Why BART Needs an Overhaul

how basic marketing could fix the Bay Area’s mass transit systems

Posted 2009-01-12 04:00 in environment, experiences, improvements, marketing, pictures, transportation


Last week, I was back in the Bay Area for a day after a trip to Asia. An excursion from the airport on BART reminded me what an egregious marketing disaster the system is for residents of Northern California. It’s a classic example of a well-meaning institution that does not take stock of how it does things, how its methods affect customers, and how that affects their overall revenues and performance. To understand why this is important, we first have to understand the current context of BART and the role it serves in the Bay Area.

BART was developed in the 1960s as a means of getting residents of outlying suburbs in the Bay Area to the city centers of Oakland and San Francisco. It was fashioned as an inter city (between cities) transport system, not an intra city (within a single city) transport system like New York, Tokyo, or Hong Kong. Therefore, the station distribution of the BART system is wider, but with lower density. That means that while BART travels further than most other subway systems across the world, it’s also harder to get to a station, your trip is significantly more likely to involve several legs involving different types of transport, and you have to wait longer between the arrival of two trains. These facts already pose a psychological barrier to potential ridership, so it is important that if administrators want to encourage BART usage, that annoyances be minimized; after all, any excuse a rider can find not to take BART, they likely will employ.

It is for that reason that it is tragic that BART is from top to bottom such a frustrating transit system, and seems to me the perfect example of a wasted opportunity— so much so that it is really an embarrassment for an area of the country that prides itself on technological leadership and progressive thought. At every turn, the BART system seems to want to discourage ridership, and make it ridiculously hard for passengers to do things that should be very simple. Here are some observations about BART that I’ve made, culled from years of experience riding it.

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Bicycles are in Desperate Need of (R)evolution

and why companies should make it easy for people to adopt their products

Posted 2008-06-24 18:55 in business, business models, economics, environment, improvements, marketing, sustainability, transportation


Here’s the problem, as I’ve elucidated on a previous post: bicycle companies have not given the non-user a strong incentive to switch from cars to bicycles. Bikes, as they are currently sold, lack all the subtle (and not-so-subtle) features that new users who are wanting to instantly make their bike their primary mode of transportation will want; features like easy locking, built-in LED lighting, stylish and lightweight baskets, and chains that don’t eat your pants. These are all features that are immediately obvious to people who don’t bike regularly, or who have just started biking on a more frequent basis.

I’m certain that bicycle manufacturers will find any number of reasons to throw up resistance for these ideas, and deny that making such features standard is a good idea. This will make the bike heavy, they will say. It will make the bike less customizable. It will make the bike most costly.

Yes, these are all fine old-school reasons to not do something, argued from the standpoint of people who are so integrated into the semi-elitist, extreme-sports culture of hardcore biking that they fail to see the need for this evolution for the mainstream. To them, it’s an “it-ain’t-broke-so-don’t-fix-it” sort of argument; if someone wants a light, why not let them choose what kind to get— if they want one at all— instead of installing a standard one in the bike?

Here’s why.

Think about it from another vantage point; take the computer industry: What kind of computer do people who do not know anything about computers buy? They buy Macs. Why should they buy Macs? They are more expensive, have less software, are less prominent in computing society, and they pretty much force you to buy all your hardware from a single manufacturer whose products cost significantly more than comparable PC products. These facts, on paper, do not sound like things that are going in Apple’s favor at all.

But what Apple does offer is instant usability, assurance that everything is going to work, standardized components, integrated hardware that is compatible with the other pieces of hardware within it, and a single sleek and aesthetically-pleasing package that doesn’t need much modification or adjustment before you can use it.

Windows users are plagued with problems, often having to spend ages with their IT guys getting their network up and running, fooling with network adapter drivers, Windows networking software, and hardware conflicts— while Mac users simply input their IP numbers, and are smooth sailing. Meanwhile, the Windows user is pulling his hair out.

This is an instructive analogy. Think about it. Make it easy for someone to adopt your product. Isn’t that obvious?

People just getting on the bicycle bandwagon don’t want to deal with taking their LEDs on and off every time they get on a bike. They don’t want to deal with their clothes getting ruined by a chain that apparently can’t be made to not destroy clothing. They don’t want to be condemned to carrying everything they brought with them everywhere they go just because the bike has no close-able, lockable basket. They don’t want to deal with their bikes being space hogs in their homes because the handlebars don’t fold. They don’t want to buy dozens of aftermarket components and install them all on a machine they don’t understand, hoping that they got the right ones and that they fit with their type of bicycle and frame size. They don’t want to have a Frankensteined bicycle bearing so many different companies’ products that their bikes look like they were cobbled together from scrap.

