(TNS) — The post-pandemic reality for America’s public transportation is bleak. Work from home has solidly set in, leaving transit agencies that rely on fare-box revenue facing a fiscal cliff.
As pandemic aid dwindles, the nation’s biggest transit systems face a roughly $6.6 billion shortfall through fiscal year 2026, according to a Bloomberg tally of the top eight US transportation agencies based on passenger trips. Rising labor costs and inflation are hitting as farebox revenue stagnates after ridership collapsed. Those eight agencies serve regions that combined contribute about $6 trillion annually to the national economy.
Local officials are pressing for help. Last month, the California Transit Association asked the state for $5.15 billion over the next five fiscal years. Without more money, transit officials across the country warn that the public can expect steep ticket price increases and drastic cuts to train and bus schedules, while long-planned expansion projects are on the chopping block. That pleading worked for New York’s Metropolitan Transportation Authority when state lawmakers recently approved a massive bailout.
“If it doesn’t get the kind of funding it needs not just to survive but thrive, service will decrease, people will be unable to rely on it, they will be forced to buy cars if they can, take on massive debt to afford those cars.” said Stephanie Lotshaw, acting executive director at TransitCenter, a public transit advocacy group. “All of these outcomes that we are trying to rectify will get worse if we don’t, if we let these systems fail.”
Before the pandemic, about 7.8 million people — or 5% of the US workforce — used public transit, according to the US Census Bureau. That included about 2 million in the New York City region and more than one-third of workers in the San Francisco Bay area. Ridership nationwide has rebounded to about 70% of pre-pandemic levels, but experts warn a full rebound may never happen.
Here are the financial problems facing the eight biggest transit agencies:
New York’s Metropolitan Transportation Authority
New York’s Metropolitan Transportation Authority, the nation’s largest mass-transit system, estimates that it may take until 2026 for system-wide ridership to reach 80% of 2019 usage.
The MTA had initially projected a $600 million deficit this year that was estimated to grow to $3 billion in 2025 as federal pandemic aid runs out. It won a reprieve when New York Governor Kathy Hochul and lawmakers reached a last-minute deal in April to raise the payroll tax on New York City’s largest businesses to bring in about $1.1 billion for the agency. Lawmakers also agreed to provide another $300 million in one-time state aid to the transit agency. Another $65 million will allow the MTA to reduce this year’s planned 5.5% fare hike.
“This is a national problem,” Janno Lieber, the MTA’s chief executive officer, said in March. “Solving the MTA deficit is not a one year thing, we gotta do it in a way that is going to be a permanent solution for years to come.”
Bay Area Rapid Transit District
San Francisco’s Bay Area Rapid Transit, which serves six million people in a region that’s home to Twitter Inc., Salesforce Inc., and Uber Technologies Inc., in 2019 saw about 66% of its operating budget from fares, one of the highest percentages in the nation.
Ridership has only returned to about 40% of pre-pandemic levels. That means that when federal funding runs out, the agency projects a deficit of $340 million in fiscal year 2027-2028. The city’s public transit has been hit particularly hard because of its heavy concentration of technology jobs that can easily be done from home and from the rout in the industry that’s led to tens of thousands of layoffs.
“If BART doesn’t find new funding sources and the federal emergency money runs out, cutting service and operating hours, and closing some stations will be on the table,” General Manager Bob Powers said.
That fiscal strain is threatening its AA credit rating, which could make it more expensive to borrow. And that’s crucial as it ponders building a second trans-bay tube at a cost of about $29 billion. BART is also expanding to downtown San Jose and Santa Clara, an approximately $9 billion project.
Leaders in the region are drafting a ballot measure for 2026 that would ask voters there to fund public transportation. And lawmakers who represent the region are appealing for steady state funding at a time when Governor Gavin Newsom is proposing slashing $2.7 billion from the transportation sector.
The San Francisco Municipal Transportation Agency, which operates buses and cable cars in the city, has seen its ridership climb to about two-thirds of pandemic-levels. Still, it’s anticipating a $130 million deficit in fiscal 2025. That gap had been covered by the federal government, but that money is expected to run out in the next two years, leaving the agency $234 million in the hole by 2028.
Los Angeles County Metropolitan Transportation Authority
The subway, bus and light rail system in Los Angeles known as Metro last year saw ridership reach about 70% of 2019 levels, with a system-wide farebox recovery estimated at 6%, which is the percentage of expenses that are covered by fares. Metro officials say they can lean on federal assistance through the end of the upcoming fiscal year that begins in July. After that, Metro is anticipating a $400 million deficit in 2025, and $1 billion shortfall in 2026.
