are on the verge of the biggest change in urban transportation since the automobile was created.

Change is probably not the right word. It implies that something is incremental or evolutionary. Instead, I should say that we are on the verge of disruption. And that is a hard idea for most of us to really get our heads around. The term “disruptive innovation” comes to us from Harvard Business School professor Clayton Christensen from his book The Innovator’s Dilemma. In his research Christensen finds that successful companies spend most of their time on sustaining innovations. Like moving to more-efficient articulated trains. Or priority signals for buses and trams. Or being able to purchase your ticket through a mobile app. Or many other things that we have done over the years to improve the efficiency and effectiveness of transit services.  

Incremental innovation is important, of course. We can all describe, for example, how these incremental improvements attract or retain more customers. Or save money.  Or both. And we would be right. But as important as incremental innovation is, it still leaves you vulnerable to “disruptive” innovation. Some of these disruptions are services that come in at the lower end of the market, undercut your price and begin to peel off price-sensitive consumers. They build up momentum and take over from there.  

No surprise here. The examples of disruptive innovation are all around us. Just ask the person who used to own your local video rental store. In the U.S. the smaller video stores were quickly displaced by a chain called “Blockbuster.” At its peak in 2004, Blockbuster was a $5 billion company with 8,000 stores and 60,000 employees. Just a few years later, it was filing for bankruptcy protection.

As an aside, the more interesting part is that the initial disruptor– Netflix renting DVDs by Post– then disrupted themselves before someone else did. They saw the change that was coming from video streaming and they re-invented themselves before they would suffer the same fate as the video store. Today, it is almost as hard to remember  renting DVDs from Netflix as it is to remember the local video store. But for all the power of this example, we need to look past this type of “cheaper and simpler” product disruption to really understand what is going to happen with urban mobility.

It was just 10 years ago– nearly to the week– that the iPhone launched. Remember when you first started using an iPhone. It didn’t have a keyboard like Blackberry did. It felt funny to type on a flat screen. It took 4 clicks to make a call instead of one. It was much more expensive than other mobile phones at the time. You don’t need me to tell you the rest of the story.

There are many benefits to the iPhone, but the impact has been greatest when it opens up a whole new category of business and a whole new population of people to make money. Uber, of course, is a great example. It is not just that you can get a car with the click of a button. It’s that you can use the same app in 81 countries and 563 cities. It has disrupted the taxi industry to be sure, but more than that, it’s disrupting the entire platform of urban mobility. When Uber becomes as cheap as a bus but easier to summon, it shifts the way citizens shape their mental map of their cities. And there cannot be any question that this type of platform disruption is incredibly powerful and incredibly valuable.

Which brings me to the disruption that I believe will up-end urban mobility in cities all across the globe: autonomous vehicles. The idea of self-driving cars would have been considered science fiction not that long ago. But the technology is advancing so rapidly that its mass adoption now seems inevitable. We have never before seen anything that will be launched with the scale and speed of autonomous vehicles. The first petrol powered automobile was produced in the late 1880s, but automobiles remained a transportation toy for the rich well into the 20th century. The change to self-driving cars will come much, much faster.

Yes, there are still lots of questions about autonomous vehicle technology, but there is little doubt that they will be solved. The largest technology companies– Google and Apple– have gained a lot of attention with their efforts to produce driverless cars. And they are not alone. Every major auto manufacturer and numerous startups are demonstrating vehicles that can drive themselves. And picking up on the value of Uber and other similar companies, there is also a clear business case for these companies to make large-scale investment to develop and perfect the technology. The reality is that sometime very soon, riding in a car will become dramatically more convenient, affordable, and safer.

One of the first impacts will be that the model of automobile ownership is likely to change. Simply put, people may not feel the need to buy a car. This is particularly true in urban areas where the fixed cost of car ownership– parking, insurance, taxes, etc. are so high on a per-mile basis. Access to cars will improve. AVs offer the potential that a convenient door-to-door ride sits at your fingertips and the cost of those rides may be significantly less than the cost of owning and operating your own vehicle.  

