¶ Introduction to Hong Kong's Unique Transit System
I'm Paul Comfort, and this is Transit Unplugged, the world's leading transit executive podcast, now in our seventh season. How would you like to find out all about how a public transit system in one of the major cities in the world takes no subsidy from the government? How do they do that? We'll tell you today how it's done with Adam Leishman. Adam has a great history.
He started out in Australia, with his grandfather's bus company, then moved to London where he took over Tower Transit, and then they moved into Singapore, and now he's been in Hong Kong living the car free lifestyle for over eight years now, and talks to us about how public transportation works in three of the world's great public transportation cities, London, Singapore, and now Hong Kong.
¶ Meet Adam Leishman: CEO of Bravo Holdings
He is the CEO of Bravo Holdings, which is the owner of CityBus and Bravo Media in Hong Kong. Nine out of 10 trips taken in the City of Hong Kong are taken on public transit. His operation, one of the three companies that operates under contracts with the government, transports a million passengers a day.
¶ Hong Kong's Public Transit: A Deep Dive
Today, he's going to dive into how they operate their 1700 buses, how the whole tender system works in Hong Kong, what we can learn from MTR, who operates the rail system there, and how they operate with transit oriented development that helps subsidize the train system. So many things we're going to dive into today in an area of the world which we haven't talked much about here on the podcast. Join us on this adventurous conversation on Transit Unplugged. Now, Adam Leishman.
I'm excited to talk about public transportation in Hong Kong in particular. We've never covered that on Transit Unplugged. You're our first guest from there. And so thank you again for sharing with us. And why don't you open us up with, tell us some about Hong Kong.
I moved to Hong Kong about three and a half years ago in the middle of, COVID, which was an interesting time to change countries. And was part of a group that purchased the second largest bus operator in Hong Kong. there's two large bus operators running the franchise bus services in Hong Kong. and Hong Kong is, by many measures, considered the number one public transport city in the world.
nine out of every ten trips In Hong Kong occur on public transport, which as an Australian, and in the U S very similar to Australia, you know, having nine out of every 10 trips on public transport is kind of a bit, hard to comprehend.
so when I moved here and I moved from London, actually, I was running buses in London and Singapore previously, but it was a real, you know, eye opener, the business that I'm responsible for here, Citybus moves about a million people every day on 1, 700 buses, with about 5, 000 staff here. and, you know, it's just a great system to be a part of. the system is very unusual to a lot of the systems I've been a part of previously, and that is because it's a commercial system.
one of the few commercially run bus systems in the world, actually, and particularly on the back of COVID, I don't think there's many left, if any others at the moment, that aren't heavily subsidized. We are, fully dependent on the farebox, and run as a commercial operation.
¶ Challenges and Innovations in Hong Kong's Transit
We took a big hit during COVID when, the ridership went down dramatically. but we've weathered that storm and we've come through and now, the future's looking a lot better. but yeah, it's a commercial system, so there's franchise operators, There's three franchise holders of the buses, and then there's the MTR which runs all the underground or the tube system.
So we as bus operators need to rely on the farebox, but we also have, you know, a lot more say in how things are done here as opposed to if it's under a contract model, for example. So, you know, by way of an example, we're responsible for all the advertising, we're responsible for, the bus shelters and the bus poles and the marketing, we're responsible, for the ticketing, the app, so there's a broader responsibility than you would find in a normal kind of contracted operating environment.
That's interesting. That's a lot of information, Adam. Thanks. I want to unpack it a little bit if we can.
¶ Understanding Hong Kong's Transit Operations
So you all operate as one of three providers, and then there's MTR does the rail, is that what you said?
Yes. And there's minibuses as well, which are operated by separate companies. but overall, you know, between the minibuses, the franchise buses, the franchise buses are mostly double deck, I would say. the public transport, and there's a lot of ferries as well. But let's say roughly 50 percent in the bus system, 50 percent in the rail system of the trips taken.
