Technology is enabling new businesses with new ideas to deliver new transport products and services that customers prefer, writes Alex Burrows

 

bridj_appBridj is an app-based, dynamic bus service for commuters in Boston

 

A number of recent statements and articles have discussed potential changes entering the transport sector, that disruptive technologies and services might alter the sector as we know it. But let’s be clear from the outset, the world is changing fast, and transport and how we travel will fundamentally change.

We can look to a number of other sectors and industries that have evolved at a rapid pace, because they have had to. We can instantly think of communications, the arrival of mobile phones, then smartphones – not just the actual technology but how we went about using it. Calling and texting swiftly moved on to photos, videos, then basic information, the internet, apps and now the whole suite of capabilities in a single device that sits in our pocket and has the ability to do a whole lot more.

But that ‘whole lot more’ is not yet happening and transport is one of the imminent areas of major opportunity. OK, I can buy the odd m-ticket, I can get real time information (to a degree), I can book my Uber and know the driver, the car and its registration before they arrive (while tracking their progress). But this is really the first phase of the disruption for how we go about doing transport.

There are two elements to how we will see this real change. The first is the technology, the penetration of smartphones across the population continues to increase hugely but we must not rely solely on them, the technology must be universally accessible in new and innovative ways. A number of new products and services are emerging that are changing how we travel and what we expect from the experience. The rise of the sharing economy, the changing preferences of the millennials for on-demand mobility rather than the long term commitment of a season ticket or car ownership, the pop-up transit solutions using data analytics to design a bus route based on the actual demand, and there are plenty of other examples.

The second area is around business models for transport and the regulation of transport. A lack of flexibility has been a pre-requisite with fixed networks, fixed timetables, fixed prices and ownership or purchase of access to a single mode, which have ensured that our mobility opportunities are inflexible, not on-demand and not personalised. This will have to change.

We talk a lot about intelligent mobility and I hope many readers will already be aware of it (our recent paper, Journeys of the Future, can give you some background). The rise of intelligent mobility is the recognition that transport needs to change in two critical areas – putting the user experience at the heart of everything, and integrating the transport system so the user is presented with a complete network in a simple manner.

The deployment of intelligent mobility does not rely solely on technology, but instead on innovation that is bringing new types of mobility opportunity, new business models, new market opportunities and ultimately new preferences and expectations from us the travelling public. Parts of our sector are convincing themselves that this disruption isn’t going to transform how we go about doing transport because they perceive intelligent mobility as apps. Apps that will give better information, new methods for choosing and buying tickets, new channels of communication and so on. But those are merely the symptoms of the much wider transformative deployment of intelligent mobility.

As I write this, MINI is launching a new model and announcing that it is collaborating with its parent company BMW’s partnership with Sixt, that operates DriveNow (see panel), to allow MINI owners to rent out their cars to members of the public. This is a prime example of both the sharing economy in action and of the changing expectations of transport users in how they choose to travel.

A look at other automotive manufacturers shows this isn’t BMW acting as an outlier. Moovel, owned by Daimler, is an integrated mobility platform that offers a joined-up service for travellers using its Car2Go and Ridescout businesses – and, importantly, its fleet of Smart cars. The global car manufacturing giant Ford is running a number of mobility experiments, including car-sharing, ride-sharing, dynamic, premium minibus services and e-bikes.

Meanwhile, in France, SNCF is introducing its IDPass which is focused on integrating multiple modes of transport (including public transport as well as parking, and bike, lift and car-sharing) into one digital service for its customers.

What does this actually mean – what is the transport sector going to look like?

There is a battle going on. As new entrants come into the transport sector the traditional businesses are starting to respond. As I just mentioned above, Ford, BMW, Daimler and SNCF are all looking beyond their traditional sectors of the transport market and are focusing on the individual customer and their whole journey experience. That is the key and that is why this all fits under the moniker of intelligent mobility. The customer, every single customer, and their individual requirements should be met by the mobility opportunities made available to them. It is no longer sufficient for transport organisations to build and run a supply of fixed transport and wait for users to take advantage as they try and navigate their way along their journeys.

Instead, technology is enabling new businesses with new ideas to deliver new products and services that customers prefer. And this trend is growing. The Washington Post ran an article last week with the headline ‘Buying a car could soon be a thing of the past, and Ford is desperate to find what’s next’. In the last 12 months we have seen an explosion in the use and visibility of sharing economy businesses with Airbnb leading the charge, but other businesses such as Liftshare, Zipcar, DriveNow, BlaBlaCar, Bridj and many others using new technologies to innovate and deliver services that are resonating with current social and economic trends.

In my opinion, the transport sector needs to look at the core offering and where its talents and experience can be best utilised. One disruption in the structure of the sector may be the division of businesses between network managers and operators on the one hand and customer-facing mobility providers on the other. In between the two is a space for dynamic and sharing businesses that do not need to rely on fixed networks and major infrastructure. They can fill the gaps in the transport network and ensure everyone has connectivity into our transport system.

In the near term, expect the gradual erosion of the traditional transport sector’s stranglehold over our means of mobility. Those that don’t want to share their data and integrate their offerings with others for the benefits of the customer will disappear. One thing is certain and that is we are only at the beginning of the process of disruption for the transport sector.

 

NEW APPROACHES:

 

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Moovel – Providing an integrated mobility solution

Based in Germany, Moovel is an innovative new service from Daimler integrating a journey planning comparison tool with the ability to book journeys across the whole of the country. It covers all public transport modes, private cars, as well as cycle share schemes, Car2Go (the leading German car hire service and part of Moovel) and mytaxi, the original taxi app.

 

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DriveNow – Demonstrating access over ownership

DriveNow marks BMW’s entry into the car-share market in a joint venture with Sixt. The service began in Munich in 2011 and now covers five German cities as well as San Francisco – and most recently launched in north London at the end of 2014. The service is targeted at spontaneous, short trips in and around north London and is competitively priced against other modes (such as Uber or a black cab) at 39p a minute and capped at £20 an hour. DriveNow provides members with access to a car on demand without the need for planning in advance and specifying a set time for booking as well as an all-inclusive service and complete flexibility for dropping off the car when it is no longer required.

 

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Bridj – App-based, dynamic bus service for commuters

Boston-based Bridj is delivering dynamic, data-driven bus routes. Rather than static bus routes, Bridj uses big data and user demand to determine appropriate bus routings. Targeted at commuters, the service allows users to specify a start and end point for their journey along with an arrival time. The app then identifies an appropriate route, based on the needs of other users and allows the user to pay in-app. During the journey, the service monitors traffic and changes the route as necessary.

 

ABOUT THE AUTHOR:

Alex Burrows is a client director in Atkins’ transportation business responsible for overseeing Atkins’ relationships and accounts with the Department for Transport and wider central government. Alex also works with Atkins’ Intelligent Mobility team specialising in Mobility as a Service and strategic and future transport issues. Alex has previously held roles with the Transport Systems Catapult and Centro.
@alexcburrows

 

This article appears inside the latest issue of Passenger Transport.

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