Dag Gogue was walking through the Farragut North Metro Station in Washington last month when he spotted a relic: A data collector with a clipboard in hand jotting down train ridership and system operations information.
Even in the era of high-speed Internet and myriad portable devices, many of the country’s transit systems, large and small, still rely on human beings in physical locations to gather crucial information, Gogue said.
Transit Labs uses software to gather a transit system’s data about ridership, personnel, assets, safety and funding in one place. It then crunches those numbers to help agencies operate their systems more efficiently and report necessary information to regulators.
“There’s actually a wealth of data in this industry, but it’s not being put to use in an effective manner in order to really address the nightmare,” said Gogue, the company’s founder. “Transit is way too expensive, they operate inefficiently, and we can do something about it.”
In entrepreneurial terms, that’s called a market ripe for disruption. In business terms, that’s a market where there’s money to be made — if a relative newcomer can persuade risk-averse transit agencies to take a chance on new technology.
That’s a big if.
Many transit systems hire consultants who send people into the field to collect data manually, then compile the information into reports for the agency’s leaders and regulators.
“The hardest part is displacing the legacy players,” Gogue said.
It’s a challenge that most, if not all, of the young companies working alongside Transit Labs at 1776 are battling. The start-up hub on 15th Street NW caters to a crowd of companies that are looking to sell to government agencies or industries encumbered by strict regulation, such as health care, energy and education.
The start-ups must convince often-bureaucratic entities that spending taxpayer money on cutting-edge, and, at times, untested technology is worth the gamble, rather than buy into a more expensive and sometimes outdated system because it delivers predictable results that the agency has used for years.
“There are ways to be effective in selling to government, and then there are ways to get yourself bogged down into a massive process,” 1776 co-founder Evan Burfield said.
“Even for government, there comes a certain point at which it becomes very difficult to not adopt a much more sophisticated, lower-cost solution,” Burfield added.
Transit Labs got its break in 2010 when the Federal Transit Administration awarded Gogue a nine-month pilot to test an early version of the software. Two years later, Transit Labs won a year-long contract with the Georgia Department of Transportation. The contract was renewed last June, and then again this month.
Transit Labs charges customers a monthly or annual subscription fee so that agencies have the flexibility to stop using the product if it proves ineffective. The company has had conversations with the Washington Metropolitan Area Transit Authority, but so far no deal has been made, he said.
The company signed four customers last month: Miami-Dade Transit, Atlanta Regional Commission, Macon Transit Authority and the Regional Planning Commission of Greater Birmingham.
Gogue is the first to admit that the company’s efforts to win state and local contracts have generated mixed results. For example, the company lost a bid to provide its software to a transit authority in Northern Virginia. A better-known consultant that uses pen and paper to collect data got the contract, Gogue said, because the agency was comfortable with the status quo.
“These entities should create channels that enable them to test new technologies in a much more rapid fashion,” he said.