That's good. You bid on this and the Hong Kong government selects you all for like, what, five to seven year contracts or how does that work?
no, so we renegotiated last year a new 10 year franchise. Okay. We have two contracts, which, both go for 10 years from last year, so we're one year into that. and it's generally renegotiated, each time that comes around, same with the other operators. And on the rail side, it's slightly different. the MTR is, I think about 60 65 percent owned by the government.
and that has a special relationship where they are responsible for the development of the MTR system, the underground system, and it's also attached to property rights around the stations, which is a very interesting way and forward thinking way of funding a lot of the rail infrastructure.
you see this fantastic rail system that's been funded by the development of the stations where they'll build retail and commercial and residential and then have an ongoing income supply that subsidizes the operation itself. So it's a very interesting model that they've developed in Hong Kong.
Yeah, it is. It's really a model, I think, that other countries are looking at. I know here in the U. S., there's been a lot of studies done on that model. So, MTR also operates the Elizabeth line. in London for Transport for London. I've ridden on that. We've interviewed the managing director, had him on our podcast before. So, transit oriented development there. So, is the rail system the same as buses?
It operates completely on, the revenue they bring in from, retail and, leases and, farebox and the government doesn't have to directly subsidize it?
Yeah, so the MTR and the buses are both, I guess you'd say, commercial operations. However, the big difference is the MTR has property rights and they're able to, generate other income. whereas the bus operation here, we have limited other income sources, which is something I'm exploring and looking at, setting up other things.
¶ Revenue Models and Media Ventures
And actually, we just set up a media business, which is going pretty well. So, we have the opportunity to do other things to help support the operations themselves because, even in Hong Kong where we've been commercial for 90 years, actually we've just celebrated 90 years of buses in Hong Kong, it's at a point where it has been challenging the last few years and with COVID we really, got tested, let's say, so it's a time to kind of recalibrate, I think.
Right. Okay. Let's switch back to buses then. So you operate completely without government subsidy, but you have, a franchise for like certain routes in certain areas. So you don't have competitor bus companies coming in on your routes. Is that right? Or do you share stops and hubs?
Actually, that sounds like a simple question. So we have the exclusive rights on particular routes, with a few exceptions. There's some routes across the harbour. So Hong Kong, from a geographic perspective, is, there was an island. where we kind of historically dominated and provided the operation on the island, and then there was the Mainland that's kind of attached to China, but is Hong Kong. Now the tunnels, there's kind of like, we, cross over and go either side.
So some of those tunnel crossings, we operate 50 50. So you have the one route number, but actually we do half of it and KMB does the other half of it. but most of the routes will have like our routes and they'll have their routes. In addition to that, however, there's a minibus network that emerged over the years, and the minibus has, think of it like a demand responsive service, that before demand responsive was even being talked about with technology, that's the minibus system in Hong Kong.
So, there is a bit of competition between the big double deck buses and the minibuses. There are some routes that the big buses can't go, the minibuses can, which makes sense. But then there's there's also competition and has been historically between the rail network and the bus network.
As you can imagine, with a full commercial system, where initially buses dominated, as the rail system expanded, they were taking away customers from the bus system, and of course, the bus operators, which were privately held, saw them as a competitor, as a threat, so what emerged over time was almost two competing systems or networks, one on the road and one on the rail system, and of course, where we are today, looking at the environment, looking at
congestion, looking at all these other things, since we've got here, we've tried to kind of coordinate that a lot more between the modes because actually You don't want buses and rail competing. You want them working together and complementing each other as a body. So we've been taking some steps to try to help that happen.
this is so interesting to me because it's such a different model. So Adam, one other source of revenue that you've mentioned to me that you all have been able to do to kind of help your company is you have a media company. What's that about?
two and a half years ago, during COVID, we had a challenge with the advertising on the buses. Having experienced in London what was possible and the tremendous job that's done there, I just wasn't happy with the quality that we were getting, nor the innovation. So we set up a media business and started doing it ourselves on the buses, really pushing the limits when it came to creativity and Ensuring that the quality was second to none.
our competitor, the MTR, because remember the buses and the trains we kind of compete, but we kind of work together. and I've been trying to get as much closer and, you know, we've done some good things together because, we grow the pie, let's say together, it's much smarter. they were obviously impressed with what we'd been doing on the buses and asked us to bid in their upcoming tender. And we won 20 percent of their system.
