Contractors Helping Operators Manage Tighter Budgets

As more public transportation agencies reach out to transit contractors for more cost-effective and efficient service, contractors are reporting the need to get creative when dealing with tighter budgets and increased rider demand.

We spoke to a handful of private contractor companies to get the latest on their projects, technological innovations and where they see the industry heading.

FIRST TRANSIT
First Transit Inc., part of FirstGroup America, is a provider of passenger transportation contract and management services in the U.S. With more than 51 years of experience, the contractor provides operation, management and consulting for 235 locations in 41 states and Puerto Rico for transit authorities, state departments of transportation, federal agencies, municipal organizations and private companies.

Contracts. Serving 24 universities, including Rutgers and the University of Alabama, has been a substantial source of business over the past year for the contractor, Timothy Stokes, media director, First Transit, says.
Additionally, First Transit was recently awarded a paratransit contract for the Transit Authority of River City in Louisville, Ky. The contractor will oversee the operation of the paratransit service beginning Oct. 1, 2012. The contract includes the management of 180 employees and the operation of 91 vehicles.

Industry trends. Many transit authorities are looking to outsource service as a way of saving money, Stokes says. A good example of that is Oceanside, Calif.-based North County Transit District, another transit system that has a contract with First Transit, he adds. The contractor was able to save NCTD $4.9 million on costs for its BREEZE fixed-route bus service.

Technology. The contractor recently implemented DriveCam3 on key segments of its fleet in many of its locations. The latest iteration provides an advanced fuel management solution, which helps with sustainability as well as efficiency. First Transit committed to a five-year full-fleet deployment of DriveCam’s Managed Services Program.

KEOLIS TRANSIT AMERICA
Formerly Tectrans and now Keolis Transit America, the company was purchased in whole by Keolis America and its Paris-based parent company, Keolis S.A. last year, Dwight Brashear, executive VP, business development, Keolis Transit America, says. Its work in Europe has given the contractor a different perspective on the U.S. public transportation industry.

Contracts. Keolis is a full-service transit management company with contracts across the U.S., primarily in California, Florida and Virginia. The company began work on May 1 for Access Services – Antelope Valley Region Specialized Transportation Service, based in El Monte, Calif., and, as part of the service, has partnered with Stratagen for a pilot project for scheduling and tracking. Keolis has 39 employees operating this service, including 25 drivers. It utilizes 23 vehicles to operate a seven-day-a-week service. The team transported more than 5,500 passengers in the first month of service. The contractor will be responsible for coordinating, dispatching and providing all the ADA paratransit trips for five years.

Industry trends. Since the recession started, transit agencies are asking contractors to provide a very high level of service, and sometimes, the funding isn’t there as it was in the past, Brashear says. Contractors are stepping up to the plate and doing what is required, he adds, mostly by being more creative in finding ways to keep the service on the street and the quality of the service as high as possible.

“A lot of agencies are starting to slowly recover…but I think there is still an apprehension to increase service,” Brashear says.

Technology. Because of tighter budgets, Brashear says he is not seeing many transit systems in a position to upgrade or adopt new technologies. “[It’s a] chicken-and-the-egg situation,” he says. “We all realize there are certain technologies out there that can probably improve or add to efficiencies, but there’s that initial outlay of capital that comes along with it.”

He adds that technology in Europe generally has been ahead of the U.S., but that gap is starting to close. “Transportation in the U.S. is different from Europe,” Brashear says. “We’re a little more spread out, especially on the West Coast. The models being used in Europe won’t work [there]. We have to come up with a model for the way people live here. We’re getting there, but it’s a struggle. Technology will lead the way eventually.”

