Rappaport

“We work for riders,” said MBTA Chief Digital Officer David Gerstle.

With that in mind, the MBTA asked students from the Rappaport Greater Boston Applied Field Lab at Harvard Kennedy School to explore ways to add new revenue and decrease vendor dependence by considering whether to bring to market some of the remarkable transit technology developed by the CTD team.

Working under the guidance of Harvard Professor Linda Bilmes and HKS Lecturer in Public Policy Brian Iammartino, students Christine Peterson (HKS ‘21), Anna Kamen (HKS/MIT Sloan ‘22), Sunghea Khil (HKS/Harvard Graduate School of Design ‘22), Iheb Chalouate (HKS/MIT Sloan ‘23), Mojib Ghaznawi (HKS ‘21) quickly dug into this interesting assignment.

“Our mandate was to look into the portfolio of technologies that CTD develops and determine which of these products could be valuable to other transit agencies,” Kamen said. “And then, the question becomes, ‘How do you actually bring those to market with an eye toward recouping some of the development costs that went into these technologies?’”

Issues concerning revenue generation – particularly following decreased ridership during the pandemic – and “vendor lock-in” (in which case when a customer becomes dependent on a particular vendor over time and loses the fiscal advantage of competition), are certainly not unique to the MBTA.

“A lot of transit agencies throughout the country were grappling with this as well,” Peterson said. “They immediately recognized the problem we were trying to solve.”

In that sense, it wasn’t just an opportunity for the MBTA to discover ways to help its own bottom line, but to potentially pilot a unique way of doing business and provide a new way for transit agencies to think.

“It could be that the MBTA becomes a leading voice in how transit agencies can better serve their customers and have a more cost-effective way of tackling a very old problem,” Khil said.

The Customer Technology Department is the MBTA’s in-house software company, born from the 2015 snowstorms which grounded Boston’s transportation system and revealed deficiencies that required tech-savvy responses. The CTD started with an overhaul of the MBTA’s website and, six years later, it oversees four lines of business: Riders Tools (like MBTA.com); Transit Tech (digital feeds of transit schedules and locations); Digital Ride (rider alerts on information screens); and Revenue Partnerships (technologies to help riders and companies buy transit passes).

CTD is a relatively unique concept within transit organizations, but Gerstle believes it’s a concept that makes a whole lot of sense considering the narrow scope of what happens in transportation.

“When you start to look at the size of the transit industry, the number of private offerings is really very small,” he said. “The types of challenges we face as an agency are unique, to the point where it is more cost-effective to build these types of tools in-house, rather than buying something off the shelf or buying software and then customizing it to our needs.”

One fiscal choice considered was to utilize the industry-specific work being done in-house and possibly share it, for a price, with other transit agencies. This is where the Rappaport student team came in.

“You build a piece of software and you think, ‘Couldn’t we sell that?’” Gerstle said. “It’s kind of an offhand question that we really sought to dig into, and so we offered it to the team.”

The first step in the process was to seek out the most marketable of the CTD products, and the students soon landed on “Skate,” a piece of software used by bus inspectors to best manage the minute-by-minute operational decisions for the bus routes.

This web application, first launched in July 2019, helps bus inspectors track as many as 1,000 buses on up to 170 routes at one time. Skate also brought the MBTA’s bus field staff up to speed with the riding public, which had already been able to track buses in real time using consumer applications.

“It came from feedback from our colleagues,” Gerstle said. “We had people in operations saying, ‘Hey, the stuff you guys are doing for riders is really cool, but can you believe that customers have better information about where our vehicles are than some of our people do?’”

With the advent of Skate, staff in the field went from managing routes via paper to using internet-enabled devices that are portable, scalable, and affordable. Most importantly, Skate provided in-depth information in real time to route supervisors, helping to better manage service.

It was Skate that the team decided to study, exploring whether or not it could be commercialized. “Who would want to buy it?” Chalouate said. “At what price? And, why would they do that?”

As part of their research, the students conducted 17 stakeholder interviews. Ghaznawi designed a survey to further gauge the interest of additional transit agencies. The team also conducted a literature review to better understand the history of public entities and specifically, through case studies, any precedent for this work.

“Our job was to present the MBTA with different approaches, including the possibility of not going to market,” Peterson said. “How can they use the products they’ve already developed to generate more value for the T, and what’s the right way for them to do that.”

Among the team’s findings was that in commercializing Skate, the MBTA would potentially see more upside, but it could also present a higher risk.

With that in mind, the team presented various models for consideration, such as leasing a concession to a third party, enabling that entity to sell the software (the third party would pay the MBTA a flat fee and keep any profits above that mark).

Whether or not the MBTA moves forward with any of the options highlighted by the team is still to be determined, Gerstle said, “but it was clear that it’s worth studying further. They gave us a really great start to be able to look at what this means for the long term.”

What the Rappaport-funded project did for the students, meanwhile, was provide a vantage point aimed at the value of local work.

“You can really see the impact you’re having,” said Peterson. “I used to think that federal government was the way to go, but now I’m addicted to the kind of problem-solving you can do at the state and local level.”

Kamen had lived in Boston for two years prior to the field lab study, but much of her education prior to the field lab had been focused on more broad, domestic policy issues.

“It was incredible to have a class supported by the Rappaports that allowed us to better understand the issues facing the community that we’re living in,” she said. “I see transit in Boston differently now. As I’m walking around trying to catch a bus or train, it helps me feel a lot more connected to the place in which I’m living.”

“We wouldn’t be going to HKS if we didn’t want to serve the public needs,” Ghaznawi said. “But thanks to the Rappaports, seeing that through the government technology lens really opened my eyes to the breadth of how one can serve the public.”