Beyond Ridership – Part 2: Innovation & Smart Procurement with Rikesh Shah

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Public transportation leaders are looking for ways to innovate.

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And to improve how they procure products.

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And that's exactly what we talk about today with Rikesh Shah.

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I'm Paul Comfort, and this is Transit Unplugged.

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And Rikesh Shah was the Chief Innovation Officer at the world's

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largest public transportation network, which is Transport for London.

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That's when I first met him many years ago.

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And now he's a consultant and a lecturer at major universities and does some work

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with governments over in Europe and in the UK and I invited him on to continue

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the big conversation that we started last week, where we talked about what

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is public transportation's focus, what should it be here in the US in particular,

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when less than 5% of the people ride public transit, but 84% of most

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people in communities see value in it.

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When Mark Aesch and Alvin McBurrough also talked about the role of

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artificial intelligence and improving public transportation.

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And on this one we continue kind of a big high idea.

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As we talk about innovation, we talk about the role of technology in improving public

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transportation, and in particular in the latter half, we talk in detail about an

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area that Rikesh has much experience in, which is how to improve the procurement

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process from a macro perspective, if you're an executive in an agency.

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I think you'll find this kind of a great, almost like a give and take lecture

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with one of the top minds in innovation, in public transportation in cities.

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My good friend Rikesh Shah from London.

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Great to have you with us today on the podcast.

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Once again, Rikesh, one of our few, two-time guests, man.

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It's wonderful to be here, Paul.

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It's a delight to be here again, and thank

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you for having me.

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As I said in the opening of the show, Rikesh is one of these, globe

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trotting innovation experts that public transportation agencies

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and other groups around the world look to, to help them improve

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operations and efficiencies and data.

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Rikesh, tell us all about your background and how you got

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to where you're at right now.

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Yeah, Paul, I think first it just started on the dinner table many years back.

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My father worked for Transport for London or what was London

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Underground in those days.

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And he served the city for 38 years on the operational side, on the Metro, the Tube.

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And, you know, every day we'd have conversations about his day.

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And how, you know, he was responsible for the station, how he really cared

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about the local community and he really cared about everyone's experiences.

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And that really started to get into my DNA.

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And then I remember at university I studied economics and public policy

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and I remember one of the modules on, on transport around, road congestion

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and infrastructure programs.

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And I really enjoyed writing that essay.

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And then I was also at the same time, very fascinated about cities and I was

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fascinated about new organizations.

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And that took me to about 2001 where I joined Transport for London.

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It was a completely new entity under the first mayor of London at the time was Ken

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Livingston, Mayor Livingston, and at that time we had a few hundred people when

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I joined TFL, it's about 300 people and now it's a 30,000 person organization.

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Oh.

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Oh wow.

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Oh man.

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The growth was incredible.

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Yeah, and at TFL, I worked on a wide range of programs from, in the

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customer directorate about delivering customer value, in the marketing

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team, in the planning team, but also in the communications teams.

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And then more recently, I was in the data and digital team where I set the

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open innovation function, but also been involved with things like open data.

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So it's been an incredible experience, a great learning ground.

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One of the best periods of my life.

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And then more recently I've, now I'm doing three things.

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I think rather than work with one organization, I'm working with

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three different entities now.

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So one is I work on a government funded program on how do you use

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procurement to drive more innovation in the public sector beyond transport.

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, I also do some lecturing.

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. And that's fascinating.

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And, the third area is I also have my own consultancy business where I'm

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advising both cities but also industry players from startups, scale ups, and

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corporates on how do we create better value through public private partnerships.

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You know, we just had on the podcast a few weeks ago, a friend of mine,

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Mark Aesch, who talks about the troubles with transit in America.

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Basically, you know, the average place in America outside of New

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York City, less than 5% of people ride public transportation.

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But 84% of the people see value in it.

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So his argument is we shouldn't focus so much on getting from 4% to 4.1%.

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We should focus on ensuring that what the 84% see value in, that we meet

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that, we show them, we're doing that.

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So they value, you know, helping people get to jobs.

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That's what they value.

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They value the fact that we're providing mobility to the elderly

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and people with disabilities.

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And they also value that we're helping people of lower income

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families get to jobs and healthcare.