Sustainability. Keolis runs one of the largest taxi companies in Orange County, Calif., and compressed natural gas (CNG) vehicles have become popular with the contractors that lease its vehicles. “If we run out of CNG vehicles, they’re not happy,” Brashear says. “Part of it is that the cost of CNG is less than gas or diesel. The move is going to be toward more sustainable, clean fuels. Keolis, like all our competitors, is looking at those options and embracing them.”[PAGEBREAK]

MCDONALD TRANSIT ASSOCIATES
Fort Worth, Texas’ McDonald Transit Associates Inc. offers management, planning and operation services for bus, rail and paratransit systems. Additionally, the contractor is part of Regional Authority for Transport Paris, Development (RatpDev). Acting through RatpDev USA, McDonald Transit is now part of the worldwide RatpDev Group. RatpDev has entered into partnerships to expand coverage and improve service in some of the world’s largest transit markets.

Since 2002, RatpDev has grown to operate and maintain buses, metros, tramways and rail systems worldwide including in Algeria, Brazil, China, France, the West Indies, and now, the U.S., having recently landed a contract in Texas.

Contracts. McDonald Transit Associates was recently awarded a contract by Austin, Texas’ Capital Metro to operate about 50% of the municipal bus service, with almost 300 buses and nearly 800 employees. The service begins August 19, John Bartosiewicz, executive vice president, McDonald Transit Associates, says.

Industry trends. Bartosiewicz says there’s a lot more belt-tightening because of the down economy. Transit agencies are looking for ways to improve efficiency and maintain service as their funding for public transportation tightens at both the state and local level.

More systems are looking at green issues, for both sustainability of their operations and alternative fueling for their vehicles, he adds. “We have several systems that are pursuing CNG as an alternative fuel,” Bartosiewicz says.

Technology. McDonald offers real-time bus information so operators can track buses in the field; adjust schedules based on detours;  and provide information on bus issues to customers to enhance the quality of their experience of using the service, with next bus information available at bus stops, throughout the bus service area.

MV TRANSPORTATION
Dallas-based MV Transportation Inc. is a private provider of paratransit services, employing more than 16,000 dedicated transit professionals and operating more than 200 paratransit, fixed-route, shuttle, school bus and Medicaid contracts in 29 states, the District of Columbia, Canada and Saudi Arabia, where it began work on its first overseas contract earlier this year.

Contracts. W.C. Pihl, sr. VP, business development, MV Transportation (MV), says the company completed a large acquisition in the student transportation market in 2011 and now owns and operates one of the nation’s largest school bus fleets. More recently, the company was awarded the paratransit operations for Capital Metro and the company purchased the Los Angeles Department of Transportation Northern Region Commuter Express and DASH services contract following the bankruptcy filing of Coach America.

In the last year, MV has expanded internationally. In February 2012, the company was awarded its first overseas contract by Earadat Transportation under which MV will provide management services for the operation of Earadat’s transit system in Saudi Arabia’s eastern province. Additionally, MV was selected to manage fixed-route services in the San Juan, Puerto Rico area.

Technology. MV Transportation Technology’s TimePoint system provides real-time information to kiosks and arrival boards and offers riders the use of texting functionality using programmed parameters and location-driven data. Passengers can set up an online profile, which designates the method of the alert — text, Web, email or voice — for their specific routes and on the days and times they choose. In addition, the system now integrates with video displays in real-time.

Growth. MV Transportation has continued a strong record of growth over the past year. The company reported record annual revenue in 2011 of $829 million, up 14% from prior year revenue, and has seen year-over-year revenue growth for the twelfth consecutive year, Pihl says. In the first quarter of 2012, MV has sustained growth of more than 30%.

NATIONAL EXPRESS TRANSIT CORP.
This is National Express Transit Corp.’s first year in the U.S. public transportation market, Brian Sullivan, chief marketing officer, National Express Transit Corp., says. National Express is a long-term provider of fixed-route, paratransit, student transit, rail, coach services trams in the U.K., Spain and Morocco. In the U.S. and Canada, the contractor primarily provides student transportation.

