Detroit’s Mobility Innovation Initiative

The Future of Cities series This case study is part of our The Future of Cities series. We have produced a handbook, in collaboration with the Boston Consulting Group and the Center for Urban Innovation at The Aspen Institute, to explore how city problem-solvers are using innovation to achieve greater public impact. Our handbook surfaces trends in city innovation, and extracts lessons from conversations with city leaders all over the US on how cities can innovate with intention to address the biggest challenges and create more livable, equitable, and resilient cities.

Detroit’s public transport infrastructure has seen a steady decline since the 1950s, leaving the city with severe mobility issues. The metropolitan area of Detroit is spread over several counties, and jobs in the area have tended to be dispersed across the city over a wide area. High rates of poverty and unemployment and lower than average rates of car ownership meant that the region’s ineffective mobility infrastructure significantly impacted many Detroit residents. This restricted their ability to access these widely distributed employment opportunities, as well as public amenities and services. As a result, Detroit’s workforce was underutilised and economic growth suffered.

The Detroit Mobility Innovation Initiative, led by the Boston Consulting Group (BCG), aimed to tackle Detroit’s key mobility issues by creating public-private partnerships (PPPs) to pilot innovative solutions. Pilots developed and launched under the Initiative have already proved successful enough for projects to be scaled up by private partners. Detroit has also extended the Initiative’s approach and launched many more pilots that are focused on mobility.

The challenge

Detroit’s public transport system achieves consistently poor ratings, and the issue is exacerbated by high rates of poverty, proportionately low rates of car ownership, and long commutes to work. Over-reliance on less environmentally friendly transport in the city has also contributed to Detroit’s high levels of harmful particle emissions.

In the early 20th century, Detroit was the heart of the global automobile industry. This booming, specialist industry in “Motor City” included Ford’s factories, Oldsmobile’s nearby factories, and the car-part manufacturers that gave rise to Cadillac, Lincoln, Buick and Dodge.[1]

The Motor City title still holds true today, with Detroit’s “notoriety for being difficult to get around without a car” and its public transport being consistently ranked among the worst in the US.[2] Just 3 percent of the almost 4.5 million population across the Detroit–Ann Arbor–Windsor area regularly use public transport, with only 4 percent regularly making journeys on foot and a mere 1 percent cycling. Public transport affordability and versatility are both ranked at 2 out of 5, i.e. no more than “aspiring”, in Deloitte’s global City Mobility Index.[3]

Michelle Andersen of BCG, who is also a Detroit resident, sums up the problem: “Detroit has less in the way of transit infrastructure than most cities. There was a robust system of buses and rail up until 1950. But with the proliferation of cars and the rise of the major automotive companies after World War Two, public transport fell into disarray. Today, the Motor City has no trains or subways, and the bus system is inadequate. Consequently, people with lower incomes lack a reliable and affordable means of transportation, and people in the suburbs can’t get into town without taking their own car.”[4]

Transport affordability in Detroit is a significant issue, with 39.3 percent of households living below the poverty line and only 53 percent of Detroiters aged 18-64 having worked at all in 2015.[5] Car ownership rates are low at 74.8 percent, compared with a national average for midsized cities of 90.8 percent, due in part to the high cost of car insurance in Detroit.[3][5]

The consequences of these mobility infrastructure issues have direct ramifications for Detroit residents’ quality of life, economic opportunities, health, and environmental footprint. “Mobility can limit residents’ access to jobs, healthcare, education, and civic activities.”[6] Almost 75 percent of workers in Detroit live in suburban areas that are underserved by public transport.[3] In 2016, the US Department of Transportation found that:

  • 115,000 Detroiters commute out of the city for work, compared with 65,000 who live and work in the city
  • Only 22 percent of the region’s jobs are accessible within a 90-minute, fixed-route commute.[5]

The Detroit–Ann Arbor region was ranked the 14th worst region in the US (out of 187) for annual particle pollution in 2017, and there are only 1,000 public electric vehicle (EV) charging stations in the whole state of Michigan (where there are approximately 14,000 EVs).[3][7] Increasing the use of public transport, cycling and EVs in mobility infrastructures instead of private, petrol-fuelled cars could help to reduce local particle pollution significantly.