Metro says that in order to bring back and retain ridership the system has implemented a series of discounted and free fare programs, which puts further strain on the availability of eligible funding and its take from sales taxes dedicated to transit.
And now that California is mandating the phaseout of diesel fuel that transition has costly implications for LA Metro, which has one the nation’s largest bus fleets. Metro is looking to reach its zero emissions target by 2030. The agency is also seeking to expand its subway system ahead of the 2028 Olympics, another expensive endeavor.
Massachusetts Bay Transportation Authority
MBTA, which offers subway, bus, commuter rail and ferry service to eastern Massachusetts and parts of Rhode Island, faces a shortfall of $139 million in fiscal 2025 and $475 million in fiscal 2026, according to projections using conservative ridership figures. The agency says that one-time reserve revenues are projected to fix the budget gaps in fiscal 2024 and 2025 but say the actual shortfalls will come down.
That deficit comes after a federal safety report last year criticized the transit agency for prioritizing long-term projects over day-to-day necessities.
Aside from its deficit, like many transit agencies, MBTA is suffering from labor shortages. A report released April 3 by the Massachusetts Taxpayers Foundation says the system needs to hire and train 2,800 workers in the next 12 months to safely and reliably operate and maintain its agency. In an effort to hire workers the agency is offering a $7,500 sign-on bonus for eligible roles, such as bus operators, rail repairers.
Washington Metropolitan Area Transit Authority
At the Washington Metropolitan Area Transit Authority, which serves an area that is home to almost 283,000 federal workers, weekday rail ridership has only reached about 50% of pre-pandemic levels with bus at about 80%. The authority is projecting a budget shortfall of $738 million in fiscal 2025, a gap that will grow to more than $900 million by fiscal year 2029.
Metro, as the agency is known, operates 97 train stations and 128 miles of track and 1,500 buses serving 4 million people within a 1,500-square mile jurisdiction.
Washington’s commuters are slow to come back as federal employees embrace working from home and and have been reluctant to return to the office. The slow return has the city’s Democratic mayor joining Republicans to end teleworking.
Officials say they expect revenue growth of $28.5 million thanks to improving ridership, parking, advertising and joint development revenue.
Southeastern Pennsylvania Transportation Authority
SEPTA, which serves five counties in the greater Philadelphia area and connects to transit systems in Delaware and New Jersey, is back to about 60% of pre-pandemic ridership. It is seeing about 600,000 passenger trips per day, compared to about one million pre-Covid.
The system is expected to see federal funding run out in early to mid 2024 with a $240 million deficit annually. The transit provider is anticipating significant fare increases and services reductions starting in fiscal year 2025. Pre-Covid, about 38% of SEPTA’s operating budget expenses were paid by fare revenue, compared to about 21% now with ridership lagging 2019 levels.
New Jersey Transit
New Jersey Transit, the largest US statewide commuter bus and rail provider, says weekday rail ridership is back to about 80% to 90% of what it was before the outbreak, President Kevin Corbett said at an April board meeting.
Still it anticipates a $119 million gap for fiscal year 2025, the last year the agency has Covid aid, according to budget documents. That’s expected to climb to a $957.8 million shortfall in 2027.
The agency has proposed a $2.87 billion budget for fiscal year 2024, including a $140 million state subsidy that’s up $40 million from the previous year, budget documents show.
Chicago Transit Authority
From hedge fund Citadel to the headquarters of Boeing Co., some high-profile companies have left Chicago, adding to the fiscal challenges facing the Chicago Transit Authority as remote works keeps ridership at about 54% of pre-Covid levels, according to 2022 data. The CTA is facing projecting budget holes of approximately $400 million annually going forward with federal relief funds available to cover the gaps through early 2026.
CTA president Dorval Carter in an interview said that crime is impacting the agency’s ridership recovery along with remote work.
Carter said the CTA is looking to diversify its subsidy streams so that it can be in a better position to have financial stability. Whether that will be so-called congestion pricing, which is on the table in New York City, or working with the state to find long-term funding solutions, the CTA is exploring ways to fill their shortfalls.
© 2023 Bloomberg News. Distributed by Tribune Content Agency, LLC.
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When you think of startup funding, you may envision contests with almost no chance of winning or solid venture capitalists who will not be surprised by your concept. “Those who raise millions for their ideas’ implementation are just lucky ones,” you may think. It sounds surprising, but a strong community can help you achieve success much faster and easier.
