Remarks at APTA Conference - San Jose, CA


10-09-06

Remarks
James Simpson, Administrator
Federal Transit Administration
APTA Conference
October 9, 2006
San Jose, California

Thank you, Howard [Silver], for that kind introduction.  I am pleased to be here with all of you… the leaders of the public transportation industry.  I would like to thank APTA, and our local hosts Mayor Gonzales and VTA General Manager Michael Burns.  It is also an honor for me to be sharing the stage with Congressman Honda… who serves on the House Transportation & Infrastructure Committee.

I am proud to be here on behalf of President George W. Bush and U.S. Secretary of Transportation,  Mary Peters. 
It is fitting that we are in the hometown of former Transportation Secretary,  Norman Mineta, a legendary public transportation leader and advocate. 

Many of my personal experiences have had a profound effect on me as an advocate for public transportation.  I grew up in New York City, a transit-rich environment… the richest, in fact.  I've experienced firsthand how public transit shapes Americans' lives.  I have seen how public transit empowers people who are just getting a foothold in the economy. 
 
Growing up, I viewed affordable public transit as a necessity and as a vehicle that created a sense of freedom.  Public transit opened a world of social and cultural diversity.  It made summers possible at Coney Island,  winters in Central Park…  and exposed me to Times Square,  the Museum of Natural History,  Yankee Stadium, the World’s Fair,  Chinatown  and Little Italy.

As a teenager, I rode public transit from home in Staten Island… to school in Brooklyn… and to work in Manhattan after school… via six buses, one ferry, and a subway – each day.  All of these influences, fostered by public transportation,  shaped my life and account for much of the reason I stand at this podium today.

And that's why I feel so passionately about transit … the people it serves and the people that it should be serving …  people who count on it to take them to work and school, or who discover new possibilities in life, at the end of a subway or bus line. 
 
I am grateful to President Bush for giving me the opportunity to lead FTA at a time when transit ridership is growing and the $53 billion in SAFETEA-LU programs and resources that the President signed into law are reaching transit customers. 

As the Nation’s chief transit spokesperson, I am excited about bringing the positive perspective of my own transit experiences to decisions affecting our industry.

I believe my experience as a business owner adds value to the FTA.  Every public and private organization needs a bottom line.  For transit, the bottom line is to keep the ridership momentum growing, providing a continually safer, more efficient, user friendly, reliable, and cost-effective operating system.

Like a private business, we seek more customers… In other words,    (a bigger market share).  To succeed in this goal, we need to make sure that our transit systems are managed like successful for profit companies with sound business practices. 

Public transit must deliver the most value for every dollar, we must cut inefficiency wherever possible!  And, embrace technology to improve performance!!  Public transit needs effective leadership at all levels; that constantly strives to increase productivity throughout the organization.

I bring to the Administrator's position experience both as a public servant and an entrepreneur.  Achieving our transit goals depends on the optimum use of both of those skills.  I am committed to what I call… "entrepreneurial government" at FTA… creating a hybrid organization… drawing on the best practices of both the public and private sectors.

Entrepreneurial government means putting the customer at the top of the hierarchy; and turning the organization upside-down. 

At the top you have the American people;  the transit rider;  (our customer),   and the automobile user or non-transit user  -  (our potential customer).   
Next in the hierarchy; are all of our elected officials who represent the needs and interests of our customers.  (The American People) 

They are followed by the transit authorities, suppliers to the industry;  and, at the bottom is the FTA…  We at the FTA… should be the foundation supporting everyone above.
 
Our mantra in the transit industry… at every organization, from operating authority to supplier, should be as follows: You have one of two jobs in public transit.  Either you serve the riding public directly  (like a bus driver who is on the front line) … or you serve someone who serves the riding public directly.  That “philosophy of service” … is the holy grail of successful service providers… public or private.
 
Transit agencies around the world that behave entrepreneurially are best able to thrive.  Robert Cervero, a professor at UC Berkeley, has written in his book… The Transit Metropolis,  that the strongest transit regions in the world have one thing in common…  Adaptability; what he defines as a “calculated process of making change by investing, reinvesting, organizing, reorganizing, inventing, and reinventing… 

Adaptability is about self-survival in a world of limited resources, tightly stretched budgets, and ever changing cultural norms, lifestyle technologies and personal values.”  This is true for private firms and public agencies. 

Change and adaptation are essential to an organization’s vitality and development.
 
In today’s fast-paced global marketplace, there is certainly no patience for business as usual.  You have to think of business; NOT as usual.  Transit agencies that adapt to changing times and create harmony between their transit service and the urban landscape will thrive decades into the future.

We all know this intuitively.  Rural areas, low density areas and urban centers all need public transportation… 

But our transit services must be tailored to the area they serve… commuter rail may be the best option in one setting, passenger vans in another.  The result is a product mix that delivers bus, light rail, vans, HOV/HOT lanes, paratransit… in short, a balanced portfolio of transit choices for our customers.

Reliable and accessible transportation is a prerequisite for a healthy economy and it also means meeting the basic, day-to-day mobility needs of everyone… including… older Americans… individuals with low-incomes and people with disabilities.   It is often the first step toward independence and opportunity.
 
Entrepreneurial government also means being accountable. That accountability must apply to decisions made at every level of the transit industry. 

At FTA, I am calling on senior management to be stewards of change, to look at the big picture, and to be proactive.  A large part of transit management today is seeing old problems in new ways, and asking different questions…

… Can we develop new public-private partnerships?

… Can we coordinate our resources, as we are doing with United We Ride, to get more passengers on board?