Despite the serious consequences of Detroit’s mobility problems, the biggest hurdle to improving any mass transport system lies in finding and securing the funding to support proposed improvement plans.[8] A city's mobility is a complex puzzle made up of many very different elements. There is no one-size-fits-all method to improve mobility for all residents, visitors and businesses. The challenge facing Detroit is how to improve mobility for all, while ensuring those solutions are cost-effective and environmentally conscious.

The initiative

The Initiative creates PPPs that can rapidly develop and deploy pilot projects to address Detroit’s mobility challenges, while also being financially profitable and sustainable for the city’s private partners.

In November 2016, the mayor of Detroit, Mike Duggan, founded the Office of Mobility Innovation and tasked this new branch of city government with bringing new mobility services and technologies to Detroit residents. Mark de la Vergne was appointed as the department’s Chief of Mobility. One of the Office of Mobility Innovation’s key efforts towards achieving its goals is the Detroit Mobility Innovation Initiative, which was launched in May 2018.[2][9][10]

Fundamentally, the Initiative is a PPP that brings together ten public and private entities to tackle four of the key issues facing Detroit's transport infrastructure by designing and implementing innovative pilot solutions. The Initiative was born after BCG approached de la Vergne with potential mobility ideas and then spearheaded the process by recruiting the partners and structuring the Initiative’s approach.[6][7] The four key mobility issues the Initiative identified for Detroit were: neighbourhood mobility, downtown accessibility, traffic safety, and EV education and use (see Clear Objectives below for further detail).[6][9][11]

Mark de la Vergne explained that the goal of the Initiative is to address Detroit’s transport pain-points while building a sustainable model for private sector engagement.[7] The underlying ethos of the Initiative partners is that for Detroit to be thriving commercially, the community has to be thriving, too – and effective transport is a big step towards that end.[7]

At the heart of the initiative is the PPP between the stakeholders. This dynamic partnership is able to generate pilot mobility solutions quickly and effectively in order to tackle the four key mobility issues.[6] The public sector gains private sector expertise, knowledge and experience as well as evaluations of financial sustainability for the various new projects. The private sector benefits from less red tape, new insights into public challenges, and the opportunity to test new ideas and revenue streams by exploring innovative technologies and services.[7][12]

As Michelle Andersen explains: “cities can address their transit issues... startups can get the opportunity to pilot their innovative ideas, and corporations can help create a better working environment that will attract talent.”[4]

The public impact

The Initiative’s model offers public insight and reduced red tape to private sectors companies deploying mobility pilots, and increases the city’s ability to influence public transport policy and solutions without significant expenditure or regulatory change.

While it is too early to assess the full impact of the Initiative, some of the pilots created under its auspices have already shown promising results. De la Vergne has announced, for instance, that the pilot programme for car-sharing in Detroit, which involved General Motors (GM), will be expanding through 2019.[13]

This PPP model “creates a roadmap other cities can use in building meaningful coalitions of companies and public agencies whose respective skills, capabilities, and resources make it possible to move speedily from innovation to impact”.[6] In some US cities, for example, bike-sharing mobility projects have taken years to put in place. This contrasts with the innovative mobility ideas and solutions that the Initiative has taken from drawing board to implementation in just six months.[6]

Since the Initiative’s introduction, Detroit has continued to engage private companies in PPPs to pilot innovative mobility solutions. In 2018, the Detroit Department of Transportation entered into a PPP with Lyft to pilot a “Night Shift” project, designed to address the “first mile/last mile” problem for nightshift workers. “Funded by the New Economy Initiative, users can get USD7 credited toward a ride through the Lyft app between the hours of 11 pm and 5 am as long as they’re arriving or leaving from somewhere in Detroit outside of the greater downtown area.”[14]

However, it is too early to assess the full public impact of the Initiative. And there is a risk that PPPs generally may result in a risk of unequal access to services and a loss of public sector data, as has been the case with other models in the US.

