Recognizing and Adapting to Changes in Partnerships

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Introduction

Mobility pilot projects foster innovation in the transportation industry. Often these demonstration projects are designed so that a transit agency or private mobility company can test out and evaluate a new product or service to assess if it can be implemented permanently. Through these pilots, agencies explore concepts and creative ideas, usually with limited service model examples to reference. In this way, uncertainty and risk are frequent factors in developing new mobility projects.

Innovative mobility projects often require close collaboration between government agencies and private mobility companies to succeed. Transit agencies partner with private mobility operators that provide products or services that agencies do not have or that would be difficult to develop with their own resources. Because of the uncertainty involved in developing a pilot project, these public-private partnerships are dynamic relationships. Any significant change happening with a partner can affect other partners as well as the project itself. Changes in partnerships can come from different sources and be caused by a variety of factors not necessarily related to the pilot project or the relationship between partners. Regardless, some major and unexpected challenges can impact the project’s development and can result in the redefinition or termination of a pilot project altogether. Many agencies exploring innovative mobility projects have learned that in order to innovate and demonstrate new ideas, they need to be prepared to learn from experience as the pilot project evolves and adapt to changes in partnerships.

The Mobility Innovation Collaborative (MIC) is a Shared-Use Mobility Center (SUMC) program run in partnership with the Federal Transit Administration (FTA) to provide technical assistance to nearly 50 FTA grantees and share lessons learned from innovative projects. Each quarter, the MIC team organizes a meeting to explore in-depth issues related to mobility trends. During the MIC Quarterly Meeting on April 28, 2022, SUMC invited four agencies to present some of the issues that they have faced while working with private mobility partners, and shared their experiences on how they have adapted to changes in their partnerships. Speakers included:

• Penny Grellier, Communications Administrator at Pierce Transit; 
• Ross Silvers, ADA Compliance and Community Officer at Pinellas Suncoast Transit Authority (PSTA);
• Ann Sutphin, Mobility Solutions Manager at the City of Seattle; and
• Peter Fahrenwald, Strategic and Corridor Planning Manager at the Regional Transportation Authority (RTA) in Chicago.

Issues

Each speaker presentation highlighted partnership challenges that agencies have experienced when exploring innovative mobility projects:

• Penny Grellier discussed contracting difficulties and obstacles in finding a transportation network company (TNC) willing and able to partner with Pierce Transit to implement a Mobility on Demand (MOD) Sandbox pilot project to develop a first/last mile TNC service to complement the area’s fixed-route service, to guarantee rides home when traditional transit service is unavailable, and to provide rides to and from park and ride lots. 
• Ross Silvers spoke about PSTA’s MOD Sandbox project aiming to provide subsidized first/last mile service in areas underserved by buses and some challenges with incorporating paratransit.[1] 
• Ann Sutphin shared a summary of the iterative challenges experienced by working with private micromobility and carshare providers in pursuit of a wide multimodal transportation network in Seattle, including regulatory and permitting considerations. 
• Peter Fahrenwald discussed several mobility pilot projects associated with the Regional Transit Strategic Plan, including  the case of a pilot service in Oak Brook, where the initial on-demand service partner went out of business halfway through the pilot, and how the RTA adapted and sought a new partner. 

Key Takeaways:

With the multitude of potential issues that can arise when developing a pilot project supported by private mobility companies, it is important for agencies to be prepared to adapt to changes in their partnership. Below are some key takeaways for agencies to consider as they develop partnerships throughout projects.

Finding the right partner(s)

Finding the right mobility partner for a project can be a challenge in itself, as private vendors have their own needs, motivations, and requirements that may not always align with an agency’s goals. It is important to find a partner that is both willing to sign on to proposed conditions of a novel project, and capable to meet the needs of the agency.

Innovative mobility projects present unique ideas with untested service models. The novelty of a project might present a challenge in finding partners, as private companies can be hesitant to sign onto a project without a specific understanding of commitment levels or prospective profit. This is not always the case, as some private operators may participate in projects without the guarantee of a high profit, instead focusing on boosting visibility for their company, testing ideas, and gaining reputation in the industry.

Additionally, as many mobility projects receive federal funds, agencies generally have to adhere to various federal requirements, like strict drug and alcohol testing. Some innovative mobility projects have exemptions and can test service models without needing to meet certain federal requirements. But some requirements are unavoidable and present further considerations for potential partners.

Contracting

The contracting process can be demanding, and agencies should expect the process to take longer than anticipated. In particular, disagreements between agencies and private companies about requirements or definitions on legal issues like indemnification, insurance, data sharing, and marketing can cause significant delays. By engaging their agency’s procurement departments early on in the process to discuss specific requirements and considerations and by providing information about the project that may impact the procurement process, innovative mobility project managers can address and resolve issues with their partners more quickly.

