Mobility Expert: Reliable Government Funding Holds Key To Sustainable Transportation

Fixing transportation cannot happen with the flip of a policy switch.

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If you asked the average person about transportation services, they would likely say that transportation — particularly on the private side (think cars) — is a high-margin, profitable business that provides money-making opportunities through innovation. Or, in the case of public transportation, it appears to make money as it takes in fares that never seem to be put back into improving transportation infrastructure.

The Ugly Truth

The ugly truth clouding our ability to solve global transportation challenges, including ride-sharing, e-modalities and car share, is that it's not a high-margin industry. From the low margins of auto-manufacturing to the limited markets providing strong margins for rideshare opportunities, it has become clear that transportation is a tough market for meeting people's needs at a price point they can afford.

Furthermore, good business models and sound regulatory frameworks — while a large part of the equation — are not enough to address society's mobility needs. While they can work profitably on occasion, they fall short when it comes to sustainability or inclusivity. This is because they are designed for the individual as opposed to society at large, making sure that a single-vehicle line or a single-service market is profitable.

The takeaway: We all — public and private businesses, and citizens — need to understand that fixing transportation cannot happen with the flip of a policy switch. It will take public and private partnership, compromise and creativity. But, most importantly, it will take reliable funding.

The Road to Today's Transportation Challenges

If you trace transportation's roots, it started out as a profitable endeavor as it evolved from individuals walking to services provided by others. Transportation was seen as a way to get from A to B, which quickly became an economic development tool. From farmers bringing goods to market to taxi drivers moving people throughout a city, transportation helped build metropolises.

In tandem with private and commercial transportation momentum, governments became involved given transportation's connections to real estate and infrastructure, often areas of purview for local governments. As cities became expensive, people moved to the suburbs; but in many cases, these suburbs were developed assuming people would meet their own transportation needs via a privately owned vehicle rather than shared public or private transportation. As people continued to spread out, dependency on transportation grew, and so did transportation's obligation to connect people, goods and services.

Enter public service — and the beginning of what became a tension between public and private, between policy and structure, that still plagues the industry today. Public entities pick up the responsibility of mass transportation while being forced to keep costs low, and private companies continue to provide a better experience to those who can afford it while clogging roads in the process. As this tension has reached boiling point, it's clear transportation models are largely unsustainable at the rate cities and suburbs are growing, and the transportation industry is also contributing heavily to our spiraling carbon footprint and accelerated climate change.

Now, under increased pressure, the global transportation sector is playing "catch up" and failing to meet sustainability, inclusivity and equity goals fast enough. All this is to say: We haven't yet cracked the code on the right modalities for the right use cases in a way that meets the plethora of expectations that we demand from the transportation industry, including fiscal, operating, equity and environmental goals.

Checking the Rearview Mirror

There are copious examples of attempts to meet these goals for the transportation industry, but for various reasons, almost all have tried and failed or found longevity hard to come by, including:

Public transportation is supposed to be built on fixed fares. Pricing public transit as a fundamental need resulted in low prices and slim margins. Raising prices risks outpricing those that need public transportation the most. Nevertheless, as the cost of fuel rises, so do public transportation costs, although it is possible for rising fuel to also contribute to higher ridership.

A rise in driving increased emissions, congestion and strained infrastructure. As public transportation failed to meet needs and vehicle prices came down, people purchased their own cars. The development of online retail required ever more delivery vehicles. All this created more emissions, more congestion and more strain on our roads.

Electrification is expensive. The movement to electric vehicles is one piece of a smart mobility puzzle, but cost continues to be a barrier to entry for many public and private entities. Just take the U.S. Postal Service's recent decision to buy mostly gasoline-powered delivery trucks.

Mobility-as-a-Service (Maas) is often unprofitable.Most recently, market entry and exits of technologically innovative MaaS solutions were largely unprofitable due to a lack of broader financial strategy and ability to create a cohesive transportation experience from a variety of service providers.

Reimagining Transportation and Its Funding

Many of the world's most progressive governments and innovative firms have looked to solve the transportation challenge using a mix of creative policy and operating models. Their goal? To prove that transit businesses can both fulfill public service obligations and turn a profit, and thus stay in business.

These models are unsustainable because government funding can't keep up with the demand for transportation that meets public expectations. These expectations are now elevated based on rideshare experiences, and sustainability goals, which are becoming increasingly required globally. At the same time, we recognize government dollars must be used to construct, support and elevate essential transportation services.

Reimagining transportation is of critical importance in the race against the climate and equity crises — making sure people can get where they need to go in a sustainable manner. If we can agree on this, we can explore useful ways to invest government dollars to support the reimagined transformation of our transportation systems. If we reimagine transportation, more people will have access to this fundamental right — the freedom of movement — and we can finally look at MaaS, multi-modality, electrification and autonomous vehicles as viable options to decrease our carbon footprint.

Reliable government funding holds the key to unlocking the mobility future.

Our goals are ambitious, but they are within reach. Let's reset the transportation framework today to create a fair and sustainable tomorrow.

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