The explanation is simple: The less a person has to contribute or “risk,” the more likely you are to receive a contribution. In this article, I’d like to share some tips from my own experience that may help you pique the interest of your audience in your solution and turn them into its backers. Each worthwhile idea will find supporters. Believe me.
Related: Who Needs Venture Capitalists When You Can Crowdfund?
1. Make sure your idea is providing a solution
In today’s world, no idea can be completely original, but it’s better if you can come up with a unique solution or significantly improve on something that’s already been made. How did we manage it? We saw the benefits and drawbacks of working in the music industry for a long time and wanted to develop something that would truly bring innovation to the space we know.
We carried out market research prior to building the platform. We researched whether similar initiatives already exist, what they do and the errors they made. Along with estimating the lifetime value of the product, we contrasted our idea with the needs of our target audience. It’s critical to understand whether our project has a solid foundation for the long term.
In our case, we saw the lack of including the fans on the journey and how the number of independent artists skyrocketed, but the way of getting funding for your projects was still limited to signing a label deal. Artists can invite their fans to be part of the journey while giving back to the community of people who have supported them along the way.
2. Show the audience a clear strategy
Be ready to tell the truth. Explain in detail how your platform works, say at least a few words about any possible risks, and show how the money you raise through the power of the community will be used to improve the project and make it more useful for this audience. It’s very important to give people a strong reason to support you.
Why am I emphasizing it so strongly? People are always reluctant to part with money when there is no obvious use for it. Once it is made clear to participants how their money will be used, what features they will have access to and what the ultimate goal is, a significant part of them will be ready to help you crowdfund.
Keeping in touch with your audience is not only about keeping them interested but also about showing how much you value their continuous support.
3. Make it easy to support you
The more clicks required, the less likely people are to join you. So, make the funding mechanism user-friendly. It determines the stability and success of your monetization. Prepare a brief registration instruction, and ensure that the website navigation is simple to understand. People in 2023 value their time and expect everything they use to be convenient.
There are numerous crowdfunding platforms available that are tailored specifically for startups or projects in the Web3 niche. Patreon, SeedInvest Technology, GoFundMe and other similar sites are examples. I will not recommend any particular platform, but I will share some criteria that will assist you in selecting the most convenient instrument.
First, look for a solution that can be directly integrated into your platform in the form of a button or direct link on the main page. Again, convenience is one of the top priorities for successful and predictable funding. Second, choose the one with the most payment methods integrated. Even the most ardent supporters of your idea may abandon you if they have to make multiple transactions to pay you. Third, because there are so many fake website versions out there, don’t forget to educate your users on how to spot a fraudulent link or platform page.
Related: 9 Steps to Launching a Successful Crowdfunding Campaign
4. Don’t forget to spread the word
When choosing the best way to share your initiative, think about which social media networks or media outlets your target audience uses to get ideas. Participate in networking and exhibitions. Making connections with thought leaders and others in the field of the industry you’re looking to enter multiplies your chances of success tenfold.
We played more than one instrument at once. We worked hard to improve our social media, pitched our idea to top journalists and went to events where we could meet potential investors on a regular basis.
The specific marketing plan you use will depend on the market you are trying to reach, your target audience and the services you plan to offer, but the following tools will come in handy 99% of the time:
Develop your media relations: Promotion through news releases in global and specialized media is beneficial at both the project’s infancy and maturity stage. They will create “hype” in the first instance and enhance your expertise in the second. Create articles for publications, comment on current events, participate in interviews, and share announcements in the media and on the project website.
Utilize advertising services: Set up targeted ads on social networks trusted by your primary audience, use retargeting, and connect with influencers. Brand ambassadors who are thought leaders in your chosen niche will lend credibility to your project.
Educational content: Blockchain, Web3 and other complex topics require user education. This task can be easily completed with high-quality content: a site blog, FAQ, research, whitepaper, videos (both long and short, like TikToks), podcasts, AMAs and case studies. In this case, the user interaction path with your product might look like this: reading a blog post, visiting a landing page, and finally, requesting a demo of your product or leaving a request.
Effective social media marketing: Over time, it contributes to the formation of a community of devoted brand fans. Share news, solicit feedback, introduce the team, post behind-the-scenes content, employ various forms of storytelling, use memes or niche-related jokes and so on. A funnel could look like this: clicking on ads, subscribing to a channel, visiting the site and requesting a demo.