They want all that stuff taken care of beforehand because they don’t want to think about that! They just want to be able to ride with confidence, have all the accessories they may want right there (and have them easy to put on because they were designed specifically for the bike they bought), and they want to get on with their lives. They don’t want to tinker with a machine whose secrets are only privy to the technicians who sold them the bike. They just want to ride!

A smart bicycle manufacturer would recognize this immediately and build a modular, Mac-inspired bike that includes everything that someone who instantly wants the bicycle to be their main form of transport would want, and fixes all the dumb oversights that discourage them from adopting this technology right now. Yes, it will likely raise the price of the bike, but for many people, not wanting to deal with frustrations and being nickeled and dimed on accessories is more valuable than having a cheaper bike.

A bike like this could easy generate a great deal of brand cachet, high sales, and could earn a company an army of lifelong customers and bicycle enthusiasts. Seems like a great investment to me. So what’s the problem?

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Status Quo, Bicycles, and Innovation in Products that Matter!

Posted 2008-06-10 06:29 in business, business models, economics, environment, experiences, improvements, marketing, sustainability, transportation


UPDATE: I’ve continued my thoughts on the need for change in the bicycle industry in this post. You might want to read that one first before coming back to this one.

Status quo is there for a reason. People don’t like to change what they’re doing, and will find self-justifications for why they shouldn’t. This is true in many contexts; many of us have witnessed this in interactions at work, politics, and other social spheres. If someone is being forced by outside conditions to make a change in their consumption behavior or to purchase items that they weren’t planning on buying, they typically aren’t happy about it, and will find reasons to avoid doing it. That’s why companies that make high-involvement consumer products should really be proactive about finding ways to understand and address the dissatisfactions that consumers have about their products so that they can convert hesitating customers into excited, eager customers.

Case in point: bicycles.

I was picking up my treasured Cannondale bicycle from Revolution Bike and Bean, a cool bike repair shop in Bloomington, Indiana, and was talking with the owners about bike sales. Brad, the owner, was commenting that sales had risen considerably over the past year. I remarked that they would probably be even better if bike manufacturers had spent more time examining how people who don’t regularly ride bikes respond to them when they first get on, and understand why many people who bought them stopped using them.

Transportation in general can be viewed as a series of substitutes. If you don’t use one type of transit, you’ll use another. If you want people to choose your method of transit, you have to pose the argument in the form of benefits. Frankly, bicycle manufacturers have not been very effective at making their argument. They rely on the status quo, rarely if ever offering consumers new reasons to get on a bike. Ninety-nine percent of the effort bicycle companies make in bicycle improvements are incremental in nature and relate largely to shaving a few grams off the weight of the bike, and other such minor modifications that only bike nuts are likely to care about. The mainstream public— the largest piece of the bicycle pie, oddly— is left completely unspoken for.

I log a hell of a lot of hours on my bike, and even I have a huge list of complaints about bikes that are in need of being addressed. These aren’t things that will affect whether or not I actually use my bike —but this is only because I have already adopted it as my primary form of transportation. There are many people out there who currently drive, but who might like to adopt bicycles as their primary form of transport; unfortunately, most of those people never will. The reason they won’t is because they have their own status quo they are trying to maintain. They’ve always driven to work, so they always will. At least until someone offers a good reason why they shouldn’t.

But bike manufacturers don’t offer good reasons to switch that demonstrate new approaches to the biking paradigm. If you wanted to switch, you could have switched 10 or 20 years ago. There’s hardly any new reasons to switch. In almost every other industry, there are always new reasons to switch: think about improvements to cars, computers, televisions, appliances, anything! Those industries take constant efforts to make value propositions. But short of augmenting the available structural materials with things like carbon fiber, the bicycle industry has not made any significant leaps in decades. Now you might be wondering what kind of improvements I’m talking about.

Before I get into that, it’s important to understand something. Every time you make it hard for someone to do something, they are less likely to do it in the future. Repeat: Every time you make it hard for someone to do something, they are less likely to do it in the future. For those who haven’t adopted bikes as their primary mode or ever a regular mode of transport, everything that is annoying about bicycles is one more reason to not ride one. These may not even be major issues; they can just be small irritants. But small irritants add up. Think about these issues, for example, which constantly annoy me:

These are just some examples. They are not major things, but add them together and you have some serious irritants. Every time someone has a problem with their bike that involves one of these issues, it creates a negative perception of their bike and will drive them just a little further away from using it again. Eventually, people will feel so annoyed just thinking about the bike that they won’t even bother getting on. How hard are any of these to solve? I think they’re all solvable, and can be solved in a very simple manner. The question is why companies are not solving these issues, and spending so much time on stuff that only a tiny fraction of the potential market could possibly care about. Perhaps being gearheads make them lose sense of the big picture; or worse, maybe they are so entrenched in the way they’ve always done things that they resist any changes that might cause them to question the existing paradigm. It might even be that they don’t want to make changes that would make bicycle culture less technical and elite.