Ian Savage, a transportation economist at Northwestern University in Evanston, IL, has highlighted a key problem that needs to be solved when the public and private sectors collaborate. Private transport companies have no good business reason to provide service along routes that will lose money. Private mobility services naturally siphon off revenue generation from public ones, and ultimately challenge the Detroit city government’s ability to subsidise any less profitable – or unprofitable – transport routes. As of July 2017, it was also reported that no private transport service in the US provided local government with point-to-point information about their passengers’ rides. Without such data, transport policy in Detroit could not be optimised to serve residents.[15]

For private companies to be an equal partner in shaping this future, there must be a prospect of profit [16]. Too much regulation, and the private sector may find it difficult to innovate or participate; too little regulation, and the public interest is not served.[17] PPPs, such as those from the Initiative, can be key to achieving this crucial balance.

Written by Glynn Sullings

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Good

The gathering of public opinion and testimony from people from all walks of life in Detroit was fundamental to the Initiative’s process of identifying mobility pain-points and developing pilots.

The public in general, and commuters in particular, were consulted to help determine the Initiative’s key objectives. The team conducted “deep dive research”, rather than traditional public, town hall meetings often seen in public projects.[9] As de la Vergne said, “mobility solutions must be developed for the people who will be using them”.[11][12] He emphasised that fundamental to the Initiative was talking to a lot of people to help them “really understand their experiences, and then when you build the pilot, it’s just thinking through each individual step and how that’s going to work for different folks”.[18] A wide range of residents were consulted, “from a senior resident who doesn't work, who just has a challenge getting to the grocery store, to a single mom who has to drop off her kids and then get to her job in the suburbs”.[9] Over 100 hours of interviews were carried out with Detroit residents.[7]

Mayor Duggan has also stressed the importance of public opinion and residents’ needs to the Office of Mobility Innovation and the Initiative. As de la Vergne said of the mayor: “when we say, ‘here's a new idea,’ he's going to pick at it from everything he's heard from the community as well to make sure that we're thinking of every single angle. While it is a pilot and something for us to learn from, we want to make sure it’s accessible for all Detroiters.”[18]

In 2016, Detroit’s citizens voted against using taxation increases to fund public mobility infrastructure improvements. The Michigan Regional Transit Authority had proposed a USD4.6 billion plan to connect the four-county region of Detroit by funding new bus routes, an express service to Detroit Metro Airport, and commuter rail and improvements to local bus, “paratransit”, and other mobility options. The plan was to be funded by a property tax increase of USD120 on every USD100,000 of assessed value for a period of 20 years, costing homeowners about USD95 per year on average. The plan was narrowly defeated in the polls in November 2016 by a margin of 1 percent.[19][20][21] In 2018, the Michigan Regional Transit Authority board rejected a similar proposal.[22] Therefore, tackling Detroit’s mobility issues through the use of PPPs avoids an unpopular increase in taxation.

Stakeholder Engagement Strong

Relevant stakeholders have been well engaged throughout the planning, design, implementation, and management of the pilot projects under the Initiative. An Innovation Sprint drew on the experience of the partners, as well as interviews with the public, commuters, and mobility experts.[6]

The Initiative began with BCG leading a 12-week “Innovation Sprint”, whereby the partners brainstormed more than 120 ideas for tackling Detroit’s mobility challenges. They then filtered these ideas down to just 6 ideas that could be implemented as pilots over a 12-month period.[6] The private and public partners had complete control over choosing, developing and implementing pilots under the Initiative.

The key stakeholders engaged as partners in the Initiative included a number of public and third sector stakeholders: the Office of Mobility Innovation, representing Detroit city’s local government; the Michigan Economic Development Corp., a PPP agency; and two philanthropic partners – the New Economic Initiative and Quicken Loans Community Investment Fund. There were also several private sector stakeholders, including GM, Lear Corporation, DTE Energy, Bedrock Detroit – one of Detroit’s largest employers and real estate developers – and BCG Digital Ventures.[7]

Political Commitment Strong

Mobility problems have figured prominently at all levels of government in the Detroit area. The city, state and federal governments all support the Initiative’s strategy of public-private mobility solutions.

