Mobile technology, customer acquisition among top challenges for ground transit operators

Ground transit operators in the United States are struggling to keep up with consumer demand for a seamless, mobile-first transportation experience.

According to a survey from digital ticketing and payments provider CellPoint Mobile, only 30% of U.S. mass transit providers currently collect fares through mobile apps, just 39% have an app at all and a slim 37% can accept alternative payment methods such as Apple or Google Pay.

Challenges Facing Municipal, Regional and National Transit Agencies in the United States, which surveyed 103 U.S. ground and mass transit operators, finds that nearly a quarter of national operators (23%) and large transit agencies of 1,000 to 10,000 employees (24%) say implementing mobile technology is the single-biggest challenge they face.

Although mobile offers an inherently flexible solution, respondents cite legacy procurement processes and ticketing and payment systems, plus fragmentation among agency departments about budget, as hurdles.

About a third of operators say they’re unable to change the procurement process (31%) and that the process is too lengthy and slow (30%).

They also say the majority of fare collection and payment systems are developed in-house (44%), while 25% are contracted with third-party suppliers without a formal procurement process and 17% are dictated by a parent company or agency, providing little opportunity for flexible or multiple partnerships.

Additional challenges

Acquiring new riders, too, is among the top challenges for national (23%), regional (33%) and private (17%) operators, as riders turn to digital-first services such as Uber and Lyft.

Some 39% of mid- to large-size operators (with between $10 million and $5 billion in revenue) say they plan to implement a native mobile strategy in the next year, compared to only 20% of operators with more than $5 billion in revenue and 12% of those with revenue under $10 million.

Transit operators also cite rising costs as their biggest challenge, at 26% overall. Mass transit (metro) agencies in particular view this as their top problem at 40%, followed by 28% of private transportation providers, 25% of regional agencies and 23% of national agencies.

Within organizations, only 17% of transit operators responsible for payments and ticketing see rising costs as their biggest organizational challenge, compared with 31% of those in IT and 29% in project management.

According to CellPoint Mobile, operators need to immediately prioritize the development and optimization of mobile apps to meet the demands of today’s travelers.

By integrating mobile into larger business objections, operators stand not only to reduce cost, but to also acquire new riders and improve satisfaction among existing customers.