The Hidden Potential of Transit Loyalty Programs for Marketers

How public transportation is finally catching up to the loyalty game – and why marketers should care

You know what's fascinating? While we've been obsessing over airline miles and coffee shop punch cards, there's been this massive, untapped loyalty market rumbling beneath our feet. Literally.

Public transit systems are waking up to something the rest of us figured out years ago: keeping customers is way cheaper than finding new ones. And honestly, it's about time.

The Post-Pandemic Wake-Up Call

Here's the thing – COVID didn't just change how we work; it completely scrambled the transit playbook. By late 2023, only 9 out of 39 major U.S. metros had bounced back to their September 2019 ridership levels. That's not just a dip; that's a full-scale customer retention crisis.

Think about it from their perspective. One day you've got predictable commuters filling your buses and trains like clockwork. The next? Your most loyal customers are working from home in their pajamas, and you're competing with Uber drivers who show up at their door in under five minutes.

The numbers tell the story: 2024 ridership hit about 79% of 2019 levels. That missing 21%? Those aren't just statistics – they're people who found other ways to get around and haven't looked back.

Why Traditional Transit Marketing Falls Flat

Let me paint you a picture. You're standing at a bus stop that's basically a stick with a sign on it. No shade, no seating, questionable cleanliness. Your bus is seven minutes late (again), and there's no real-time information telling you whether it's actually coming. Meanwhile, your phone is buzzing with a rideshare notification: "Your ride is 2 minutes away."

This is the reality that transit agencies are fighting against. They're not just competing with other transit lines anymore – they're up against the entire mobility ecosystem. E-scooters, bikes, cars, rideshares – you name it.

The kicker? Most transit systems have been measuring success by total ridership numbers rather than customer loyalty. It's like judging a restaurant by how many people walked through the door without asking if they ever came back.

Montreal's transit agency discovered they had a 13% annual attrition rate among riders. Thirteen percent! That's like watching your customer base slowly leak away, one disappointed commuter at a time.

The Complexity Problem That's Driving Everyone Crazy

Here's where it gets really frustrating for riders (and fascinating for us marketers). Try taking a trip that involves multiple transit systems – say, from Dallas to Fort Worth. You'll encounter separate city passes, different rules for buses versus trains, and payment systems that don't talk to each other. It's like trying to use your Starbucks app at Dunkin' Donuts.

One Dallas-Fort Worth report noted that "fragmentation in fare products creates friction" for riders using multiple services. No kidding. When 40% of DART bus riders still rely on cash, you know there's a massive gap between what technology promises and what people actually experience.

This complexity isn't just annoying – it's expensive. High fares (often raised post-pandemic to plug budget gaps) combined with confusing payment systems create exactly the kind of friction that sends customers running to competitors.

The Loyalty Revolution (Finally) Arrives

But here's where it gets interesting for us marketing folks. Transit agencies are finally discovering what retail and hospitality figured out decades ago: loyalty programs work.

Seattle's King County Metro launched "Transit Go Rewards" in 2023 and enrolled over 30,000 riders almost immediately. These aren't just numbers – they're people earning points for free rides and partner services, creating the kind of sticky engagement we see in successful consumer brands.

Montreal's STM took it further with their "Merci" loyalty app. The results? Twenty-five percent of participants started riding more often, and 43% used transit for completely new trip types – weekend leisure trips they'd never considered before. Even better, nearly half of users brought a friend along on "two-for-one" offers.

Think about that for a second. They didn't just increase frequency; they expanded the use case and drove organic word-of-mouth. It's textbook loyalty marketing, just happening on buses instead of coffee shops.

Getting Personal With Transit (No, Really)

The really smart agencies are taking a page from the personalization playbook. STM's Merci app lets riders earn "virtual trees" (tapping into that eco-consciousness we see across consumer brands) and sends personalized retail and event offers based on location data. They've linked 1,300 partner deals to individual trip patterns.

