Public-private partnerships for public transit

The Hong Kong Mass Transit Railway Corporation is something unheard of in North America – the profitable public transit operator.

In 2012, the MTRC published a tidy two billion US dollar profit.

The Atlantic summed up their model thusly:

In exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fees. In many cases, the MTR owns the entire mall itself. The Hong Kong metro essentially functions as part of a vertically integrated business that, through a “rail plus property” model,  controls both the means of transit and the places passengers visit upon departure.

So the public transit operator is both property tycoon and railway tycoon. Interesting. How can we apply this to North America? Is there a way for property owners to understand the value that public transit provides, and thereby pay for a greater share of transit capital and operations?

An easy argument for existing property owners to make is that they already pay for transit through property taxes. However, as it goes with taxation, everyone pays, but everyone benefits differently, if at all.

How can the TTC demonstrate its value to property owners in Toronto? Look no further than 1087 Queen St West, home of Turnstyle Solutions.

Turnstyle’s ultimate product is foot-traffic data and analytics, but they gather that by sniffing the MAC addresses of smartphones looking for wifi signals. By keeping track of what MAC addresses were sniffed where, the Turnstyle system can generate patterns of individual pedestrian traffic.

If the TTC were to work with Turnstyle to track ridership, they would have a wealth of information on exactly how much traffic the TTC delivers to say, the Eaton Centre, every day. Better yet, if Turnstyle then worked with the Eaton Centre, the TTC could easily separate those riders simply going to Dundas Station from those riders that are taking the TTC to the Eaton Centre to spend money.

Of course, this isn’t the same as statistically-sound ridership census since some riders might not have smartphones, but for making a case for the commercial impact of the TTC, it would be valid.

Being able to say that the system carries x dollars in yearly sales to your property, a property for which you only pay x-y dollars for in taxes – that’s powerful.

Or even without the technology

The Atlantic (again) ran a great story on Mark Aesch’s efforts to build public-private partnerships for transit:

His biggest achievement came through securing partnerships with the community. Once bus service improved, Aesch sent out a sales force to college campuses, shopping centers, apartment complexes, and the like, and asked them to pay for the better service that now carried so many students and customers and residents through their corridors.

The only difference here is that with data, your pitch is much stronger.

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