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Those are things they see value of in public transportation.

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You're like the king of big data, Rikesh.

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So talk to us about, you know, how is transport changing?

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How can we better meet the needs of the community and tell that story to the 84%

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using technology and big data, et cetera?

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I think mobility is in such an exciting period when it comes to new technologies

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that if I go back to when my career started, just my job, you know, the

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fax machine or a CD or even just memos was the way we worked with each other.

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Even email was quite new when I started.

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And you know, if we think about operations, how that's changed.

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You know, we're very petrol-centric in the past.

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We're now talking about electrification, we're about sustainability.

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But I think the area around customer and technology is at an incredible,

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interesting, and an opportunistic period.

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And I think the word customer is critical, not passenger.

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And I think when we start getting think about who we're serving,

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we are there serving the citizen.

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We're not simply there for performance targets and just simply

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saying, the buses arrived on time.

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If that bus arrives on time, is it right from the customer's perspective?

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Is it when the customer needs it?

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And also customers don't just think about the car.

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They're very multimodal.

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So they use all forms of transport.

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, They all have different personas.

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In the morning, I might be a car driver.

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In the afternoon, I might be a cyclist.

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In the evening, I might be picking up my kids and might go back to the car.

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So again, there's very different personas.

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Your journey in central London is very different to your journey in

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suburban London, or even if you're in the outskirts, where I am,

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I'm just on the border of London.

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And I think the city's changed, and I think customer's

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expectations have changed.

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So the city's changed because now it's a 24/7 city.

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You know, whether it's movement of freight, movement of people, the city's

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always on, particularly London, and I think expectations are now much higher

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because if you think about an average customer's experience, they might be

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ordering their Amazon in the morning, or they might be using McDonald's in

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the afternoon or something else, and suddenly they have a good customer

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experience, arguably, and then when they come to transport, they just

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sometimes say, why isn't it just as good?

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So, I think expectations are higher.

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And you touched on it in your question.

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You know, the opportunities we have with new technology, whether it's big data,

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whether it's cloud, whether it's the role of AI and machine learning, the rate

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of technological change is incredible.

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And I think what we need to get much better at is get getting better at

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what outcomes do we want for our city?

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How do we better understand our customer?

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How do we better understand the offering that we want to

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provide and when we provide it?

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And ultimately, I think what we want to do is use data, use new technologies

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to embrace more value, and that's about doing things better, doing

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them cheaper, doing them quicker.

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And one example in London is, you know, we release all of our data in

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the city, and by releasing that data around where your bus is, where your

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tube is, and this was done a decade ago.

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It allowed the customer to engage with the organization and the city

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through their channel of choice.

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So if you wanted to use City Mapper or Apple Maps or Google Maps, you can

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work with them and engage with them.

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But what we care about is ultimately is it driving a behavior change where you

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are using public transport or sustainable forms of travel, which then supports

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the agenda around reducing congestion, improving people's health, economic

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benefits, getting people to jobs, creating better places, better communities.

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And a lot of that was because people were getting the right

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information at the right time.

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They were able to make better informed decisions and by making those

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informed decisions, they were then using public transport more and more.

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So I think that's just one example of the use of data, but there are

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so many others, and I'm sure during this discussion others will come up.

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. You mentioned the congestion in London, and that's a hot topic here in America.

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The congestion charge, because we just had our first city

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start that earlier this year.

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New York City.

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Tell us about some of the experience you had there in London running congestion,

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charging, and now the low emission zones.

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Yeah, so if we go back all the way to, 2000, let's say we're talking 20

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years ago, we were, we had the first, the world's first congestion charging

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zone, and immediately we saw an impact.

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But that was a bold policy decision for Mayor Livingston at the time

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because people were quite used to just driving into London,

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parking and then coming back home.

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So in parallel there was a massive investment in buses in the tube

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network upgrading the tube network and encouraging better places.

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So people thought there was an alternative there.

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And then what the idea is that once you've got the alternative there, you

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want to disincentivize the usage of car.

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And what we saw very quickly is there was a reduction in car usage

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in Central London, which had a direct impact, not just on congestion,

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but also better air quality.

