What changed in 2022 and what will 2023 bring?

Last year was one of transition for the transit industry. We started to adjust to the post-Covid landscape, applied for new and revitalized infrastructure grants, addressed safety and security issues, and invited riders back.

Now that we are settled into the new year, the Genfare revenue team is taking a look back at 2022 and sharing our predictions for 2023. We answered a variety of questions about the state of the industry. Read on for the expert opinions of:

2022 takeaways for the transit industry

What are the biggest challenges you noticed in the transit industry during 2022?

  • Mark: Covid and the waning of ridership. While Covid had a lasting impression on all aspects of our lives, the ridership hit that was seen by transit has been unprecedented and is still lingering.
  • Jennille: Technology is starting to catch up to the needs of the riders. Agencies are tasked with fewer resources to evaluate what is truly needed. 2022 was a big year for evaluating what is currently available, assessing what is needed, and moving forward.
  • Kyle: Is Covid over? Are people going to ride to work again? It was almost a lost year again because no one was sure of what to do and how to act. It seemed to clear up in the summer, but we are still seeing occasional spikes in Covid, and I think transit is unsure of how to handle it.
  • Daria: Besides the obvious challenges of waning ridership and inconsistent return to work policies nationwide, transit is at a crossroads. Riders have different needs and transit agencies need to learn how to address these needs nimbly and quickly to retain loyalty and remain a relevant service. There are many options today – some new and others traditional; where does the modern day transit agency fit in anymore?

What are the best things that happened in the transit industry during 2022?

  • Larry: The infrastructure act, along with CARES and other Covid measures, have bridged transit funding needs, and have allowed transit to plan for its new mission, as opposed to having to scramble to make up for financial losses related to the ridership declines. Therefore, transit has started to innovate to meet the new dynamics and ridership has begun to return.
  • Daria: One of the best things that happened this year in transit is the evident proof of who they serve – workers from the grocery store to hospital care units. This truth should recenter our transit agencies to think about how we serve our public needs and attract others to return. The slow pace of the pandemic recovery presented the opportunity for us to really see how different choice and need riders are, which can help us tailor our approach to serving each group in a way that makes them want to ride transit.

What are the biggest changes you noticed in the transit industry during 2022?

  • Mark: Open payment is emerging as the next trend in transit. I believe that transit is at a rebirth stage in its evolution. Technology that is used in many other aspects of our lives is finally emerging in the transit markets and readily accepted by the ridership. For the first time in the history of transit, the riders are more at ease utilizing everyday technology that is now being introduced in transit because the riders have been connected their entire lives.
  • Jennille: There are still many agencies that have remained fare free. Agencies are now trying to determine how long-term this can be supported and/or how to return to collecting fares, along with what is necessary to do so.
  • Ed: More clients are looking to replace their diesel and natural gas fleets with hydrogen and electric powered vehicles, and fortunately, there’s a lot of grant money available to help.
  • Daria: The bipartisan spending bill is beginning to have an influence on diversifying how transit oversight is structured. In addition to transit agencies as we know them today, we are starting to see cities, counties, and regions, MPOs, and other authorities becoming involved in transit. This foreshadows how moving around goods and people has changed and the need for updated policies to support these changes. The implications could be extensive in the next decade and reshape who manages transit.

What lingering effects did the pandemic have on transit in 2022?

  • Jennille: With so many people working from home, ridership recovery has been difficult.
  • Ed: Many employers are allowing employees to work from home. Colleges are allowing students to learn remotely. This contributes to lower transit usage.
  • Larry: Bus ridership is 60-70 percent of 2019 levels (rail is about 50 percent), and commutes are a smaller portion of the trips taken. People now have work from home or have flex schedules, and transit is seeing changes in ridership patterns. Rush hours are still heaviest, but the old plans for transit are not relevant anymore.

2023 predictions for the transit industry

What opportunities do you see that transit agencies should pursue in 2023?