Yet, below I have written simple solutions to some these problems that could be easily implemented. Unfortunately, they are not the kind of ideas that gearheads would probably like, maybe because they seem too low-level and pedestrian; these are the kinds of changes that a non-biking scumbag might care about. Eww. But that’s where the room for growth is. If you’re trying to promote mass culture in the form of bicycles (and bike companies should be interested in this), they should be thinking about the issues that normal people might care about:

Bicycles are one of the most efficient forms of transport given the energy crisis and the increasing instances of obesity in our society, it is important for us as a society to encourage the use of bicycles. To do so we must address the reasons why people do not use them, and encourage bicycle manufacturers to address these issues in their next generation vehicles. It’s in their own best interest after all.

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Crises are Opportunities for Change

Posted 2008-05-27 14:52 in business, economics, environment, experiences, politics, sustainability, transportation


Crises are essential to progress. They are one of the most effective catalysts of change, and you can count on crises to lay the death blow to our most enduring issues of status quo. They provide convenient— yet paradoxically inconvenient— turning points in history, and allow us to contemplate the options on how to adjust ourselves to prepare for the future.

Currently, as fuel prices skyrocket, we have a populace that is becoming increasingly angry about the situation, and demanding of politicians to solve the problem. Of course, for most people, solving the problem is just another way of saying “reducing the price.” And unfortunately, many of those most affected are inclined to use this opportunity not to seriously consider their own fuel consumption patterns, their excessive driving habits, or their choice of vehicle, but instead to point blame at politicians, oil companies, and lobbyists who may be in some way responsible for the rise in fuel costs.

However, perhaps there has been a sort of tipping point in the social consciousness where the public has in some roundabout way, acknowledged that oil procurement is going to be a continuing problem for our economy, and any reductions in gas costs are only going to be temporary respites punctuated by large spans in which high costs are the rule rather than the exception. However, despite this somewhat subconscious admission, it appears that most people are not all that excited about the opportunity to alter their consumption patterns, and would be happy to return to their daily lives without having to “endure” any macro-economic change that might force a shift in their consumption behavior in the future. This is disappointing, but not all that surprising, as there is a heavy resistance to change in almost every social scenario. Tragically, the status quo tends to thrive out of inertia even when it no longer makes any sense, for reasons that are hard to explain.

But let’s think about this harder, and see how we might be able to manage the crisis for the best long-term solution.

Oil is a limited resource, but the world’s apparent appetite for oil is virtually unlimited. As such, prices for fuel are only going to increase in the long run. However, we are witnessing motorists using their gas-powered vehicles less in the recent past as prices have increased, suggesting that oil demand is somewhat elastic in the non-commercial sector. I believe that this is a good sign, as it suggests that people are willing to make some personal adjustments, but on the down side, this is only the result of short-term economic self-interest; it has nothing to do with long-term energy strategy, the encouragement of sound energy policy, or attempts to reduce the impacts of pollution.

I would posit that reducing fuel consumption is one the greatest necessities of our era, for any number of political, environmental, humanitarian, and economic reasons. Aside from those who seek to profit directly from the sale of oil, I don’t think anyone has a particular fondness for oil that goes beyond its utility value. For that reason, along with the immeasurable societal baggage that comes with oil usage, it seems a wise investment of resources to redirect energy policy towards other forms of energy.

However, it can be argued that any other energy source has its ups and downs, and it is entirely possible that alternative energies like solar, wind, and geothermal could bring about their own crippling problems once developed to the scale that humanity requires for daily consumption.

Given this, clearly, one of the most obvious solutions to the problem is to decrease consumption. This is a lofty and well-placed goal for many reasons, but some might argue that the economic costs of this could be high. Maybe, maybe not. I tend to think that economic conditions, like many macro-scale phenomena, have a way of attaining an equilibrium state even if there are temporary hardships involved.

The fuel crisis is presenting us with a choice:

Do we want to continue using a resource whose quantity is rapidly dwindling, whose cost is rising dramatically, and which poses any number of environmental challenges? Or do we want to use this opportunity to reduce our consumption of this resource and invest money, resources, and policy into promoting new sources of energy that are sustainable, scalable, and environmentally sound— especially knowing that consumers are driven by short-term economic interests, and aren’t typically willing to alter their consumption patterns unless forced to by outside conditions?

