Riding Public Transit for Rewards

MTI research assesses the effectiveness of transit agency rewards programs to increase ridership and economically enhance TODs
February 26, 2020
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San José, CA

Mineta Transportation Institute (MTI) research identified practical lessons and promising directions for integrating a rewards or loyalty system in transit smart cards. In “The Potential for Using Loyalty Rewards and Incentives Programs to Encourage Transit Ridership and Regional Transportation and Land Use Integration” Dr. Christopher Ferrell investigates how agencies across the U.S. and Canada have begun to design and test loyalty rewards programs to battle ridership decline. Furthermore, the research assesses how such loyalty plans can be applied to businesses in transit-oriented developments (TODs) to enhance the economic vibrancy of those TODs.

The research used a two-pronged approach: A comprehensive review of the transit industry, business marketing, and related academic research that would be involved in implementing such a program and expert interviews with key personnel working to develop and operate such a loyalty program. Findings indicate that:

  1. There is a lack of research linking transit smart cards, transit ridership and shopping behavior in TODs.
  2. It is important to retain existing transit riders, potentially using loyalty rewards programs to keep these riders (or win back prior riders).
  3. There is both need and potential for rebranding transit’s public image.
  4. There are risks of overreach when implementing a transit loyalty rewards and incentives program.
  5. There is high potential of incentives and loyalty rewards programs in building transit ridership, TOD, and beyond.

While such programs have the potential to retain and attract ridership as well as bolster TOD economic growth, additional research in the form of practice-driven experimentation, market segment analysis, and increasing personalized interactions with existing riders is needed.

ABOUT THE MINETA TRANSPORTATION INSTITUTE

At the Mineta Transportation Institute (MTI) at San Jose State University (SJSU) our mission is to increase mobility for all by improving the safety, efficiency, accessibility, and convenience of our nation's’ transportation system. Through research, education, workforce development and technology transfer, we help create a connected world. MTI was founded in 1991 and is funded through the US Departments of Transportation and Homeland Security, the California Department of Transportation, and public and private grants. MTI is affiliated with SJSU’s Lucas College and Graduate School of Business.

ABOUT THE AUTHORS

Dr. Christopher Ferrell works as a transportation consultant and most recently as MTI’s Senior Research Scientist, focusing on the integration of transportation and land use, and travel behavior.

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Contact:

Irma Garcia, MTI Communications & Workforce Development Coordinator

408.924.7560

irma.garcia@sjsu.edu