National Express, as an entire entity, has given close to one billion trips annually. A lot of those are on rail in the U.K. and in Spain. The company is the second-largest provider of student transportation in North America, Sullivan says, with about 20,000 vehicles, the vast majority of which are school buses.

Contracts. The contractor will take on paratransit operations for the Massachusetts Bay Transportation Authority (MBTA) for about 2,000 paratransit trips a day, and landed a contract with the Pa.-based Port Authority of Allegheny County and runs a number of paratransit contracts in the Midwest.

Industry trends. There is a growing issue with the high cost of mandatory ADA paratransit services, Sullivan says, and the industry is looking for creative solutions. “In my experience those solutions have to be tailored to the local need,” he adds. “What works in San Francisco isn’t going to work in Oakland, which isn’t going to work in Denver. I have not seen a one-size-fits-all approach to help reduce those costs.”

For example, Sullivan says, while global ideas taxi services may work well in urban areas, there aren’t a large volume of taxicabs in rural or more suburban areas. “It’s all about thinking outside the box to find a solution that helps reduce those costs,” he says.

And the need for more innovative thinking, as Sullivan sees it, is one of the biggest challenges facing the industry.

“I think the industry is very hungry for alternatives in contracting,” he says. “There is not enough competition to breed innovation and creativity.”

Technology. National Express upgraded MBTA’s dispatch system, developing the Ticker, a predictive plug-in software program that flags track problems that would affect the service locally, pull down on-time performance before they actually occur and make adjustments on the fly.

Sustainability. The contractor embraces a paperless workplace mentality, optimizing electronic filing and reducing the use of hard copy printing wherever feasible. National Express also promotes the benefits of transit through industry associations it belongs to and encourages its employees nationwide who work for a school bus operation to “dump the pump,” according to Sullivan. [PAGEBREAK]

VEOLIA TRANSPORTATION
Operating 200 contracts with 18,000 employees, Veolia Transportation manages many modes of public transportation including bus, rail, paratransit, taxi and shuttle services, and continues to grow.

Contracts. In Nassau County, N.Y., Veolia took over the remaining bus service from the New York Metropolitan Transportation Authority as of Jan. 1, 2012. The $110 million contract is the largest privately operated bus contract in the U.S., says Dick Alexander, sr. VP of business development, Veolia Transportation. The contract is a public-private partnership. Veolia performs the operation and maintenance and all the staff functions, including marketing, plans and financial reporting.

Industry trends. Alexander points to a growing trend of contracts going from public to private operations. The last three years, he says, Veolia has obtained contracts for public transit operations in New Orleans; Savannah, Ga.; Reno, Nev.; Phoenix; and Austin, Texas.

“You didn’t see that in this industry for a long time,” he adds. “[Because of] the economic times, agencies need to change the model.”

Next year, Alexander predicts, there will be even more changes in how paratransit is delivered, mainly because of cost, but also because of the increase in the senior population, two factors that have caused many social agencies to get out of the transportation business. That has put pressure on transportation authorities who are obligated by law to provide the service.

“Sometimes stress breeds creativity,” Alexander says. “A lot of systems are saying ‘We need to see if there’s a better way.’ It’s interesting times. I think the industry has gotten a lot more creative lately.”

Technology. Veolia created a hybrid operating model called Teleride, which mixes dedicated traditional paratransit with non-dedicated cabs or independent operators. The model utilizes tablets with GPS in vehicles for drivers to let them communicate about trips with the dispatcher. In turn, the dispatcher can track whether or not the driver took the trip or is on time.

Sustainability. The contractor developed a partnership with IBM and its Smarter Cities program to provide smarter mobility solutions, coordinating among several different mobility sources to create more sustainable cities by measuring where traffic is occurring and enabling customers to use smart phone technology to find bus routes, bikeshare programs, parking and arrange for a cab.

Growth. In 2011, Veolia grew on the transit side of the business about 15%, Alexander explains.
“A lot of that has come from conversions of public operations to private.” he says.