Private transit funding, public good?

By Robbie Webber

Businesses have been funding private employee shuttles and buses for some time, and subsidized or fully-funded transit passes have become a common employee benefit, but sneaker company New Balance may have set a new bar for transit subsidies. As part of a 14-acre development to be anchored by its new headquarters in Boston, the company is building a new commuter rail station. The development near the corporate building—featuring a sports complex, hotel, restaurants, and retail—is expected to benefit the neighborhood overall, but the improved transit access seems to have neighbors especially excited.

Transit agencies across the country are hurting for funding, and corporate sponsorship of stations is not new. Companies have even paid for local bus routes that will serve their employees, sometimes leaving other commuters out of luck when the company moves or stops subsidizing the route. Now Boston businesses are showing more willingness to step up and directly fund transit or help make the system work better.

Across the country, the spectrum of private shuttles, privately-subsidized public transit, and general public transit brings into question how our transit systems should work. Transit agencies have struggled for years with the demands of providing convenient, efficient service targeted to commuters versus wide-area, but less frequent, service to transit-dependent city residents. So when transit funding is cut, or there is an opportunity to provide a new route with private funds, transit agencies must decide whether the service funded by private sources fits with the overall transit plan for the area.

While privately-subsidized express buses run by a local transit agency—or a new station on an existing rail line—are enhancements to all transit users, not all privately-funded buses mesh well with other transit service, as the San Francisco-Silicon Valley area is discovering. Yet many see for-profit and private transit as a supplement to public transit that is straining to maintain service as costs rise and funding falls. Will these private efforts skim off well-heeled riders, leaving public agencies to maintain more scattered and expensive routes?

Clearly, however, more and more private companies are eager to give transportation alternatives to their employees. Whether they provide their own shuttles, pay a transit agency to run a bus, or choose an office site based on transit access, employers are finding that high-quality transportation options beyond a parking space are now required to attract top talent.

Robbie Webber is a Senior Associate at SSTI.