A Top 10 Disruptor by the Eno Foundation and one of Mass Transit’s Top 40 Under 40 list, Matt Cole is President of Cubic Transportation Systems (CTS) and senior vice president, Cubic Corporation. Matt led the launch of the NextCityTM project, and in this edition of POLICYSMART, he talks about how new mobility options, integrated payment systems, AI, and autonomous and connected technologies are quickly coming together to create the smart cities of the future.
Regina: (00:06) From GRIDSMART Technologies, I’m Regina Hopper. Welcome to POLICYSMART.
Regina: (00:18) So welcome to this edition of POLICYSMART. This is a special one because, um, you probably have seen the news that GRIDSMART Technologies was acquired by Cubic, and I’m now sitting in Knoxville with Matt Cole who runs, he’s the president of their transportation division. I’ve already got that wrong, but I’m going to let him explain to you and he runs the next city project, which those of you who have been a part of the new mobility systems in particular, the integrated new mobility systems have seen Cubic at work. So first of all, Matt, thank you so much and welcome.
Matt: (00:54) It’s great to be here. Thank you.
Regina: (00:56) So tell us a little bit about how you see the intersection of GRIDSMART and Cubic coming together.
Matt: (01:03) Well, first of all, I love the pun, intersection. So as you mentioned, we all, our main focus is on our NextCityTM vision, which is really Cubic’s strategy for mobility to service since we created the vision nearly eight years ago now. Um, it’s really been oriented around three core pillars, the central one being a single payment account for all forms of Mobility so, no matter whether you’re riding transit, using it, um, a dockless scooter, a bike, riding Uber, Lyft, riding the train, driving your car and paying a road toll and a parking charge, however you’re choosing to move the payment transaction associated with that journey is integrated into a single payment account for you. And then the other two pillars being created, an integrated customer experience. So no matter how you plan and pay for your journey and receive information, updates the entire all forms of mobility, the payment, that information and the real-time information that you’re getting associated with your journey all comes through a single customer experience.
Matt: (02:09) And then the operations analyst analytics pillar where we truly are in an integrated fashion across all modes of transportation, optimizing the flow of people and traffic through cities and through regions. Last couple of years, we’ve had tremendous progress against the vision on the single payment account that we want a great deal of work delivering next-generation payment systems that will absolutely enable that. In the last year, we’ve captured 61 percent of the US transit market committed to our mobile application at which will deliver the integrated customer experience platform and recently we won a congestion management project in, in Sydney, which we think represents the future of how regional traffic and transportation management will occur. And then with the recent acquisitions of Trafficware and GRIDSMART, it really rounds out the entire strategy for us, um, and that the ability to look across all of our technology and look at the way people are choosing to move through their payment transactions, whether, whether riding an uber or riding transit or driving their car, and then being able to optimize and give them information about that journey all the way down to the specific intersection that they’re at right now.
Matt: (03:20) I just think that that intersection between us Trafficware and GRIDSMART and now the combined Cubic team, I just think the potential is phenomenal.
Regina: (03:28) So what do you see in 2019 if you’re looking worldwide, right? Because you operate worldwide. You talked about the integrated mobility from really the curb to a scooter. You talked about a scooter moving first mile, last mile, what are, what are the issues for 2019 as you think about the acceptance of these? Not only the, the, the intermodal from a payment perspective, but just what the customer sees from what they can do because the customer is either acity, county, state, an agency something. What is that 2019 issue
Matt: (04:03) Yeah, the, What I would say before I talk about 2019, I’ll just like to retrospect on past years you know with the arrival of all of these new mobility services, um, you know, in, in recent years, um, you know, I think in the past we’ve seen some don’t, some degree of disintegration of mobility. Um, so you know, people, people that would otherwise have ridden transit now having an Uber App on their phone and I’m conducting a transaction and the journey through an Uber App and then having to do the same thing through that, the transit app and not having those services provided in a single experience. Um, I thought 2018 in particular was the year where we really saw the industry change from that kind of disintegrated approach of seeing all of these modes as being competitive to one another, to the conversation actually being around how do we integrate and create a truly mobility as a service and having an integrated mobility experience for people. So I think coming onto 2019, I think 2019 is a year where we’ll really start to see that become real, where we see some really meaningful integrations between these new mobility options like the ride, ride sharing providers and transit, for example, where we will see some really meaningful advances in how we can enable much better payment experiences for people that are riding around cities, including on transit and taking that Sydney Congestion Management Project as an example. Some really meaningful advances in how we optimize the flow of traffic in regions and cities.
