Boards of directors are surrounded by mystique.
From film scenes of arduous attempts to impress long tables lined with intimidating people to Donald Trump firing contestants on The Apprentice, boards are a symbol of omnipresent power and wealth. There’s even a bar in Washington, DC called The Board Room (a clever play on words, as the bar offers its patrons the chance to play board games) that caters to these desires.
In reality, boards have a pretty straightforward job: govern the entities they oversee. These entities include Fortune 500 companies, local little leagues, and pretty much everyone in between – including both public and private transportation providers.
Boards typically are not directly involved in day-to-day operations, but they have the final say on executive-level hires, budgeting, and other vital decisions.
Though it’s difficult for ride-hailing companies to serve cities more efficiently than public transportation, their owner-elected boards serve customers more effectively than the boards of publicly funded transit agencies.
To fix this, policymakers should restructure transit agencies’ boards to directly represent and serve the interests of riders, whose livelihood is invested in transit.
Private sector boards strive to attract customers. Transit boards are set up to fail.
Private-sector boards represent, and are selected by, the companies’ owners.
Shareholders elect the boards of profitable, publicly-traded companies, such as General Motors and American Airlines. For these shareholders’ investments to yield strong returns, the boards they elect must ensure that the company provides a product that people use.
Board members of companies propped up by venture capital may have murkier motivations – for example, Saudi Arabia controls a key Uber board seat – but, at least for the near future, even these board members’ success depends on attracting riders.
In contrast, most transit agencies’ boards are designed to represent taxpayers, including those who rarely ride the system, and may not even live or work in an area with transit. Typically, elected officials either appoint board members or serve on the board themselves. Examples include:
- WMATA, which has an eight-member board: two each representing DC, Virginia, Maryland, and the federal government. The board currently consists of a combination of elected officials from the three local jurisdictions and appointees from outside government.
- Sacramento-area bus system Yolobus, which has a five-member board: one representing each of the four incorporated Yolo County cities it serves, and one representing the county as a whole. All current Yolobus board members are elected officials from the cities and county.
- Amtrak, which has an eight-member board: CEO Richard Anderson, U.S. Secretary of Transportation Elaine Chao, and six others appointed by the U.S. President. No Amtrak board members currently hold elected office.
Much more rarely, transit board members are directly elected to their positions by the general public. Examples of transit agencies with elected boards include the San Francisco Bay Area’s BART and AC Transit.
In other cases, providers may not have a board at all – for example, the Maryland Transit Administration is a sub-agency of Maryland DOT, which a governor-appointed secretary oversees.
The shortcomings of today’s transit boards are well-documented. To start with, board members are notorious for not riding the systems they govern. Lacking first-hand knowledge, they often struggle to understand transit’s ins and outs, contributing to errors ranging from absurd gaffes (such as parking in bus stops) to downright dangerous behavior (such as conceding to car-based competitors). The chair of the WMATA board has even called for the federal government – whose interests are even more removed from riders’ than his are – to take over the agency.
Transit agencies’ riders are their biggest investors
Just as shareholders’ finances depend on the stock market, transit riders’ life fortunes depend on the day-to-day performance of their chosen systems. To riders, unreliable transit service means lost wages, missed medical appointments, daycare late fees, and heart-wrenching absences from family activities. And without sufficient mixed-income housing near transit hubs, riders may be priced out of areas with decent service.
But despite their great investment in transit, and in contrast to investors of private companies, riders currently have little voice in transit agencies’ governance. In much of the United States, only a small percentage of residents currently use transit regularly. Thus, the votes of transit riders are badly outnumbered in the elections that determine (either directly or through later political appointments) who serves on their system’s board.
Some transit providers, including WMATA and Yolobus, have rider-comprised advisory councils that, on paper, are intended to keep the board informed about riders’ concerns and interests. However, these bodies face substantial limitations. For example, WMATA’s Riders’ Advisory Council – though currently chaired by a knowledgeable Transportation Research Board engineer – has no hard power, is comprised of board-selected members, and was nearly dissolved by the board last year.
Transit boards should provide riders the representation they deserve
Just as shareholders elect the boards of publicly traded companies, riders should elect the boards of transit agencies, giving them the representation they deserve in return for their investment. Riders’ votes would be counted using a formula that considers how much they use the system. Credit union boards, which are elected by account holders, are a comparable private-sector example.
Important challenges to address include:
- Balanced representation: While the interests of riders living in dense, high-demand urban cores certainly are important, transit is every bit as essential to riders in lower-density, outlying parts of a region. Thus, the board would have to be comprised in a manner (likely a combination of district-based and at-large seats) that ensures these riders also have meaningful representation.
- Ridership-tracking technology: For large transit systems, data from registered stored-value transit cards (like WMATA’s SmarTrip) could be used to calculate the ridership-weighted value of an individual’s vote. However, given large bureaucracies’ inherent resistance to change, smaller transit providers that don’t have stored-value cards (and thus don’t have a way to track individual non-pass holders’ ridership) may be more likely to restructure their boards first.
- Board expertise: In a democracy, there’s always a risk that an unqualified candidate could win an election, no matter how sound the electoral process is. Required training for board members on the intricacies of transit would help address this. Furthermore, data on board members’ transit usage could be made publicly available, helping hold them accountable.
While no existing American transit board truly represents riders, some boards, which govern relatively successful agencies, come closer to doing so than others. For example:
- New York Metropolitan Transportation Authority: While all MTA board members are appointed by the governor, some of the appointees are recommended by various interests associated with that region’s transit system. Recommenders include the rider-comprised advisory councils of New York City Transit, Long Island Railroad, and Metro-North – a clear tribute to the NYPIRG Straphangers Campaign and other organizations’ decades of advocacy. While transit in New York certainly has its issues, the region still boasts our country’s most extensive, heavily used system, featuring citywide rail and bus service that operates around the clock.
- Capitol Corridor Joint Powers Authority (CCJPA): Northern California’s Capitol Corridor train is technically an Amtrak route – the system’s fourth busiest. But CCJPA has its own board, made up of select local transit board members from the jurisdictions the route serves. While not perfect, CCJPA’s board more closely represents its riders than the national Amtrak board described earlier, and the service indeed outperforms many national board-governed routes. For example, the Capitol Corridor draws more per-mile riders than the flagship Acela Express, and its on-time performance beats those of the two long-distance trains it shares its tracks with (the Coast Starlight and California Zephyr) by 25 and 38 percentage points, respectively.
- Unitrans Davis: As I wrote previously, Unitrans serves the California college town where UC Davis is located. Ninety percent of the bus system’s riders travel to or from campus, and all undergraduates receive unlimited trips through a flat tuition fee. Unitrans doesn’t have a traditional board, but rather is governed by ASUCD, a student government organization that, while tasked with much more than just transit issues, is elected by the undergraduate students who pay the tuition fee. Overall, the transit agency provides reliable service, enjoys a positive relationship with the community, and has avoided the ridership challenges that other providers across the country, including Yolobus (which also serves Davis), are struggling with.
Boards representing riders’ interests would boost transit agencies’ efficiency and accountability
Just like transit agencies’ flawed boards today, rider-elected boards would not determine the amount of overall funding a system receives, which would still be decided by lawmakers and at the ballot box. Rather, they would have the final say in how those funds are spent.
Rider-elected boards would be motivated to make decisions that ensure that their agencies, using the resources available, serves their riders as effectively as they can. Any member who fails to fulfill riders’ needs would be vulnerable in the next election.