To the too-long list of recession casualties we can now add public transit. Despite strong, consistent ridership (nearly 2.6 billion trips were taken nationwide on public transportation in the first quarter of 2009), local, regional and state funding slowdowns or cuts are forcing most transit systems across the country to raise fares or reduce service--sometimes both--according to the American Public Transportation Association.
This situation is clearly less than ideal for elected officials, terrible for a city's environmental footprint, and worst of all for the everyday straphanger or bus rider who is already struggling to make ends meet.
Transit executives agree that something must be done--and soon--if transit systems are to continue to serve citizens effectively and affordably. A recent federal stimulus bill provides transit authorities with $8.4 billion in monies for capital improvements, but only 10 percent of the funds can be used for operations. The reduction in ridership that may result from the inevitable increased fares also could damage a city's effort to go "green," even as America works to cut greenhouse gases and reduce its reliance on foreign oil.
But an announcement by New York's Metropolitan Transit Authority in late June presents a timely idea for helping beleaguered transit systems weather the storm: the generation of incremental revenues through corporate naming rights for rail stations or other transit assets.
In a $4 million deal, Barclays, the London bank, will add its name to the nexus of subway stops at Atlantic Avenue, Pacific Street and Flatbush Avenue in Brooklyn. The sponsorship directly coincides with the company's title sponsorship of Barclays Center, the neighborhood's new New Jersey Nets basketball arena scheduled to open in 2011.
Selling naming rights is an accepted route that developers take to raise money, and consumers are used to seeing company names on sports stadiums, concert venues, theaters and university buildings. Yet some skeptics may immediately criticize the idea of naming transit assets as adding unwanted advertising or corporate presence to our lives. Others may point to Boston, which a few years ago attempted without success to auction off four historic stations; or to Citigroup, which declined to rename the subway stop at CitiField, the new Mets stadium in Queens.
My response to nay-sayers: that was then, and the stakes are much higher now for transit authority budgets. Let's consider why company naming of transit assets could be one of those rare win-win-win moments for consumers, government and businesses alike.
In the case of a named subway station or even a named subway line, consumers would receive the most benefit in the form of more stable fares, and depending on the level of sponsorship, safer subway platforms, refreshed surroundings or improved services (for example, a broadband carrier might install free Wi-Fi areas).
If fares remain reasonable and the trains run on time, most people would likely welcome such a responsible sponsorship that helps their tax dollars go further--and helps keeps their tax bills from rising.
For businesses, naming transit assets could potentially buy a lot of good will, and be linked to social responsibility initiatives. Consumers are looking for more public-private partnerships to help solve the nation's economic ills. In a step up from simply advertising in a subway station or on the side of a bus, a company's support could help an entire system run more efficiently and affordably.
A naming agreement that spans several years or a decade would provide a brand with a long-term presence and help it stand out from the pack. In a higher step up, a company could partner with a charity to name the station, providing exposure for the charity--and a double public service.
Successful transit naming efforts have included sponsorship by Sprint Nextel of a monorail station in Las Vegas (recently ended) and support by Tampa Electric Company, a local utility, of streetcars in Tampa, Florida. Airports in Cleveland, Boston, Chicago and other cities have raised up to several million dollars by selling naming rights to parking garages, terminals, and concourses. In Dubai, IMG has been the exclusive strategy, marketing and sales agent for the city's new mass rail system in an effort to package and commercialize sponsorship or corporate support, through a holistic approach including naming rights opportunities for stations; to date, we have helped the RTA (Roads and Transport Authority belonging to the Government of Dubai) to raise $250 million from 10 corporations despite the struggling economy.
Certainly naming a subway or rail station--a place through which thousands of people can travel every day--should be done with care and sensitivity. Names need to follow any established transit guidelines and should not confuse riders. Not every station name need be up for grabs--stations named for landmarks or places of historical interest should be considered untouchable.
What's in a name? For struggling transit systems, quite a lot. It's time for government and the private sector to team up, develop appropriate naming opportunities for mass transit, and help ensure that Americans get the smooth, efficient, affordable ride they deserve.