So we're now advertising on the train stations and the trains and the light rail. that business in the space of two and a half years has, become the second largest advertising agency in Hong Kong. And we're happy to host Out of Home Advertising, Congress tomorrow, in Hong Kong. So that's been a really wild ride, very exciting. And I would have never guessed that I'd be moving into advertising, but it's been fantastic.
It reminds me of, Sir Richard Branson. I'm listening to his life story now, his autobiography and listening to him read it. And that's kind of the way he was, you know, he just continued to look for vertical expansion opportunities, right?
and I guess in many ways, like, I got into the transport space because my family was in it, but I had a career before that.
¶ Global Transit Insights and Future Trends
And I guess deep down I'm an entrepreneur that happens to be in transport and now I've grown to love and see the value of it, but I always see opportunities as well.
That's amazing, man. So, here in the U. S., you have another company, right, that you founded? Tell us about that company.
Yeah, so Ascendal, my company, which has an interest in Hong Kong, but has other operations in the U. K., Chile. And last year, we bought a very small business in the East Coast of the U. S. we've got, three contracts, soon to be four contracts in Florida and Georgia.
we've had a presence in the U. S. for going on five years now, doing a bit of consulting work for various authorities and operators, specializing in BRT and strategies around property around BRT, and, various other things, hydrogen, but it's nice to put the toe in the water when it comes to operations, which is really our core business. And that's going really well.
it is good to get a more in depth understanding of how things work in the US market, which is probably more similar to what I'm used to from my time in Australia and London and Singapore. Hong Kong's really the exception. It's quite unique. So, so yeah, it's really exciting to put the toe in the water and you know, things are going well.
is your ridership back up to, like, 2019 levels pre pandemic, do you know, on your system, or close? Yeah,
I think things have changed a little bit. We're probably like 7 8 percent down on where we were pre pandemic.
Okay, well that's not too bad.
It's not too bad, but I think there's been a bit of change in travel patterns. There's also been a bit of rationalization of services. So it's hard to put the, you know, exactly what the breakup of that is. And then also the airport is still, recovering, I mean, it was one of the, I think it was the number one visited city in the world. I think we had something like 60 million visitors a year. and, you know, we're not quite back up to those levels yet either.
So we also have the exclusive rights from the airport to Hong Kong Island and Kowloon South, so we're susceptible to, what's happening at the airport as well.
But with nine out of 10 trips happening, riding the bus, I mean, that's amazing, Adam. the population really is into public transit.
Oh, I mean, some of our buses, you're getting, 60, 70, even up to 80 percent occupancy on average. You know, sometimes when you're in business, you forget about why you're in business. and I think public transport and buses are such a critical part of society, and we make such an impact in not only the people we serve, but also the people that work for us and their families.
And, you know, my father and my grandfather, our family's been in buses in Australia for over 50 years now, and, that's something I learned from watching my father is, how important it is to look after the people that work for you, and to always remember why you're doing what you're doing, so, you know. I think we play such an important role in society,
¶ Adam's Family Legacy in Public Transport
And so, since we're on that topic, I did want to dive into that a little bit, delve into your background and history and your families. You have a rich history. Why don't you tell us more about that?
Yeah, yeah. So my grandfather, 50 years ago, bought a business that was struggling. my father left college to go help him fix it. They did. This was in, just north of Sydney in Australia. my father in 96 started a company with the first contracted out service in Perth in Western Australia, and, did very well. I was growing up around a depot. I was seeing how the buses operate from a young, young age and learn a lot from my father. And, you know, I think compassion is a good word you used before.
But also leadership, you know, the way he respected his people and treated them very well, I think, is one of the reasons he was so successful and I've tried to emulate that.
And then what happened to, how long were you there? Where did you go from there? And cause you were involved in Tower Transit for a while, right? walk us through your career path.
Okay. So Transit Systems was the name of the company in Australia. I helped to set up a head office and grow that business in Australia and then in 2013, an opportunity came up for us to expand, back to the motherland, let's say, and, we went to London and we bought a business there that was running 500 red buses, double deck mostly, for Transport for London.