… Can we deliver the same high-quality New Starts projects in a faster, more efficient way? 

I take very seriously President Bush's directive that we strive for government that is "citizen-centered, results oriented  and  market-based." 

The transit industry is also accountable to the bottom line… growing ridership while delivering the most cost effective and user-friendly transit systems possible. 

Another part of accountability is recognizing success; in our case, increasing the number of riders… while ensuring we pay careful attention to our cost structure; while enhancing the safety and security of our customers and employees.

Today, at a panel session, FTA will announce a new Transit Ridership Awards Program, recognizing initiatives by our grantees that have resulted in ridership growth of 5 percent or more in a year.
 
We're looking to reward innovations that boost ridership in five areas: 1. fare structure, 2. marketing, 3. partnerships, 4. service coverage, and 5. operations. Transit Ridership Awards support accountability.

Battling Gridlock…/congestion relief initiative

As many of you know, USDOT has made congestion relief the top priority.  And with good reason. 

Frequently, our transportation infrastructure is not meeting the needs of commuters, travelers, and businesses. The tab for congestion in wasted fuel and squandered time amounts to an estimated $200 billion a year.  The Bush Administration and the Department of Transportation refuse to accept congestion as a fact of life.
 
As a former business owner in the motor carrier industry, I experienced first-hand the economic and social costs associated with insufficient public transportation and traffic congestion.  At my Staten Island, New York, facility… a mere 15 miles from mid-town Manhattan…  my vehicles and employees wasted over 4 hours a day traveling from their depot to their job site during the morning and evening rush on Interstate 278, a trip that is normally only a half hour each way off-peak.   (50 percent workday travel time)

An expanded public transit system can help mitigate highway congestion, lower travel time and increase productivity and profitability for our nation’s businesses and individuals alike.

Untangling the knot of congestion will not be easy.  But we need to be innovative as we solve tomorrow's transportation challenges.

The USDOT Congestion Relief initiative attacks congestion from all angles.  Our metropolitan plan, for example, focuses on policies with a proven track record of reducing urban congestion.  Cities that join us in "urban partnership" agreements will try variable pricing plans for highway use.  They might create peak travel-time tolls, toll lanes, or additional HOV lanes. 

Interest in variable pricing is growing dramatically.  If London and Stockholm experiences are any indication, then variable pricing plans will create many new transit customers.  When London introduced its variable pricing strategy, traffic congestion decreased and bus ridership increased 30 percent.

We need to begin thinking now… about how congestion mitigation strategies will impact public transportation… as well as about how public transportation can mitigate congestion.

Hudson County…/ Transit-Oriented Development

I believe transit is the circulatory system of our nation's economy.  Well-designed transit is a catalyst for economic development.  According to our research, every $10 million invested in transit capital projects yields an estimated $30 million in business sales.

For example, I recently built a facility adjacent to the Hudson-Bergen Light Rail Line in Jersey City.  Two decades ago, the Jersey City waterfront was a wasteland of abandoned rail yards and decaying brownstones.  But with a transportation system that includes the new light rail system and … bus… commuter rail… ferry service… and the PATH train…
 
Jersey City now has more office space than Denver, Cleveland or Kansas City, and young families have made the move from the suburbs back to the city. 
 
Success like this must be measured.  Historically, transit planners and developers have struggled to document the benefits of transit to local economies and society.  We can easily document the costs of transit… However, knowing the cost of everything and nothing else, gives us the value of nothing.
 
As many of you know, SAFETEA-LU added "economic development" as one of the project criteria for New Starts. We know that transit is integral to economic growth, and now the challenge for FTA is to concisely assess those benefits.  Right now, we are working to find the best approach, and we hope to publish New Starts and Small Starts rulemaking for comment in early 2007.
 
Our work to add the economic criteria to New Starts evaluation is a tangible recognition of how important transit oriented development is to FTA.
 
What counts gets counted.  I believe… if you're not measuring, you're not managing.

That's why we need to dedicate ourselves to building transit systems that will stand the test of time… transit systems that are built to last and provide notable, substantial benefits to the communities they serve for decades to come.

New Starts sponsors sometimes struggle to design projects that meet our criteria while also realizing important community objectives. 

I like to keep things simple and use analogies whenever possible as… it “saves original thought.” 

For instance, I’ve asked FTA staff to make sure that our New Starts program delivers what is supposed to… wise major capital investments to improve mobility, help reduce congestion, improve air quality in the areas they serve and foster development of viable, safe, and livable communities. 

A simple analogy to me is that developing a New Starts project is like making a pizza.  My concern is…  how many ingredients can you take off a pizza before it no longer is a pizza?

I want to ensure that our federal investment in your community’s New Starts project arrives with enough ingredients to deliver on the promise of the New Starts program. 

We need to build it right and build it to last.

In closing, I believe that one of the most important things we as industry leaders must do…
is to ask ourselves…  “What business are we in?” 

For example, private passenger railroads like the Pennsylvania and New York Central, among the most powerful business interests a century ago, are now extinct, because they failed to adapt. 

They had what I call “marketing myopia” …  The railroads viewed themselves as being in the “railroad business” instead of the “passenger transport business.”  Don’t think mode… think people!!!

If they had viewed their business as passenger transport, they might have purchased aircraft and might still be with us today.

Every week when APTA’s newspaper arrives in your mailbox, think of it as a reminder of the business we are in… Passenger Transport.  Through passenger transport, we provide mobility and accessibility to millions of Americans.  We help manage congestion.  We grow communities oriented around transit. 

Finally, I look forward to working with you in the years ahead to share the good work of passenger transport with the people of this great nation.

Thank you.