This isn't just about discounts – it's about making riders feel seen. When someone gets a notification about a concert near their usual stop or a restaurant deal along their commute route, that's the kind of contextual marketing that builds an emotional connection.

The American Public Transportation Association notes that agencies can use smart-card and app data to award badges or points for trying new routes or maintaining "commute streaks." It's gamification 101, but applied to something people have to do anyway.

The Partnership Play That's Changing Everything

Here's where transit loyalty gets really clever. King County's reward points aren't just for bus passes – they work with Bird, Lime, and Link scooter/bike shares. It's Mobility-as-a-Service thinking, where public transit becomes one node in a larger network.

This partnership approach solves multiple problems at once. It acknowledges that people use multiple transportation modes (instead of pretending they don't). It creates more redemption opportunities (keeping points valuable and engaging). And it positions transit as the hub of a broader mobility ecosystem rather than a standalone service.

Some programs let you spend points at local merchants or on rideshare vouchers. Suddenly, your bus commute is earning you coffee money or helping fund that last-mile scooter ride. It's the kind of ecosystem thinking that makes loyalty programs sticky.

The Experience Revolution (About Time)

Meanwhile, about 70 North American transit systems have launched formal customer experience programs. This isn't just about loyalty points – it's about fixing the fundamental product.

L.A. Metro's $200+ million CX plan deployed over 300 transit ambassadors to improve security and assistance on platforms. They're tackling the basics: cleanliness, safety, shelter, accurate information. Because here's the thing – you can't loyalty-program your way out of a fundamentally broken experience.

Early indicators suggest that better on-vehicle amenities (Wi-Fi, real-time info screens) and courtesy efforts are moving the satisfaction needle. It's like finally fixing your website's loading speed before trying to optimize conversion rates.

The Sustainability Angle That Actually Works

This is where transit agencies have a natural advantage over other loyalty programs. Every trip genuinely is better for the environment, and riders actually care about that.

STM markets every round-trip as equivalent to one tree's annual carbon benefit. Their virtual tree system isn't just cute – it's tapping into riders' desire to make a difference. The agency explicitly positions transit as the cool, climate-conscious choice for young adults.

The emotional payoff is real. Many young Montreal users reported feeling good about choosing transit and passing that message on to friends. It's purpose-driven marketing that doesn't feel forced because the environmental benefit is genuine.

What This Means for Marketers

So why should marketers care about transit loyalty programs? Because they're proving that loyalty principles work everywhere – even in industries that have traditionally been commodity-focused.

The lessons here apply way beyond transportation. When you're facing increased competition (like transit agencies competing with rideshares), the answer isn't just better pricing or features. It's about creating emotional connection, reducing friction, and building systems that reward ongoing engagement.

Research from BCG shows that top loyalty program members across industries spend 50% more with the brand. Transit agencies are discovering this firsthand – and they're doing it with audiences that span every demographic and income level.

The Road Ahead (Pun Intended)

Transit loyalty programs are still in their early days, but the foundations are solid. They're solving real problems (retention, engagement, experience) with proven methods (personalization, partnerships, gamification).

The most successful programs are those that acknowledge the complexity of modern mobility while making the experience simpler and more rewarding. They're not trying to be everything to everyone – they're focusing on being the best option for the trips they serve well.

For marketers, there's something inspiring about watching an industry finally embrace customer-centric thinking. Transit agencies are learning to compete on experience, not just coverage. They're building relationships, not just moving people from point A to point B.

And you know what? It's working. When people feel valued and rewarded for their choices, they stick around. Whether that's choosing your coffee shop, your airline, or your bus route, the fundamentals remain the same.

The loyalty revolution has finally reached public transit. For an industry that moves millions of people every day, that's a pretty big deal. And for marketers watching from the sidelines, it's a masterclass in applying timeless principles to unexpected places.

Sometimes the best marketing innovations happen where you least expect them. Who knew the future of loyalty programs might be rumbling down the street, one bus stop at a time?