Regina: (05:37) So we see the Ubers and the Lyfts of the world that’s mobility on demand. Um, the infrastructure around that is basically relying on the provider whatever car I have, and I’m going to be an Uber driver or Lyft driver, I use it in the transit system. However, that’s a transit system. And you were talking with me about how expensive it is to run the transit system. Not all of our transit systems are really up to date. Right? So forget the payment system, just the fact that they have trouble moving up and down the rails. Right? So for a city or an agency that is accepting new payment mobility systems, um, in these integrated systems, what do they have to do for the sort of the day to day to make sure that they can move into the world that you envision when they have all these other issues on their plate?
Matt: (06:31) Yeah, so, you know, I think, um, I actually think there’s a really good alignment between some of those really, really clear and important challenges. The transit agencies, but most of them, most of the original systems in the US, for example, have major, major state who could repair deficits in terms of the capital that they really need to improve their transit system and the funding they have available to them. I actually think there’s a really clear alignment between some of those day to day challenges that exist today and mobility as a service and what I mean by that, these integrations between transit and these other forms of mobility, I think all creates potential for us to convert people that are currently single occupancy drivers in their own private vehicles into future future customers. For people like Uber and Lyft and new riders for transit. And so I think there’s an incremental revenue opportunity for everyone here of going after that.
Matt: (07:31) You know that the major contribution to congestion is those single-occupancy drivers. By the way, I’m one of those when I’m home in San Diego, but I think there is an incremental revenue opportunity for the new mobility providers and transit from decongesting our cities by getting people out there that are also. If you look at the makeup of a transit system, there’s some immensely efficient and you’re not their profit making but profitable routes that transit agencies run with a very densely ridden and you’re often over capacity and you clearly know, economically viable, but there’s many other routes that transit agencies and services as well as the agencies have to provide for some other reason that they need to have those services there. And those are the ones that are heavily subsidized. Now with the new mobility options, perhaps there’s a way of delivering those necessary public services, but have much lower cost than running a bus route and if we can do that, then you free up that subsidy for those agencies to then buy down some of some of those funding constraints that they have and actually improve the infrastructure for the density written services.
Matt: (08:47) So I think I actually think there’s a, a clear alignment obviously. Um, yeah, one is visionary and future oriented and one is real right now, but I don’t think we should see them as, as, as, um, uh, odds with one another or different things. I think there is an alignment there,
Regina: (09:04) How much in this, a lot of this new mobility systems, the reason that policymakers, lawmakers like it is because it helps promote equity and transportation, accessibility and transportation for those populations that don’t have it. So what in Cubic’s world are you doing to help advance those equitable and accessibility issues?
Matt: (09:26) That’s a really great question and one that’s important to both me personally and, and to the company and um, with, with so much about business in the travel transit payments, um, domain. Yeah, that’s a day to day thing that we were very focused on is how do we make our technology usable for everyone, including those people that would like to still pay cash for their transit, right. And being able to address that or big or maybe they don’t have any other option. That’s the only way they can pay for their rides. So that’s a real day to day focus for us in everything we do. It’s also the reason why we feel very passionate about, um, mobility as a service being led by government agencies, not necessarily exclusively, um, you know, the new mobility providers providing mobility as a service platforms as well. That’s great, but we feel strongly the cities need to have their own mobility as a service platform so that they can make sure that mobility as a service platform can cater to every type of customer and ensure that that social equity exists in, um, a mobility to service world. And so we’ve been putting a lot of effort in particular in the last 12 months we’ve been putting a lot of effort into helping our customers, which all those cities really start thinking about what is their role in mobility as a service? How do they ensure that that social equity
Regina: (10:52) Well, and how many of them actually think about that as one of the more primary beginning functions of this service. Do they think that way? I mean, is that most, most of the time when you deal with public officials in particular with transportation I found, is that the common good, the safety, the actual user experience is actually really important to them. Um, but, but are they thinking that way now as they look to try to move into new technology or are you having to convince them that that’s where they should start?