In December 2015, the US Department of Transportation chose Detroit as a finalist for its Smart City Challenge. This provided federal funding to help the city to partner with private companies to provide “equitable access to affordable and time-efficient mobility solutions”. It was within this remit that Mayor Duggan formed the Office of Mobility Innovation. Its aim was to help focus Detroit’s efforts to meet its mobility challenges by “partnering with industry leaders to add smart technologies, specialised vehicles and new business models to provide equitable solutions that improve safety, mobility and environment in Detroit”.[5]

All levels of government have adopted the same primary approach in addressing these mobility challenges – grounding the solution in innovation. This approach is reflected by Detroit being ranked at 5 out of 5 for innovation, i.e. a “global leader”, in Deloitte’s global City Mobility Index. The innovation factor analyses how determined and forward-thinking a city’s leaders are, by considering factors such as:

  • The existence of open data or APIs for transport
  • The city’s future mobility strategy
  • EV adoption
  • The use of smart, mobility-focused startups, accelerators, and venture capital firms.[3]

Policy

Clear Objectives Good

The Initiative’s partners set out clear, qualitative objectives for the Initiative, as well as the pilots’ content and how they planned to address key mobility issues. The partners did not, however, publish quantitatively measurable parameters for those objectives.

From its inception, the team identified four key issues (see also The Initiative above):

  1. Neighbourhood Mobility – enabling people in suburban areas to use public transport to travel to work cost-effectively.
  2. Downtown Accessibility – enabling all people in Detroit to access the burgeoning downtown area for work or events, by improving traffic conditions and parking.
  3. Traffic Safety – building a technology infrastructure that reduces the number of traffic fatalities for pedestrians, cyclists and drivers.
  4. EV Utilisation and Education – optimising the use of EV infrastructure and educating Detroit residents and visitors about EV technologies.[6][9][11]

The Initiative partners proposed over 120 innovative ideas and solutions to help address those 4 key issues. From these, 6 pilots were chosen and their objectives were clearly stated:

  1. Revolutionary Car-Sharing Programme – using cameras and sensors to assess specific driver behaviour. Encouraging responsible driving by reducing membership costs for good drivers. Also expanding on-demand car-sharing programmes from downtown and midtown to cover suburban areas.
  2. Dynamically Routed Transport – selects routes for shuttles and buses based on real-time demand for rides.
  3. Fundamental Traffic Management System – gives priority to public transport. For instance, traffic lights that remain green to allow public transport to reach its stop, thereby enabling passengers to board or alight while the light is red, making for a more efficient system.[9]
  4. Comprehensive Parking Platform – smarter parking app for downtown. Dynamic pricing, helping to alleviate congestion by providing perks and cheaper parking away from the city centre.
  5. Futuristic Public Space – collaboration with a private energy company to provide public, fast-charging stations for EVs. The stations are to be located in a revamped area in the city centre, which provides amenities for drivers who are waiting for their EV to finish charging.
  6. Central Traffic Intelligence – a centralised data management system collecting “big data” in real time from infrastructure, vehicles and mobile devices to help develop future mobility concepts (e.g. locating potholes or identifying areas where people drive too fast).[6][7][9][11]

Evidence Strong

There were clear indications that the pilots were chosen based on existing evidence from mobility projects elsewhere. Office of Mobility Innovation and partners examined Detroit-specific data and existing mobility solutions in other cities when designing their solutions and pilots.

In designing the Initiative’s pilot programmes, de la Vergne made it clear that evidence from other cities was factored in. Discussing e-scooters, one of the ideas from Innovation Sprint that was not chosen as one of the initial 6 pilots, he said: “we're going to be spending this summer looking through how other cities are dealing with [e-scooters], so that one day we can incorporate that into Detroit.”[9]

At the Initiative’s core is the development of innovative pilot programmes to provide evidence of feasibility, sustainability and effectiveness for future mobility projects. The 6 pilots have been confined to selected areas of Detroit and to certain bus routes. Over the 12-month period of their implementation, the viability and effectiveness of the service has been assessed in the context of scaling up and rolling out across the whole of Detroit.[6] DTE Energy’s pilot programme to provide public, fast-charging stations for EVs, for example, has been planned in a single location so that evidence can be gathered and assessed for further implementation.[9]

Feasibility Strong

A robust assessment of feasibility is at the heart of the Initiative and its pilot projects, with clear criteria for that assessment. It is crucial to the feasibility of the pilots that the funding came from the private partners.