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Then what we've seen more recently is the ultra low emission zone

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that's been created in London, and it was controversial at the time.

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Some people, particularly in the suburbs that weren't so keen on it.

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But what we've seen again is as a result of the ultra low emission

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zone, we're seeing reduced congestion.

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We're seeing cleaner cars operating in our cities.

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But again, with the Elizabeth Line, with the Super Loop Bus service and, other

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forms of alternatives, people are shifting to new forms of behavior, and in this

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case, sustainable forms of transport.

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And I think we're seeing the same in other regions too, where in downtown

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or in central parts of town, you know, ideally you wanna make it walking

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friendly, cycling friendly, and more public transport friendly, which

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allows the economy to thrive and allows people to have a better experience

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of their city and enjoy it much more.

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Yeah, there's a fight here in the US over it, the federal administration

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is against them doing it, and they've had a court block that, and

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New York wants to keep doing it.

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They've, we just did a show on this few weeks ago.

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It's reduced, I think, traffic around 15 to 20% in the downtown

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area during peak periods.

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And they've collected hundreds of millions of dollars.

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They're putting it toward the capital cost here.

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But you're right, TFL was the leader and now what is in Singapore

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and a few other cities as well.

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Speaking of London, for those who are listening, if you wanna know more

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about, Elizabeth Line and the Super Loop that Rikesh was talking about,

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we recently had Andy Lord on, the Commissioner of Transport for London.

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He kind of described all those in detail.

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Rikesh, you and I have a friend, joint friend in Andy Byford.

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I guess you gotta be named Andy to be the head of transit in London lately.

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But, now he came over here to the US and worked for Amtrak for a

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while, and now he's been assigned a job with Amtrak to help them.

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I just went through Penn Station in New York yesterday, 'cause I was coming

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down on Amtrak through Connecticut, and he's gonna revamp that for us.

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You just saw him recently, right?

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Yeah.

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We met in New York not so long ago.

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And Andy, I've really enjoyed working for Andy and I think what Andy gave

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was he really cared about innovation.

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Sometimes people, when it comes to innovation, think it's a bit shiny.

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It's a bit of a widget.

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Andy really got it.

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You know, he got the policy angle about new ideas, new thinking.

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He got the technology angle, the process angle.

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And I'd always remember if I bump into him in the lift or if I'm walking down

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the corridor, he'd always say to me, how are you solving some of my problems?

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That's good.

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I love that.

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So you would never, ever say, what technology are you bringing in?

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And, I'm really delighted for Penn Station.

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I think he'll do a fantastic job, and I think a lot of this is around leadership.

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You know, what we need in transit is we need leaders that are willing

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to take some risk, that are willing to think about art of the possible.

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Because if we carry on work the same old way that we have been, the reality

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is we don't have enough budgets.

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We'll overprescribe solutions to the market, or we'll end up building ourselves

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and it'll only get us so far in terms of the North Star and our strategic goals.

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So we've got to be more innovative, more creative, and also more entrepreneurial.

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And without a shadow of a doubt, I really enjoyed doing that with

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Andy had many others at TFL.

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. You know, we talk about policy change and where we need to head.

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We're talking big picture items you and I are today.

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You know, there's a famous book here in America and around the world

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called, by Stephen Covey, called Seven Habits of Highly Effective People.

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And one of the seven habits is begin with the end in mind.

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And for me, the end of public transportation has always

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been the passenger, the rider.

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And a lot of times we don't make policy decisions.

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I've been an elected official, a county executive administrator and a CEO of

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transit systems, and I see how policy decisions are made and there's a lot

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of tug and pull and anecdotes that are told, stories that move policy makers.

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How do we go back to where it should be?

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Where I think you and I share this opinion, putting the citizen at

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the center of our decision making.

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It's a great question, Paul.

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I think we've just got to meet them.

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We've got to go out there, really understand the pain points,

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understand the communities.

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I mean, in London we've got so many diverse cultures, so much spectrum of

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wealth, lots of diversity of thought.

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And that means that we can't just assume we know the answers about every region.

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So London has 32 or 33 municipalities.

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We can't just say, Redbridge wants X and Brent wants Y, et cetera, et cetera.

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Really got to go out there and engage with the local citizen and

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understand the different pain points.