  • Mark: Equitability in transit is top of mind for all transit providers at this time. I believe that fare capping and open payment will be the showcase in the coming year, allowing transit boards to speak to the equality that they are providing for all transit riders to their constituents.
  • Jennille: Transit has a chance for the first time to truly listen to the needs of their riders. Consistent, convenient, and responsive service that is easy to use will be what each rider will want. How to get there will be different for each agency. Listening and monitoring will be key as transit agencies transition back to full service, collecting fares and supporting growth.
  • Ed: I believe we will see continued adoption of account-based and/or open payment fare payment solutions that automatically determine the best fare for the rider.
  • Kyle: There is a ton of money available for new projects. Forward-thinking agencies will explore grants to modernize and streamline their operations.
  • Daria: We need to deeply contemplate how a post-pandemic life looks for many of us. For example, this could mean more hybrid transit schedules since there is virtually no regular commute anymore, cleaner buses and trains to create a more attractive ambience for choice riders, and/or workforce hiring and training that is nimble and effective. This is a new world and we need to find a new place in our riders’ lives.

What challenges do you predict for the transit industry in 2023?

  • Larry: Agencies need to understand their specific community’s new priorities in their need for transportation. Certain basics are always present (medical rides, traditional commuters), but in order to bring ridership closer to 2019 levels, new modes of service may be necessary. Some agencies are meeting this need with expanded hours, and others are increasing service frequency. Agencies have implemented microtransit and TNC partnerships in their efforts to serve their ridership. One of the big challenges for agencies this year will be adapting to become more nimble and become “customized” to their communities.
  • Kyle: Agencies that had a large portion of their pre-Covid ridership comprised of employees commuting to an office will still not see that ridership come back. And then there’s the sustainability issue: How does the electrification push affect the agencies, especially those with limited funds or in environments that are not best suited for electric?
  • Daria: The infrastructure bill is still capital focused and not operations focused, so agencies will continue to be challenged with ongoing costs leading to traditional ways to contract and procure. Being able to provide new and innovative services means flexible financing is required. I hope that transit agencies will reach out to their vendor partners for help making the best use of grants and other funding opportunities.

How can transit agencies best address equitable mobility in 2023?

  • Mark: Fare capping and open payment technology is available, and agencies that upgrade their fare collections systems to adopt it will best address this need. Even if there are still years of life on the agency’s current fare collection system, there are cost-effective ways to integrate smart fare media without replacing the whole system.
  • Jennille: Equitable mobility is for everyone, not just for riders. Focusing on simplifying operations, eliminating the noise, and providing useful service benefits us all.
  • Ed: Adopting account-based and/or open payment solutions facilitates automatically determining the best fare for the rider and leveraging retail networks as an option for riders to reload accounts with cash.
  • Kyle: Agencies can expand the use of solutions that digitize cash without stranding money. This ensures that cash users have a path to getting the same benefits that come from electronic payment without forcing them to use a smartcard/smartphone/credit card.

What impact do you think inflation or other economic indicators will have upon transit operations and/or ridership in 2023?

  • Mark: Generally, as inflation rises, transit enjoys an increase in ridership and revenue. I believe that transit operators will see their revenue and ridership rebound over the next two years, back to pre-pandemic levels or higher. Inflation is also impacting the younger generations, many of whom are living at home longer, which will help with technology adoption and increased ridership.
  • Larry: Inflation, and specifically high gas prices, has traditionally moved more people into a transit commute. Rideshare companies are not as cheap as when the services started, which will push some riders back to transit. These effects likely won’t be a pronounced as in previous years due to work from home and rider safety concerns currently hindering gains.

We’re on this journey together

No matter what 2023 brings, Genfare is along for the journey with our transit agency partners. As a partner to 400+ transit agencies of all sizes across the U.S. and Canada for over 40 years, we are uniquely positioned to help you embrace the opportunities, weather the challenges, and drive the evolution of public transit.

Fare collection does not exist in a vacuum, but rather is part of a larger strategy to improve the transit experience. Let us help you increase ridership and raise agency revenue with a simplified, equitable, and connected transit experience. We can help you achieve your 2023 goals, whether it’s through our solutions, our advocacy and thought leadership, or even help applying for grants. Contact your region’s business development director at the email links at the top of this article to learn more.