Abellio’s Mike Kean has called for the rail industry to consider whether to relinquish control over its relationship with customers to technology firms

 

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Chancellor George Osborne announced that Transport for the North will be established as a statutory body in his summer budget last week, creating a new regional transport superpower.

A leading transport executive has called for the rail industry to consider wether to relinquish control over its relationship with customers to technology firms.

Speaking before last month’s launch of Apple Pay contactless mobile payment for public transport in London, Abellio’s rail business development director Mike Kean warned that warned that new services being made possible by the rapid development and convergence of mobile technology and big data analytics presented an “opportunity and a threat” for train operators.

Keen predicted that in the near future firms such as Google and Apple will be offering services which seek to wrest control of the relationship with passengers from train operators. Within a year, he forecast that both companies will have integrated existing automatic journey planning tools such as Google Now with contactless mobile payment capability. The integrated service would scan account holders’ emails for meeting dates, log them in their calendar, plan their journey and ask them if they want to pre-purchase a ticket, with smartphones used to open ticket gates.

“One of my big threats and opportunities to the industry is at what point does it horizonatally separate, at what point does Google or Apple or one of these big integrators own that customer data and the railway itself just becomes a commodity provider of transport,” Kean told a conference in London this month. “Customers don’t care who owns the relationship with them, what they care about is the experience they are given, and the computer held in their hand is driving that experience and interacting with them daily.”

He told Passenger Transport that it was very possible to envisage a situation within 2-5 years where many customers decide it is more attractive to view third parties rather than operators as their principal source of information and ticketing services.

For example, as well as real time journey planning, a major technology integrator could offer to automatically pursue compensation claims on its customers’ behalf, use its power as a provider of tickets to large numbers of passengers to negotiate travel benefits from operators, and provide personalised adverts and offers to customers on points of interest throughout their door-to-door journey. Technology firms’ revenue would be driven by smart personalised advertising similar to the futuristic techniques in the film Minority Report, which Kean described as “not far away”, rather than ticket sales commission.

Kean said Abellio had started to create innovative services which are beginning to take advantage of the capabilities offered by new technology and data analytics, for example, a real time journey planning app, including information on where trains have spare seats, and, in the Netherlands, post-pay travel accounts. New projects include investigating billing through tracking customers’ phones.

However, rather than automatically fight the threat posed by major technology integrators, Kean said there
was “a reasonable debate” to be had within the industry over whether there may be business advantages for technology firms rather than operators to ‘own’ relationships with customers.

For example, he envisaged the “brand halo” effect that companies such as Google or Apple enjoy could potentially attract additional business to the railway and help reduce dissatisfaction during service disruption. “Part of me says just let it go,” he said.

He added that if the industry took the strategic decision to retain control of its customer relationships rather than act as a commodity supplier, it needed to move fast. “There are big players that will start to come into that market and take the customer with them,” he said.

 

This article appears inside the latest issue of Passenger Transport.

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