Matt: (11:23) I think they are, you know, obviously every, every customer and every city has its varying priorities in terms of what they need to be focused on. But just as I said, know where I saw 2018 be this year where we started really moving away from this disintegration into really talking about how do we integrate and become a, you know, enable mobility as a service. I also thought that 2018 was the year where I saw really meaningful advances in our customers thinking and cities thinking in terms of mobility as a service. And one example I would point to is one of the contracts we signed last year was a contract with LA Metro to provide them with a suite of open APIs so they could open up their tap cartridge, their transit card, back office to really being the mobility service payment platform for the LA region and, and coinciding with that releasing a mobile APP, which we’ll do in 2019, which will be the window or the interface for people in the LA region so that mobility to service is a really great example, LA Metro as a public agency, really stepping out, being visionary and saying we are going to take the lead and make this happen in LA.
Matt: (12:35) And obviously because of the regional partners that already exist on the, on the, on the tap card that extends beyond just the scope of the LA Metro System Internet, as I said earlier, that whole region.
Regina: (12:44) Well, if there’s any place that needs it, maybe other than Washington dc, but when you look at the demographics of Los Angeles and how everybody’s really married to their car and that, that transportation from a mass transit perspective really hasn’t worked there.
Matt: (12:59) That’s an absolute, you know. And um, you know, filling in his team at LA Metro, I think, uh, uh, and, and we’ve made it as well. I just think they’re doing a phenomenal job of really thinking about the future of how mobility will work in LA and I think they’re, they’re a great example.
Regina: (13:17) So you touched on it once, but I want to return to it. So when you look at this integrated system of mobility, but tell us a little bit more about why the acquisition of GRIDSMART, the acquisition of Trafficware became important to, to build out those systems for Cubic?
Matt: (13:36) Yeah. So, well first of all, um, you know, they clearly fit with the next, NextCityTM vision, you know, the ability to optimize corridors and intersections using the great technology that Trafficware and GRIDSMART have is clearly part of congestion management is it’s, it’s clearly going to be part of how we, we make our cities and regions more efficient in the future. But they’re also standalone. Just exceptional businesses. And Cubic has this mantra of a technology-driven marketing lead market leading both GRIDSMART and Trafficware. Clearly a very technology-led companies have market-leading solutions. So, you know, and the cultures of the two businesses are very similar to ours. They’re very customer focused, they’re very innovation focused and um, so we just go on every level from, from cultural to technology to strategy. We just see a real clear alignment between both companies and we’re really excited to welcome them into the family.
Regina: (14:35) One more question. This is a global question. There’s a lot of talk in the United States with the fact that our government is not functioning well on many levels. States and localities are having to kind of take the lead in moving transportation, everything else forward. You work all over the world. How does the United States compare with what’s happening in making these new mobility systems real with the rest of the world?
Matt: (15:02) Um, you know, obviously the, yeah, the, the political challenges and the political dynamics differ country to country. Um, and you know, what I would say is, you know, I think, I think the United States, um, is on par with the rest of the world you know, but accepting that, you know, there’s always a range, right? You’re always gonna have, um, the, you’re, the front runner isn’t. I used LA as an example. There’s other, there’s other examples out there in the US, but there’s also examples out there internationally as well. I think about transport for New South Wales in Sydney, Australia that are doing some really exciting things around mobility as a service, future future mobility. And so I think there’s this both shining examples in the US and there’s shining examples internationally too.
Regina: (15:52) Said very diplomatically, well, Matt, congratulations on the acquisition, but more importantly, congratulations on the work that you all have done to make this integrated mobility a reality for people. Um, I mean being one of those people that doesn’t use mass transit because I find it to be difficult. Um, I think that the work that you’re doing is gonna make a big difference.
Matt: (16:18) Well, thank you for saying that. We’re very committed to making it simple for you. And, uh, obviously the payment and information technology associated with transit is part of that more broadly across the NextCityTM vision. My, my team over the last few years is, have just done some really remarkable things and um, worked remarkably hard on it. I’m proud to be on the team with them and uh, to see them get the accomplishments that I think they deserve. And um, yeah, once again, I’m, I’m delighted with the Trafficware and the GRIDSMART acquistions and uh, and, and it’s great that the family is getting bigger and it’s great to see you again.
Regina: (16:54) Thank you. It’s great to see you too. And I’m sure we’ll talk to you again.
Matt: (16:56) Absolutely.
Regina: (16:57) So thanks so much for listening and participating in the POLICYSMART podcast. You can download the POLICYSMART app on the Apple App Store and Google Play and you can listen to the podcast on Apple Podcast, Google Play, and now on Spotify. And also please leave a review to help people like you those interested in the next generation of mobility and intelligent transportation find us.