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And I think we can't just rely on customer research because sometimes

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we're making decisions based on, we've asked, you know, X people based

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on a question that we've designed, and we will say, what do you want?

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And.

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And then they'll give you an answer and we'll say, this is what they want.

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The reality is we need to go out there, get some real qualitative

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research, and we talk about design thinking, start shaping those personas.

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Now, people have different views on transport, depending on the context.

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That same person.

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Go and ask them what's working, what's not working.

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Remove that bias and be also prepared to experiment.

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Part of that is try something, see what's working, see what's

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not working, how do you pivot?

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How can you be more agile?

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And I also think there's a big role around being transparent.

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Yeah.

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It's about what's worked, what hasn't worked, why hasn't it worked?

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What are you doing next?

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And I think sometimes there is a risk not in cities across the world,

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that we've got a bunch of people that make really important decisions.

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But they're not really getting out there and really engaging with the

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local community because it's hard, 'cause as soon as you get different

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views and different perspectives, it's harder for you to deliver.

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But what I always believe is, you know, if the customer wants reliability, they want

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safety, they want security, that's great.

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Let's give them that.

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Then they want to make sure they're getting value for money.

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And also they'll probably want some innovation and progression.

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But how do you make sure you contextually get that right?

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By asking people, by asking families, and really talk to the local politicians,

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'cause the beauty of most of our cities is you have local politicians,

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you have citywide politicians.

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How do we make sure that engagement's working really well, and you're

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bringing those community voices in things that you design.

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Otherwise, the risk is a vast majority will succeed, but there'll

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be many that are left behind.

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And how do you ensure it's not leading to inequality?

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And you're creating different tiers of communities at a local level.

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And the only way you can get that right is by going there and really

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doing that engagement upfront.

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And I think this tool around design thinking and really asking the questions

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of why, you know, what is the issue, what's the problem that we're trying to

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solve, and then come up with solutions is absolutely the right way forward.

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That's great.

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We're talking with Rikesh Shaw, one of the world's leading innovators when it

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comes to public transportation and beyond.

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Former Chief Innovation Officer for the world's largest public transportation

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network at Transport for London.

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And that's where you're calling in from today, right Rikesh?

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I'm just in sunny London.

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It's 32 degrees, so really enjoying it.

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That's good.

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Sunny for a break, huh?

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And you're lately you've been teaching at universities and

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lecturing some too, right?

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Yeah, I've really enjoyed that.

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So I'm lecturing at a series of institutes, both in the UK and

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US, and a lot of it is around smart cities, transport innovation

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and agile ways of working.

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Well, let's dive right into that then.

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Give us a free lecture.

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We don't have to pay 5,000 to hear you at Harvard today.

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You're gonna give us, tell us some about that.

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Just go wherever you want to with it.

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You know, how can we provide market innovation in public transportation?

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How should cities adopt this to make their cities more mobile and agile, et cetera?

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Yeah, I think a lot of this is around, the whole supply chain has changed.

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And, you know, whether it's a startup or a scale up or a large corporate

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or an academic spin out, we've got a diverse range of suppliers out

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there broadly because the barriers to entries have come right down.

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And the advances in technology have meant that they can create

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products much more readily.

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And that means that when we're stuck, we're trying to solve some of our

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problems around congestion, air quality, greater usage of public transport.

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And the list just goes on and on.

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How can we be more vulnerable and share our problems with the market

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and say to the market, how can we co-develop solutions with you?

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Because if we think about how it's currently done is currently, if

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there's a particular problem that you're solving, the city's quite

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worried about sharing that publicly.

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So the first thing that we'll do is say, let's put a big team

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together to solve this problem.

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Then if they can't solve that problem, they'll go to the market and they'll

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prescribe quite often to the big tier ones to say, this is what we would like.

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And there's nothing wrong with the tier ones.

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They're do a great job.

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But what I would love cities to do is to say, we're stuck on this problem.

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Can we go to the whole market and say to people, what types of ideas have you got?

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Because we are genuinely stuck on this particular problem.

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And then how do you shape the market?

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Because in the UK we spend 400 billion pounds a year on public procurement.

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In the EU zone, it's about 2 trillion.