As posed above, the latter is clearly the superior choice. We won’t get into the complexities involved in choosing that choice and the compromises involved in it, but let’s suppose we are in fact interested in long-term energy strategy. How can we leverage the fact that short-term economic self-interest is the primary driver of purchasing behavior?

One of the most obvious answers to discouraging unwanted behavior comes in the form of taxes. Increase taxation on oil, reduce it on alternative fuels, give tax breaks for buying bicycles, etc. In other words, simply make the undesirable action the more costly one to choose. The trouble comes when we try to balance the interests of society as a whole with economic interests of a few companies that happen to be critical linchpins in the economy.

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Taxation and Economic Incentivization

Posted 2008-05-09 12:43 in business, consumerism, economics, environment, finance, marketing, politics, sustainability, transportation


Back in March, I took a trip to a developing country in Latin America for a project I was working on. As it would turn out, my expenses were fully paid by the institution I was operating under. Very quickly, I noticed something different about the way I was ordering meals at restaurants; I was getting dessert.

I never order dessert at meals.

Then it hit me. The reason I never order dessert is because dessert tacks on an additional $5-$7 onto the bill. It has nothing to do with the fact that dessert is bad for my health and is chock full of empty calories. Sadly, I’d probably order it every time I eat out if someone else was flipping the bill.

Behavioral economists have long realized that one of the greatest drivers of human consumption behavior is economic interest— money. Make it expensive to do something and it discourages the behavior. Behold the so-called ‘sin tax,’ which makes smoking cigarettes slightly more unappealing through an increased price (though apparently the price elasticity of cigarettes is virtually nil).

For her presidential candidacy, Hillary Clinton is proposing a gas tax holiday. Let’s think about the logic here in the context of economic incentive:

1) America relies on gasoline for operation.
2) America’s gasoline prices are going up.
3) A high gasoline tax discourages people from using gas unnecessarily; therefore the opposite, removing the tax, encourages more liberal use of gasoline on a macro scale.
4) Higher use of gasoline ensures higher prices in the future given the reality that gasoline is a limited resource, and increasing reliance on other countries for oil.

This strategy makes no sense. Our country should be doing everything in its power to discourage unnecessary gasoline usage. The government should be providing tax incentives for companies to use renewable energy, and should be making it easier for renewable energy companies to form and grow. Instead, the government is doing the exact opposite, which is not only a terrible long-term strategy for energy policy, but ensures a grim future for the people of the United States in many ways.

Many, if not most, of the world’s current problems come from a single source: consumption. High levels of consumerism and consumption behavior have driven many of the issues that plague the world. Reduce the occurences of this, and we start to address problems like pollution, deforestation, wars (for natural resources), energy shortages, water shortages, and the like in a meaningful way.

Federal Taxation

My own ideal form of taxation would come in the form of a VAT tax instead of the standard income tax that we have in the United States. Many in the US argue over the respective merits of progressive, regressive, and flat-taxes, but if you ask me, the VAT is the most sensible. Basically, my idea is that you don’t pay automatic income taxes to the government; instead, you pay 20-50% on everything you buy (something that everyone in the supply chain has to do— meaning that a single item gets taxed multiple times).

If it were up to me, the percentage of the VAT tax would depend on the nature of the item in question. The amount of tax levied should depend on external costs that society has to bear by the fact that this item is out there in the world. If manufacturing the product has led to environmental destruction in some way, tax it higher. Products made of plastic or which contain lots wood should be taxed high. Products that don’t biodegrade or which need special processing to re-enter the waste stream should be taxed high. Products that damage our water supply and pollute the air should be taxed high. On the other hand, items that can safely be returned to the earth to decompose should be taxed low. Unprocessed foodstuffs should be taxed low. Bicycles should be taxed low (while they use up resources in manufacturing, they encourage more prudent use of other more damaging resources).

A hypothetical scenario: say you buy a $100 stereo. By the time you check out, you’re in the $120 range. Maybe even higher, like $140 or $150. That’s considerably higher than the state sales tax you’ll pay in the United States. You’ll question whether you really need that stereo. You’ll be forced to think about the environmental and external impact of your purchasing behavior. True, you’ll have to fork over much more once you buy stuff, but you’ll have extra money in your pocket from not paying income tax.

I like this idea for a variety of reasons, but primarily because it ensures that those who consume the most also bear the external costs— a cost that is often left to society as a whole to bear. If proposed on a large scale, my guess is that many people would complain for the following reasons:

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