Affiliate marketing: Startup founders frequently do not have enough time to promote their businesses, which is understandable given their other responsibilities. That is why it can be a great option to outsource promotion or launch affiliate programs. The latter allows you to get a predictable result at a predictable price, which is especially important in the early stages when resources are scarce.
Related: 12 Key Strategies to a Successful Crowdfunding Campaign
As you can see, an idea lays the groundwork for a project but does not guarantee its success. Even ideas that aren’t very original can sometimes work because the people who came up with them did a good job of assessing their resources, chose the best ways to market them, and perhaps most importantly, didn’t give up.
My goal was to show you that angel and venture capital investors are not the only sources of multimillion-dollar funding. Millions can be earned through creativity and consistency. You can design your own strategy that will ultimately produce excellent results using the resources I provided from personal experience.
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Crowdfunding, equity financing, grants, or debt financing? Which do you choose to raise money for your business?
Join our webinar, Bianca B. King, Entrepreneur & Marketing Strategist, teaches you 7 methods that you can use to raise money to launch their companies, including the advantages and disadvantages of each type of funding.
7 Financing Options
Equity Financing:
Debt Financing:
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Alternative Financing:
Register now to secure your seat!
About the Speaker:
Bianca B. King is an entrepreneur and professional matchmaker on a mission to help women accelerate their success. As the CEO & Founder of the exclusive collective Pretty Damn Ambitious™, Bianca matches high-acheiving women with premier vetted and verified coaches so they can finally amplify their ambitions and achieve the personal growth and professional success they desire. Bianca is also the President and Creative Director of Seven5 Seven3 Marketing Group, a digital marketing agency that has served hundreds of entrepreneurs since 2008.
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Birdseye’s platform generates marketing plans with step-by-step instructions.
Toronto-based artificial intelligence (AI) startup Birdseye has secured $500,000 in pre-seed funding as part of its mission to help e-commerce businesses automate their marketing workflows.
The capital came from Ohio-based private equity firm Drive Capital and its $80 million seed program that invests in early-stage companies in Toronto as well as Chicago, Atlanta, Columbus, and Denver. Its portfolio includes the likes of Duolingo as well as Canadian startups Koho, ApplyBoard, and Cyclica.
”With funding in place, Birdseye is well positioned to level the playing field for growing brands.”
– Matt Bogoroch, Birdseye
Birdseye is entering a saturated market for AI applications in marketing, especially now that enterprises such as Microsoft and Google have taken part in this new wave of generative AI.
Generative AI has been widely used in marketing to create text, video, and image content. However, prior to the recent boom in generative AI, machine learning has been mainly used in marketing to provide competitive intelligence to businesses. Birdseye believes this isn’t enough.
According to Birdseye, its platform goes beyond standard e-commerce analytics reporting, which typically lacks solutions for what to do with the collected data. Birdseye uses AI to automatically generate step-by-step marketing plans.
Each week, Birdseye users receive marketing plans that are designed to be simple to act on. The platform is able to identify which specific product to advertise, who to advertise it to, and which channels to deploy the advertising campaign.
Birdseye also noted that each AI-generated marketing strategy is also accompanied by an expected end result, meant to help businesses pursue marketing opportunities that are most likely to yield lucrative outcomes. Birdseye’s software integrates with data from various e-commerce and social media platforms, including Shopify, Google, TikTok, Meta, and Klaviyo.
RELATED: Hippoc announces $3 million to help marketers test ad campaigns using neuroscience
Birdseye was founded in 2021 by brothers Matt (CEO) and Adam Bogoroch (COO) as well as Shardul Frey (CTO). Matt and Frey shared a cubicle at KPMG in 2018, where they advised organizations on AI and developed advanced analytics solutions.
At one point in their time at KPMG, Matt and Frey recognized the challenges involved in interpreting data for large enterprises and how small businesses don’t have access to traditional management consulting.
Tapping Adam to join its founding team, Matt and Frey decided to establish Birdseye to provide “sophisticated technology and analysis at an affordable price for small and medium sized businesses.”
Matt told BetaKit that Birdseye is continuing to develop marketing solutions for Shopify brands and the broader e-commerce industry. This $500,000 in new funding will be allocated towards expanding Birdseye’s core engineering team.
“With funding in place, Birdseye is well positioned to level the playing field for growing brands. Our goal is to become the leading ecommerce software for Shopify and ecommerce businesses,” said Matt.
Featured image courtesy Birdseye.
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