More to the point for us, the cost of a ride may be less than the cost of a public transit trip. There is every indication that AVs may reduce the cost of a taxi trip by as much as 50-75%. For short trips, that will already put them within striking distance of public transit fares. Even for longer-distance trips, having just 2 or 3 people in a vehicle may be cheaper than the comparable public transit fares for the same group. This will pose existential challenges to our industry.

In peak times and in city centers, autonomous vehicles will succeed or fail on our ability to address congestion. If we are able to efficiently share these vehicles, and technology allows them to run safely and quickly in close proximity, we can dramatically increase the capacity of our roads. Transit systems will lose ridership. Still, even with the significant efficiency gains, the roadway networks cannot possibly absorb a large-scale shift from public transport and some form of roadway pricing will be needed to allocate the scarce space. Transit systems will still have a critically important role, of course, but they are in danger of losing ridership.

But in off-peak periods, or really anytime or place when there is no congestion, the convenience of a door-to-door autonomous vehicle will be extremely difficult to match, and may make off-peak public transit obsolete. Given the choice at similar price and speed, most people will opt for the convenience of door-to-door travel over the comparable public transit trip.

One other result of AVs will be a much higher bar to justify and gain public support and funding for new urban transit projects. That does not mean that all new urban transit projects will stop. Nor should they. Cities are seeing extraordinary growth and in many cases struggling to accommodate the demands for new housing and commercial development. But I do believe that the underlying arguments will need to evolve and that it will be increasingly necessary to demonstrate a direct correlation between development and new transit construction. As an aside, there is a lot that we can all learn from MTR in this area. They have done a terrific job connecting transit and development. From day 1 in the planning process.

As a specific example of the higher bar, consider the cost/benefit analysis of the Second Avenue Subway in New York City when autonomous vehicles are a realistic option. The next phase of this line is projected to cost $2.2 billion per km — a total of $6 billion for less than 3 km of new track.  The vision of building the Second Ave Subway goes back nearly 100 years.  But will there be support for this level of investment in a world where AVs are demonstrating an alternative way to meet mobility needs?  Put another way, the debt service on that $6 billion will be $400 million a year for 30 years. That can buy a lot of trips in autonomous vehicles, and those may just be rides that the public would prefer to take– flexible, customized, on demand.

By the way, just in case this isn’t already enough to make your head hurt, these companies aren’t just thinking about better algorithms or new operational models or more clever pricing. They’ve actually started to question the basic premise that transportation happens in 2-dimensions.

From Amazon’s experiments with drone-based logistics and delivery to Uber’s vision of affordable urban passenger air-travel, these companies see the third dimension as an underutilized asset that previously was only available to the wealthy in over-congested cities from Sao Paolo to New York. And they’re making a bet that they can tap into the third-dimension because as our cities grow and get more congested, it’s something more urban consumers will want, and that their companies can do it at a price that more urban consumers will pay. This does feel more in the realm of science fiction and it certainly is nowhere as far along as AVs. The challenges of developing commercially acceptable urban air vehicle technology are formidable and the challenges on the ground may be as great.  But I, for one, wouldn’t bet against it.   

So where does all of this leave traditional transit? As much as I believe autonomous vehicles are on their way, I also believe that the future is bright for transit. But that will only be the case if we recognize this new urban reality and adapt. Let me offer five thoughts:

1. We don’t just need to stay alert to new trends and new technologies. We need to welcome them in. Certainly, we need to be scanning for new ideas not just inside our organizations but assessing the landscape outside as well. But more than that, we need to create ways for new ideas to filter into our organizations.

Here is an example.  L.A. Metro’s “office of extraordinary innovation” [Great Name] has a policy now of accepting and reviewing any and all unsolicited proposals. This is a huge change from the procurement barriers that are often erected in public agencies. It  allows private-sector companies working on transportation innovations to present new ideas directly to Metro for review and evaluation, reducing red-tape and ensuring there is a direct pathway for new ideas to enter this large transit agency.