When filtering down the ideas in the Innovation Sprint, the partners were specifically aiming to choose 6 pilot projects that could realistically be implemented within a 12-month period. To do so, they assessed the ideas against the following criteria:

  1. Desirability – does the concept solve a clear, compelling mobility pain-point for Detroit’s residents and employees?
  2. Viability – could the project sustain itself financially over the long term?
  3. Feasibility – is the concept achievable with today’s technology, and can it be implemented within 12 months?[6]

One of the biggest obstacles to public infrastructure improvements is funding, and this holds true for Detroit’s mobility challenges. According to Megan Owens, the executive director of the Michigan-based advocacy group, Transport Riders United, “Southeast Michigan spends about ⅓ of what other major regions spend on public transit… the single biggest issue (in Detroit) is funding.”[8]

One advantage of the Initiative is that funding for the pilots has been provided by the partners, rather than government budgets, with each costing between an estimated USD200,000-USD600,000.[7]

Detroit’s city government has also helped to make the Initiative more feasible. While the startups and larger companies provide the financial, technological and innovation resources, Detroit for its part has committed to removing roadblocks to ensure that pilots can launch quickly. This includes making the necessary changes to the city’s infrastructure, assisting with city approvals, encouraging community adoption, and monitoring progress. [4]

Action

Management Fair

The Initiative has no overall management structure, being a collaboration of partners organised and led by BCG. Each individual pilot has been designed, managed and funded by the partners directly involved. “The Initiative’s board has continued to be engaged and is being used to guide the pilots to launch.”[6]

Each of the partners is engaged in a different capacity in one or more of the pilots, in line with their strengths and resources. GM was focused on car-sharing, DTE Energy on installing new EV charging stations and providing educational programming about EVs. Bedrock Detroit focused on the dynamic-pricing app for parking, which provided incentives at shops and restaurants for drivers willing to park further from the city centre. This provided a suitable test bed because “the city and Bedrock control around 50 percent of the public parking in Detroit's Central Business District”.[7]

Measurement Strong

The Office of Mobility Innovation and its private sector partners have regularly measured the pilot programmes against the Initiative’s objectives, as well as examining the possibility of expanding the pilots into larger, self-sustaining and profitable projects.

Speaking about analysing the effectiveness of mobility pilots in Detroit, de la Vergne described their two-step approach: “One is building a good problem statement beforehand so that you're very clear on what you're trying to learn from a pilot. Then two is making sure you're doing the work to really understand how [and if] people are using the service.”[18]

The Office of Mobility Innovation tries to understand the mobility pilots from the customer’s perspective by canvassing customers’ responses to the following questions:

  1. How many people have used the pilot service?
  2. How have those people used the pilot service?
  3. How is the service helping people?
  4. What can they do to make the service better in future?[18]

Alignment Good

The partners engaged in the Initiative share a common interest in understanding the feasibility issues when it comes to rolling the pilots out as scaled-up, self-sustaining projects.

The Initiative is fundamentally a collaboration between public agencies, private companies, and philanthropic organisations. These actors were selected carefully to contribute “specific and complementary expertise covering the full mobility ecosystem”.[6]

Key to the success of the collaboration is the actors being able to see clear benefits both from their participation and the success of the project as a whole. For private companies, this included the opportunity to boost their own local business and access untapped local talent. For public agencies, participation offered a chance to help citizens access better jobs, healthcare services, and educational opportunities, and to reduce congestion.[6]

De la Vergne explained that the Office of Mobility Innovation specifically chose “partners in the private sectors that [were] eager to learn with us”, and that “we’re starting small on [the pilots] both to do the learning and to say to the partner that we’re going to have to build a level of trust and start small to build that relationship”.[18]