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And if we go across the globe, 14% of GDP is spent on public procurement, and

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we're not shaping the market well enough.

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We're not giving the right signals.

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And I remember at TFL when I asked the market, how can we get better?

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They said, you paid us on time.

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We trust you.

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You give us regular work.

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Where you fail is you're not being open enough with your innovation challenges.

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And what I would love your listeners to think about is what problems have

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you got and how can you frame them to the market in a new way where you are

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genuinely co-creating that solution?

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And most of them won't work.

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I'll say that upfront, but how do you learn from it?

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Move on.

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But the ones that do work, I assure you, the payback will be significant.

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You know, one of the things that I admire about LA Metro Los Angeles is they have an

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open innovation opportunity where you can submit ideas from the private sector and

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their office of extraordinary innovation, will review it, and it's an opportunity

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for the market to speak to needs that have not yet been crystallized by the agency.

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Let's dive in just a little bit more in that area of procurement,

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Rikesh, that's an area where you've had done some, a lot of work.

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What are some specific ways that you've seen transit agencies

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improve their procurement efforts?

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Yep.

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And, and quite often I think the procurement folk actually, there's always

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a route to market and the procurement folks sometimes, they're brilliant

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people, but they worry too much about getting challenged or getting sued.

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For me, that's a given.

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You know, you shouldn't be getting challenged, you should be getting sued if

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you're, if you're being open, you're being transparent, you're being consistent,

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reduces the chances of challenge.

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But I think what we need to do much better is firstly, I think with our procurement

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colleagues, engage as early as possible.

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Engage as early as possible, say these are some of the challenges that I have.

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And then I think go out to the market, look far and wide

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through horizon scanning.

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You know, if your boss says, I need a gen AI strategy, well

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that's great, but what's it for?

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So you've gotta understand what Gen AI means and then understand how it aligns

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to the problems that you have, similarly with any forms of new technology.

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So I think the first thing is understand from the market what

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is hype versus what is reality.

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Don't worry about the technology, worry about your problem and

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see if the technology can help.

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I think the second thing is then once you start defining your problem,

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say to the market, you are, you've sent a signal to say, we are ready

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to procure some things downstream.

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But at the moment, with all this new technologies, we are not

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quite sure what role it can play.

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So we want to de-risk it by working with you to experiment and see

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what works, what doesn't work.

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Then the third element is make sure you create a very robust procurement strategy

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that allows you to do the engagement, the R&D, the experimentation, but also

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the scaling through one procedure.

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If you start breaking it up, it's not fair on the company that

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started with you, who then have to leave and someone else comes in.

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And finally, you've got to make sure internally you are all aligned because

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you and I know when we're trying to procure something in an organization,

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in a transit environment, we're not the only decision maker you might have to

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talk to your tech team, your HR team, your sponsorship team, the service owner.

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So it's a federated purchase in terms of bringing the innovation in.

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So how do you make sure all of that's aligned internally and you all take

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your badges off and say, this is a naughty problem that we need to solve.

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Are we all up for it?

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And if we're not, why don't we say no at the beginning and focus on something else?

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So I think we need to create this culture.

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How can you be more entrepreneurial?

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As a result, how do you make it exciting for the market to work with you?

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Otherwise, frankly, you won't be addressing some of those challenges

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that you have and getting best value.

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We have a lot of CEOs listen to our show.

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I just got a message yesterday from a friend of mine who got a new CEO job

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in a major city here in the US and he told me, Paul, I listen to your podcast

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a lot and I hear what CEOs have to say, and it's helped inform what I'm doing.

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Talk to the CEO or the top executive now.

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From your perspective, what are some of the barriers to transit

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agencies who are not applying agile and innovative ways of thinking?

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How can a CEO or a senior vice president of an agency break out of that mold

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and be willing to take some, you know, calculated risks to improve things.

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I think for innovation to work, it's about leadership.

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You know, if we think about how much we spend on public procurement,

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it's probably about 65 to 70% in an average organization, and that means

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that leadership needs to be not just how many tenders are we putting out?

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It's around what tenders are coming up in the next 3, 4, 5 years.

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So really get your head above the parapet and say, where are the opportunities

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that we can actually do things cheaper, can do them better, do them quicker?