2. We can look for ways to collaborate with and help inform what these private companies are doing. Some smaller cities have started to establish “pilot” programs with companies like Lyft to explore ways that e-hail could complement and extend public transit, potentially reducing costs to serve more people or provide more reliable service. Other cities are beginning to experiment with allowing AVs on the roads, albeit today mostly with a human driver back-up. It’s important for us to demand transparency about how the programs function in terms of costs, safety, reliability and equity. We need to learn from these small pilots to be able to shape good public policy and better partnerships as these programs and technologies come into the mainstream.

3. We need to ensure that these new services align with or at least do not undermine the “public” in public transit. A quick scan of the mission statements of public transit agencies turns up words like quality, connecting, dependable, accessible and affordable. Public transit agencies have a big mission — to serve the public, not just the choice rider. Part of the fear of these new technologies is that technology has a history of leaving those less fortunate behind. We need to prepare and embrace these new technologies, and take steps to ensure that they complement and extend this vision and help us continue to make cities great places to live.     

4. The organization of our public institutions will need to change to better allow us to adapt to the changing landscape. In most large cities, the public transit function is distinctly separate from the responsibility for the urban road network. The questions being posed by autonomous vehicles and the policy actions that are necessary will require us to rethink the institutional structure. Two cities are often mentioned when you think about integrated transport authorities with broad responsibility for all modes of transport and the roadway network– Singapore and London. And it is probably not a coincidence that those are two of only a handful of cities that have implemented urban road pricing schemes.

Ultimately, it is difficult for me to imagine a world with large-scale implementation of autonomous vehicles that does not involve sophisticated congestion pricing models to help allocate scarce urban road space. But the policy questions go way beyond congestion pricing. AVs will offer the opportunity to reshape the physical landscape of cities. For example, the opportunity to reallocate space if on-street parking is no longer a requirement. Will we have wider sidewalks, more protected bike lanes or more green space? Or will we turn the space into electric vehicle charging stations and organized pick-up/drop-off points? I don’t know the answer, but it is a safe bet that the competition for this curb space will be robust and will impact cities for decades to come.   

5. Finally, Transit agencies are well placed for the new frontier of “mobility as a service.” Auto companies will be in uncharted territory as they seek to move from traditional ownership models to shared use services. Transit agencies, on the other hand, have established relationships with customers and may be best placed to bring together a multi-modal view, particularly if the institutional structures have adjusted as I mentioned a moment ago. Thinking about the three transport agencies where I have worked, Transport for London’s integrated view puts it in a much better place to lead on mobility as a service than the MTR in Hong Kong or the MTA in NY.   

Ten years ago, none of us would have have been able to Tweet this speech on our  iPhones. A lot has happened in a very short time. It may take a little more than ten years, but disruption is coming to our urban mobility systems. At the beginning of my remarks, I mentioned the press event with the Ford CEO, but I didn’t tell you why we were there.

The event was to announce that Ford would be partnering with Motivate and sponsoring the new bike share program in the San Francisco Bay Area. The program will begin with 7,000 bikes, making it the second largest bike share program in the U.S. San Francisco will rank in the top five in the world for number of bike share bikes per resident. Just another sign of a new mobility option coming into its own, out of the fringes and into the mainstream. And you can be sure that we are not resting on our laurels. We know that bike share, just like other forms of transit, is vulnerable to disruption too.  

Let me close with a little story. When I was a kid, I used to watch a television cartoon called the Jetsons. The Jetsons were a family who lived in a futuristic world with lots of robots and whimsical inventions. One of the things that I remember about it was the vision of urban transportation of the future. We would all be flying around in our own single occupancy aerocars that would land seamlessly and that we could fold up into our briefcase at the end of our trip. Pretty compelling to an 8-year old.  

Little did I know that the real vision of the future of urban transportation would be vehicles that drive themselves and that we share with millions of other people. And some of those vehicles may even be bicycles. Change continues to come at us, faster than ever before. It’s our opportunity as leaders to embrace it, to shape it and to use the changes to continue to make our cities better than ever.


*Thank you @uitpsummit for the photo.

Remarks — Motivate

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