Dive Brief:

• Transit technology company Cubic Corporation announced a loyalty and advertising platform that it says can help transit agencies address negative ridership and revenue trends by incentivizing more active users. 
• Cubic Interactive will allow customers to earn loyalty points, either by riding or by engaging with ads, that can be exchanged for transit value or third-party offers, similar to airline miles. 
• Additionally, the program will allow agencies to partner with third-party brands as an additional source of revenue. Cough drop and breath mint company Ricola is the first brand to partner with Cubic Interactive.

Dive Insight:

Transit ridership has been declining nationally, with the American Public Transportation Association (APTA) reporting a 2% drop from 2017 to 2018, and a recent KPMG report detailing a 5% ridership drop over the past decade. That’s led many transit agencies to rethink how they're reaching customers, with some bundling other mobility options into a single app or finding new ticketing and payment options.

Cubic Interactive — a platform that can be installed onto any existing transit app — is designed as another incentive to consider, said senior product director Robert Sprogis. The project is targeted both at regular users who could rack up rewards as part of their daily commutes, as well as people who may need a nudge to ride a train or bus.

"People plan their trips based on convenience and price, and public transportation, nine times out of 10, is going to struggle on the convenience side because of where stops are and the schedule," Sprogis said. "But the value side, that’s where I hope we can swing some users who are deciding how to plan their trip."

Cubic Transportation Systems, the business division to oversee Cubic Interactive, has partnered with major transit agencies in cities like Los Angeles, Chicago and New York, where it has worked with the New York Metropolitan Transportation Authority on a contactless fare payment system.

It remains to be seen whether the incentive program can draw in new customers for what could be a relatively small reward, such as a free transit trip. Some customers may not want to engage with ads, although Sprogis pointed out that there are already ads on many vehicles and stations, and the down time inherent in transit will give users an opportunity to engage and build up rewards.

Ultimately, Sprogis said there will be significant growth opportunity, which should help transit services build up new riders and a new stream of revenue.

"Where we start is by no means where we end," Sprogis said. "As we bring in additional third parties, we intend this as a platform that will help users make a decision to use transit. We plan on making this incentive program as rich as we possibly can."