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And if I procure something now, how do I make sure it's fit

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for purpose in 7, 8, 10 years?

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So how do you create a more modular way of working?

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So I think my message to the CEOs is that leadership around asking those challenging

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questions of where is the market going?

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Where is the new technology going?

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What does good look like in 5, 7, 10 years?

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And how do we make sure we're making the right decisions now?

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Now, because it's not just about make or buy, you know, quite

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often that's leadership level.

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We say, should we buy this or should we make this.

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Actually spend more time on understanding that problem that I

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mentioned earlier, and then go to the market and do your due diligence about

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what is safe to buy off the shelf, but perhaps what else is out there

Speaker: 00:24:52

that could be worth taking a punt on.

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Because it could create lots of value downstream.

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And then how do you work with the market in a much more entrepreneurial manner?

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Say, what does good value look like for me?

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What does mutual value look like?

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How do I turn my city into a test bed?

Speaker: 00:25:09

So I send that signal to the market, and the market then says, I'll invest in you.

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And then how do I sell that same product to other cities across the world?

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And I just don't think we're doing that.

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I think at the moment we're just plugging and buying stuff that's already there

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that's been there for many years.

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And I don't think we're challenging the market hard enough to bring new ideas in.

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Rikesh, give us your final thoughts about where we're going and how do we get there?

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We've got so many challenges in the cities right now, so I think it's

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fundamental to think about what does good look like in our cities.

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How do we continuously work with the wider ecosystem to

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co-develop the right solutions?

Speaker: 00:25:45

But it's also not about the now, it's also about the future, which is what

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does our city look like in 5, 10, 15 years and how do we make our cities

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better and how do we support their growth agenda and ultimately make cities more

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livable and make them enjoyable for our citizens now and our next generation.

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That's wonderful.

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Well, it's great kind of idea, ideating with you as they say today.

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Talking to big topics.

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So many times on our show we're into the very granular of running a

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transit system, so every now and then it's good to pull back the lens and

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see it from the bigger perspective.

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And you're one of the, one of the best people I know to help us do that.

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Hey, if people wanna get ahold of you and maybe, you know, poke you or your

Speaker: 00:26:23

brain for a few more bits of information, how can they get ahold of you?

Speaker: 00:26:26

Yeah, thanks Paul.

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So I think coming through LinkedIn would be great, it's Rikesh Shah.

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And just look me up.

Speaker: 00:26:33

Yeah, I think that'd be the best way.

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Or by you.

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They can drop you a note I'm sure you can connect

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And I'll forward it to you.

Speaker: 00:26:38

Yeah, that's right.

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Well, thanks again for being our guest today from across the pond, as they say.

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And, I can't wait to see you at some upcoming conference where

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you're giving a great talk.

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Thank you, Paul.

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It's been a delight to be on.

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Thank you.

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Thanks for listening to Transit Unplugged.

Speaker: 00:26:56

I'm executive producer Julie Gates, and this episode was created by host

Speaker: 00:27:00

and producer Paul Comfort, producer Chris O'Keefe, associate producer Cyndi

Speaker: 00:27:05

Raskin, and podcast intern Des Gates.

Speaker: 00:27:08

Transit Unplugged is being brought to you by Modaxo, passionate

Speaker: 00:27:11

about moving the world's people.

Speaker: 00:27:12

If you wanna dive deeper behind the transit headlines and get boots on the

Speaker: 00:27:16

ground intel on important updates like the Trump Administration's transit

Speaker: 00:27:20

priorities, or how to get funding, check out Transit Unplugged Insider,

Speaker: 00:27:24

our new YouTube show where Paul and I take you inside today's hot topics.

Speaker: 00:27:29

Paul knows what's going on in Washington DC and has the inside scoop.

Speaker: 00:27:32

He's taking a lot of meetings with a lot of people and we wanna make

Speaker: 00:27:35

sure you know what's going on.

Speaker: 00:27:37

You can watch and subscribe to Transit Unplugged Insider on the Transit

Speaker: 00:27:41

Unplugged Podcast page on YouTube.

Speaker: 00:27:43

Thanks for listening, and we'll catch you on the next episode of Transit Unplugged.