LA Metro’s Innovation Policy: Consider Any Good Idea

Ryan Holeywell | @RyanHoleywell | June 30, 2016

Image via flickr/Neil Kremer.

Image via flickr/Neil Kremer.

Governments are often accused of failing to think long-term, and that should come as no surprise. The short-term nature of election and budget cycles means many in the public sector are so focused on day-to-day challenges of running government that the big picture ideas may fall by the wayside. Los Angeles Metro Rail is hoping to change that, pioneering a new office that other governments might want to take note of.

Last year, the agency’s new CEO Phillip Washington created the Office of Extraordinary Innovation and charged it with a big task: find and champion the best new ideas to improve mobility in Los Angeles. The office supports Metro’s departments as they pilot and experiment with new ideas, and it serves as the liaison between the agency and entrepreneurs, private sector organizations, universities — essentially, anyone who may have big, bold ideas that could be applied to the transit agency.

LA Metro tapped Joshua Schank to head the office and serve as the agency’s chief innovation officer. He comes to Los Angeles from Washington, D.C., where he led the Eno Center for Transportation, an influential transportation think tank.

Urban Edge spoke with Schank about his new role and his plans for LA Metro. This interview has been edited and condensed for clarity.

Why did your boss create this office?

He created it for two reasons. When he headed transit in Denver, he saw the value of using innovative financing mechanisms, and the value of the unsolicited proposal process, to accelerate project delivery. Seeing that LA already had a transportation sales tax in place and was trying to do more, he realized having a separate office for public-private partnerships would be critical.

LA Metro's Joshua Schank

LA Metro’s Joshua Schank

What drew you to this role? You had an influential position in Washington.

Eno was the best job I’d ever had, up until that point. As exciting as it was to develop new ideas in the policy world, I felt like I wanted to put into place actual projects. I didn’t want to spend the rest of my life putting together papers on things other people should do. If there was an opportunity to get things done … where better to do it than with someone trying to solve problems, who wants to try new things.

What’s a typical day like for you? Are you meeting with tech executives? Talking to financiers? Lobbying government officials?

It’s all of those things. Mostly, my job is to meet with people who have an idea and figure out what we can actually bring in here. Right now, because we’re in startup mode, we’re spending time hearing people’s ideas and trying to figure out which are worth pursuing.

We’ve got to get things done, and that means not only lobbying outside entities — there are 88 municipalities in Los Angeles County and 22 transit operators — but also navigating through all the bureaucracy.

What innovations are you most excited about?

I’m most excited about the innovative finance. We’re going to the ballot in November for a half-cent sales tax increase. But everyone wants their project done first, and each part of the county has a strong constituency. So we want to see if we can work with the private sector and see if there are projects that have a particular market we can take advantage of to accelerate the timeline.

There are opportunities for the market to say ‘we can get this done faster if we can take some of the risk.’

So would you see most of LA Metro’s public-private partnerships involving toll roads?

There is opportunity there, but because there’s sales tax revenue for transportation, there’s a potential for availability payments, and to maybe use the tolls to fund transit. The way we’ve organized the office is to create a new unsolicited proposal program. It encourages people to come to us with ideas. Before, in this agency at least, people tended to think this agency discouraged unsolicited ideas. But LA Metro’s new CEO has used that mechanism effectively in the past.

In the past, you’ve struck me as someone who was pretty skeptical of public-private partnerships.

I think there’s reason to be skeptical. You wouldn’t want someone in this job who wasn’t. I’m asking ‘what’s the value we’re getting; what’s the value the private sector is bringing that we wouldn’t have without them?’ I’ve got plenty of people saying we need the private sector to build this, but the question is why?

Often times, agencies use public-private partnerships as just another delivery mechanism. They’re just desperate for another way to borrow money. That’s not the case here. We can borrow money very easily. So they have to show real value.

What technology innovations are you exploring?

We’re looking at partnerships with transportation network companies [also known as ride-share companies].We’re looking at fare payment technology, wayfinding — all of those things. For example, we opened the new Expo line last month. We had a partnership with Uber that coincided with that. It’s discounted rides to and from the stations using Uber Pool for people who may not want to use the bus. We’ve never done that before … but it’s our job to say “here are the reasons it’s worth doing” and figure out a way to get the deal done. It makes a lot of sense.

With mobile fare payment, we have to not only figure out the mobile side, but also, how do we make sure its available to all populations. Not everyone has a smart phone. Not everyone has a bank account. Our ridership is something like 80 percent low-income.

Transit here is seen by some as the system of last resort. We need to change that perception. One of the ways you do it is by treating your customers like people.

We’re also working on all these safety issues. We have all these miles of light-rail going through intersections, and we’ve got to find ways to keep them safe.

Are you getting resistance from people, inside or outside the agency, who are afraid of trying new things?

The better question would be has there been anything to which I haven’t faced resistance. Look, nobody likes it when new guys comes in. They’ve tried some of these things before, and they probably didn’t pursue them for a good reason. The people here are very talented and component, so it’s not like they haven’t thought of some of these things. It’s usually the case that there’s some internal resistance either because people are raising legitimate concerns or they don’t have the resources and they’re just trying to make sure the trains are on time and the projects get done. They don’t have the time to face barriers of a new idea.

Our office now has the opportunity to navigate through these ideas. We’re all a bunch of outsiders, and it’s an advantage. We don’t know the reasons something might have fallen apart before. We go along naively, thinking “well, why shouldn’t this be done?”

Are you concerned about how driverless vehicles will affect transit? If there are roving fleets of on-demand driverless vehicles, some say it might eliminate the need for transit systems.

I don’t agree with that. If I did, I wouldn’t be coming to work. We’re interested in the issue. We have bus rapid transit with high ridership, and it’s in its own right-of-way. The technology might be appropriate there, especially if it can improve safety.

The question I always ask is this. Let’s assume we do have these big fleets of autonomous vehicles. How is that so different from Uber and Lyft today? The only difference is price. Maybe it will be cheaper, but you don’t know that. Right now it’s cheaper to live off of Uber or Lyft and not have a car anyway, but most people don’t do it. There are all sorts of reasons they prefer not to rely solely on those services. That’s why I’m skeptical.

And any way you look at it, even if that does happen, you’ll still need transit in dense areas. There’s not nearly enough road space to carry all the people who need to get to the same place.

You’ve spent your whole career on the East Coast. How are attitudes around transit in L.A. different from the attitudes around transit in New York and D.C.?

The big difference is transit is seen as much more of a social service here. It’s odd to me, coming from New York, D.C., Chicago and Boston. In each of those places, transit is an essential part of everyone’s life.

Also, I don’t know if this is true of all Western cities, but another difference is that in Los Angeles, the idea that transit can increase the value of a place still isn’t common. There is almost a mentality that transit is bad for land values. That said, elected officials want their projects in a variety of regions. But there’s still very much a highways-first mentality, like cars are the goal, and transit is secondary.

How is this role different from others you’ve had?

At the New York Metropolitan Transportation Authority, I was a low level person. It’s a different perspective. I used to be satisfied if I came up with some ideas, I got some people to listen to them, and one or two became reality.

Now, coming up with the idea isn’t my job. There are plenty of ideas inside and outside the agency. My entire job is to figure out how to get them done. But I have an appreciation of how hard that is. Now, I’m using a totally different skill set. Nobody cares how good a paper I can write.

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