Anyone working in public transit agencies will wince at the mention of the fiscal cliff, the looming operating budget shortfall for transit agencies.

COVID relief funding of $70 billion for public transit is ending. Currently, ridership is at about 70% of pre-pandemic levels, with lower fare revenue exacerbating the funding gaps for these agencies. Additionally, they are contending with a rise in fare evasion and a substantial increase in operational costs.

APTA Survey insights

A survey conducted by APTA among transit agencies in the U.S. revealed that 51% of respondents anticipate facing a fiscal cliff within the next five years. This issue is even more pronounced for larger transit agencies, with 71% indicating they will encounter a fiscal cliff.

The potential impact of the Trump presidency

The forthcoming Trump presidency introduces uncertainty for public transit agencies and their funding.

The president-elect has nominated former congressman and Fox Business host Sean Duffy to lead the Department of Transportation. If confirmed, he will oversee the department’s aviation, automotive, rail, transit, and other transportation policies, with an estimated annual budget of $110 bn (£86bn).

While we have yet to understand how this cash will be used, based on Trump’s previous term as president and comments made during the election campaign, experts like Yonah Freemark, Research Director for the Land Use Lab at the Urban Institute, predict concerning outcomes.

Freemark anticipates that Trump will advocate for significant cuts to public transit funding, with grants likely directed toward roads and rural areas.

This represents a shift from Biden’s focus on public transit—he’s often called Amtrak Joe for a reason—and potentially a rollback of his commitment to green policies, including electric vehicles (EVs) and efforts to reduce pollution.

Strategies for transit agencies

Against this unsettling backdrop, transit agencies are looking for innovative ways to secure additional federal, state, or local funding while introducing cost efficiencies. They are also proactively considering strategies to retain and grow ridership. Currently, agencies agree that raising fares or cutting services is not the solution.

Increasing ridership: How can Kuba help?

There are many ways to enhance the rider experience, which in turn motivates increased ridership. In addition, phasing out cash payments and legacy infrastructure for paper and smart card ticketing can help operators cut costs.

More reliable and convenient services

With precise journey planning, including ticket prices, Kuba’s mobile app enables riders to understand their journey completely, both in terms of practicalities and cost, before they even start their ride. Mobile notifications also help to support the passenger experience, giving them real-time information and travel updates. 

Focus on low-income riders.

With open-loop and mobile ticketing, fare caps can be configured to deliver automatic savings for riders on the go. When travellers reach the fare cap within a specific timeframe—whether it’s a day, week, or month—any additional travel during that period is free. This approach is similar to purchasing a period pass but eliminates the need to plan or budget for a large upfront payment.

Digital ticketing

Agencies can reduce costs by utilizing digital ticketing technology. Research from various transit agencies, including our partners at Dallas Area Rapid Transit (DART), indicates that implementing contactless and mobile ticketing systems can significantly lower expenses.

To start with, having riders use their bank card or smartphone as their travel token means less investment in issuing paper tickets or plastic smart cards. Moreover, there is decreased demand for machines and kiosks to purchase tickets or top up balances.

After the initial setup costs, contactless and mobile fare collection incurs fewer ongoing costs. The total expense for the agency may be half compared to traditional cash collections. These savings could increase further if they successfully transition groups of riders, such as students or corporate employees, to multi-month digital pass options.

Mobility as a Service to enable end-to-end journeys

Our mobile app solution combines various modes of transportation into a single digital on-demand mobility platform. Users can easily plan, book, and pay for their journeys, regardless of the mode of transport they choose.

Interest in public transit significantly increases when users find it convenient to plan and pay for their travels using a mobile app.

Additionally, our platform offers supplementary services for the first and last mile, including ridesharing, on-demand transportation services, and microtransit options like bike sharing and e-scooters—all accessible through one, single sign-on app.

Real-time data and fleet management services

At Kuba, we promote data-rich mobility systems. Our Account Based Ticketing (ABT) platform provides multiple layers of integration and a secure environment for collecting and sharing payment and mobility-related data within mobility ecosystems. This valuable data can be used to identify ways to optimize routes and design rider-focused services that attract more use.

Reduction in fare evasion and fraud

ABT systems can help reduce fraud. With traditional paper tickets, there is always a risk of counterfeiting or reuse. However, with account-based ticketing, each transaction is recorded and linked to a specific account, making it more difficult for fraudulent activity to occur.

As a second line of defense against fare evasion, our inspection devices make it easy for revenue inspection staff to check that riders are carrying a valid travel token.

Contact us today to find out more about how Kuba can help transit agencies boost fare revenue and ridership and generate funds for reinvestment in their services.