And, I relocated to run that business, became the CEO of Tower Transit, and absolutely had my eyes opened, coming from Australia to London, London Red Buses, the iconic buses, what other city in the world is, the icon is a bus. and it was just an amazing system to be a part of. I learned so much from Transport for London and the people there, they treated me so well.
And, you know, I was able to, well, we, the team I was with were, were able to turn around what was a struggling business at the time, turn it into one of the top operators in London, and including running hydrogen buses and various things, which I can talk about later.
And then in 2015, you know, I spent a lot of time with the Singapore government, giving them, you know, some thoughts around the optimal structure when it comes to governance of buses, and they opened up their market to international competition in 2015. There were 11 bidders. for a 400 bus contract, the first one, and we were very lucky to be successful in winning that one.
so, you know, that's kind of, when the global operators, Stood up and said, who are these guys that have just popped up and won this contract in Singapore? but that was a life changing experience for me and that really where, I realized the true value of public transport to a city and what it can unleash and the value it can create for the people that live there in so many areas.
You know, if you, ask me, what's something that can help with the environment, that can help with congestion, that can help with health, that can help with economic development, help with, lifestyle, and the list goes on and on and on, and I would say, well, there's nothing that can do all of that. But actually, public transport helps all of those things, and it's quite extraordinary when you put it in that context, that public transport done well can really transform an entire city.
And so I saw that kind of firsthand. Singapore was already a great city when it came to public transport. But they aspired to be even greater. And so they really transformed their bus system at that time. New buses came in, the network expanded, new depots were built, the customer experience was brought to another level, the information availability, just everything. we were at the forefront of that, I even remember at one point it was just a surreal experience.
I got into an Uber and the driver realized that I was the CEO of Tower Transit and we had such a profile in Singapore because, you know, the buses meant so much to the city and there was so much attention. I mean, this guy, you know, he was squealing with excitement that I was in his car and I'm just like, this is weird, you know, but it was a great experience.
and really, at that point, I realised I want to dedicate my career to this because, you know, if I can take these learnings and transpose them into other cities, the impact we can have is dramatic, is dramatic. And particularly when you overarch that with a rethinking of how we do planning and urban development. And I saw some great examples in London, like King's Cross, for example, where you turn in transport hubs into community hubs.
And where people want to live and be because it's the exciting place, it's connected, you don't need a car. and you can turn really down and out places in a city. All of a sudden they become the place you want to be because you don't need a car. You've got all the action that you need and walking distance. And if you need to go further, you've got every transport mode at your availability. So yeah, very exciting journey.
I sold that business in 2018, Ascend, Tower Transit, back to the partners so that they could then, roll Tower Transit back into the Australian company and they did a deal with a listed company and that's how they became a listed company. At the time I didn't really want to work in a listed company environment so I formed a Sendle and then the Hong Kong opportunity came up and the rest is history.
What a story, Adam. And you know, I was thinking while you were talking, you have worked in senior positions in three of the world's greatest transit cities. London, Singapore, and Hong Kong.
It has been amazing. I pinched myself some days, and not only worked in, I was the CEO of companies running buses in each three of those cities. And I did some maths the other day and worked out that in the last 10 years I've moved over 1.8 billion people, which, Adam. If you had asked me that 10 years ago, I would have never predicted what I would have done.
Not many people can say that. That's wild.
¶ Final Thoughts and Closing Remarks
I guess in our remaining minutes, you mentioned that you have been involved with hydrogen way back when, which of course is coming into fruition here in the U. S. and Canada, especially people are really leaning into that as a new, bleeding edge or leading edge technology. What else do you see for the industry going forward? Whether it's technology, whether it's, transit oriented development for around the world, what are some of the hot trends you see happening right now?
yeah, I mean, I was running hydrogen from 2013 in London. I've just brought it into Hong Kong actually last year.
Is it working good for you there?
Yeah, it's only been going for a few months, but it's doing well. And the fans in Hong Kong, I mean, the streets align when we bring a new bus out, and particularly when it's the first tri axle hydrogen double deck bus in the world. People are like lining up with their cameras, waiting all hours, so it's an exciting place. But with regards to trends, I mean, obviously there's the big trend to zero emission, but I think. As an industry, we need to get better at telling the narrative.