Data Sharing Considerations

Mobility projects often have technological needs that private partners either cannot or are unwilling to meet. One notable example is discrepancies in data sharing policies, which can cause conflicts especially in partnerships with TNCs. Though public agencies want to use data on user information, ridership trends, origins, destinations, trip time, or other factors to analyze and improve service, TNCs often consider this data private and proprietary and are reluctant to share it with the agencies or through integrated platforms. This can be especially problematic in jurisdictions that have open record laws requiring that transportation data be made available to the public.

Technology Considerations

Other issues can arise when a partner does not provide certain technological features to support the  service. For example, with an on-demand transportation service, an agency might need multiple options to book rides. If the technology partner can only accommodate in-app bookings and not reservations over the phone, the transit agency will have to make other accommodations to ensure the service is accessible to all users.

Partners Going out of Business

One of the most difficult challenges an agency can face in the course of a mobility project is when a partner goes out of business or reorganizes in a way that prevents it from continuing the partnership. There could be different reasons why a partner can no longer provide the service, and the decision for the service discontinuation might not be related to the partnership itself, but the partner agency and mobility project still face the consequences. In the best case scenario, a partner is able to give advance notice of the change in service and it may continue operations for a short time while the agency finds another partner. In other cases, a partner might discontinue its service or go out of business without advance notice. Such a major shift can bring uncertainty to the future of the project, and place a significant cost – including opportunity costs – on the agency.

Long Standing Relationships

Building and maintaining long-term relationships with vendors can make adapting to changes much more manageable. For example, when a partner unexpectedly went out of business for one of RTA’s projects, the agency was able to leverage an already existing relationship and continue service relatively seamlessly through a new provider. Due to previous projects with this vendor, there were already agreements in place that the agency could use to quickly get the existing partner up and running in response to the change. Be aware that this is not always the case; even long-term partners may be unwilling to fill the void when a different partnership fails. However, the knowledge and experience an agency has with a well-established partner can be an invaluable asset in adapting to major changes. A longstanding relationship not only diminishes some of the project uncertainty, but it can make the contracting process more streamlined.

Flexibility

One of the most important factors in mitigating turmoil from changes in partnerships is flexibility. Private mobility companies can be much more dynamic than public agencies with respect to their business strategies and tactics. Agencies should recognize the possibility of changes in the external contexts as well as of private partners updating their business plans as the project progresses. The more flexible and willing to adapt an agency can be, the better position the partnership will be in to continue to deliver the services the project sets out to provide. As Ann Sutphin explained based on the City of Seattle’s experience, it is important that project managers “design programs, permits, and procedures so that they are as agile as they can be,” and to regularly reevaluate and be open to change, in order to “flex with the changing conditions of partners.”

Incentives

Incentives can be a tool for stronger partnerships. For private mobility companies, the ability to work with a transit agency and build their brand is often enough of an incentive in itself, but there are many other opportunities for agencies to use incentives to create mutually beneficial relationships with partners. For example, Pierce Transit joined with its TNC partner during outreach events. This allowed the TNC to recruit drivers and promote its own brand while helping engage with the community and raise awareness for the project.

Community Needs

It is vital to engage with the community both during the project design and its implementation to learn how best to meet community needs, as well as  to be open and transparent about the process, goals and scope of a pilot project. Agencies should not assume that community members understand why changes are being proposed. Thus, agencies should engage with the community to explain how they are trying to improve mobility, enhance the customer experience, increase choices, and be responsible stewards of public funds. If the community is involved throughout the process, they will be more understanding of changes and challenges, more supportive of the project, and more invested in its success.

Conclusion

Demonstration projects are critical for the advancement of the transportation industry. In order to innovate, transit agencies must put forth projects based on creative and novel ideas. This process carries considerable risk, as projects are experimenting with new ideas and might have few comparable examples to build on. Part of this risk comes from partnership-building between public agencies and private mobility companies. These partnerships are necessary to implement an innovative project, but differing goals, resources, and strategies can lead to major changes. Navigating these partnerships and dealing with changes can be challenging, but recognizing that issues might arise and preparing for contingencies is critical to conduct demonstration projects. Public agencies must be adaptive and willing to learn to foster productive public-private partnerships and carry out successful innovative projects.

[1] The Shared-Use Mobility Center’s study When Uber Replaces the Bus: Learning from the Pinellas Suncoast Transit Authority’s “Direct Connect” Pilot details how PSTA developed and expanded its subsidized first/last mile service pilot project, Direct Connect, as a replacement for two underperforming low-frequency feeder bus routes. This case study illustrates some of the challenges that can arise with transit-TNC partnerships and can inform agency approaches for future projects. Click here to read the case study.