It's not just about zero emission. That doesn't fix all of our problems. Actually, public transport itself and mode shift and getting people out of cars and into buses and trains can have as much, if not more, impact than turning an entire fleet zero emission. Particularly, you know, at the early stages of this transition, there's plenty of teething issues. And if things don't go well, and actually people stop using the bus and start using their car, then we're in a worse position.
so I always say hasten slowly when it comes to new technology, but I think what we shouldn't be hastening, what we should be pushing super hard is expansion of public transport, and we've got to make it sexy. You know, the perception of public transport. you know, where I come from in Australia, and I think U. S. is very similar with very big spread out cities where people are very car dependent. A lot of the developing world rely heavily on buses in particular, but they aspire to have cars.
It's a sign of wealth. there was a very interesting study I saw a few years ago about The car desirability, and in Europe and cities like that, where there was good public transport systems, and it was in London, it was seen to be, okay and acceptable to use a public transport system, car desirability was actually low. And I haven't had a car for eight years, because I love not having a car and moving around.
But actually, in the developing world and in the US and Australia, where we have very spread out cities, you know, car desirability very high. And I think that's a shame and something that our industry should really focus on, because we have so much to offer. And when it's done well, it's kind of the silver bullet in many ways to a lot of the city's problems. And we don't shout that enough.
We don't claim that position enough because I think we really should be because there's so many benefits that come from improving the perception of public transport and delivering that.
That is very well said. I've heard, um, Other folks in the industry, leaders in the industry, global leaders, say very similar things, uh, that, you know, let's not, let's not make that the end all, be all, do all, zero emission, really the end all, be all, do all is the silver bullet, public transit, and that's just a way to make it even cleaner than it already is. Any closing thoughts you have for us, Adam?
Yeah, and on that point, I mean, zero emission is mostly about carbon, but actually, you can have a lot of electric, cars and they're still, off gassing and there's still NOX and there's still rubber, toxins going into the air with the, we're breathing. So yeah, I absolutely echo what you just said, if you want to be healthier, we've got to stop building roads and cars, and we've got to design cities for people, and make them more human and community based.
And, you know, having lived in Australia, where we have very similar cities, style wise, to the U. S., And then living in places like London and Hong Kong, where you can have that more dense development around transport nodes, and you can create community, you can create all the things you need for lifestyle, and actually, you know, having personally changed my lifestyle to be in that environment, I think It's much more fulfilling.
it's much more, a lifestyle that is not lonely, let's say, whereas often living, you know, driving a car from house to work, house to work, house to shop, can be lonely. it's not good for health. so I just think we have so much to offer and we need to be bold in saying that.
Wow. what a great commentary on the role, the value as a transit evangelist. I say a hearty hip hooray to what you just said. So, Adam Leishman, thank you so much for the work you're doing in Hong Kong and that you have done around the world. thanks again for being our guest today. we look forward to seeing the great things that you're going to continue to do there in Hong Kong and through your companies and your holdings around the world.
Thanks very much, Paul. thanks for having the time to interview me today.
¶ Coming up next week on Transit Unplugged
Hi, this is Tris Hussey editor of the Transit Unplugged podcast. Thanks for listening to this week's episode with our guest Adam. Leishman. Now coming up next week on the show, we have something actually very special for you. Paul recently appeared on the podcast, Lunch with Leon to talk about his latest book, the new future of public transportation with one of the contributors, Simon Reed so tune in on July 3rd for this special feed drop. And watch the show notes on that episode.
So you can have Lunch with Leon too. Do you have a craving for transit news? Something that you can count on week after week, they give you a really tight minute of news. You should look for the transit unplugged news minute. Now it's as a podcast, wherever you get to podcast. On YouTube and on LinkedIn. Look for. Every Monday morning. Transit unplugged is brought to you by Modaxo at Modaxo. We're passionate about moving the world's people. And a transit unplugged.
We're passionate about telling those stories. So until next week, ride safe and ride happy.