Revenue retention has become Bus Operators number one priority as passenger numbers in England continue to fall. Have market disruptors changed passenger expectation so significantly that only a major rethink will bring people back to constrained bus services? Steve Reeves gives a personal view of current and changing market challenges .
David Begg’s summation at the 2017 UK Bus Summit made an interesting point. Bus Companies do not know their customers! In a battle for passenger retention, this is a significant disadvantage.
Capturing passenger data is an element of the smart-ticketing process. Fitting buses with Wi-Fi also supports data collection where free access requires a log-in so, it can be done, but why is it so important?
By 2020 68% of adults will be daily users of the mobile internet and 60% of those, will use mobile social networking apps.
At the same time; 50 billion 'things' will have connected to the web. Through smart technology our synthesis with products and services is changing elastically- we cannot predict its scale or shape.
To mitigate the risk of uncertainty and leverage the opportunity brought by enhanced communication disruptive businesses invest in two things. Firstly, software that integrates third party entities into a single brand combined with payment and customer data platform singularity and secondly; through the provision of excellent and cost-effective user experiences. By publicising the user experience, new customers are tempted to download the App and try the service.
A recent PwC passenger trends report states that over half of bus riders surveyed in the 18-35 age group want to see WiFi on buses. A similar US survey found that 97% of passengers who have smartphones, planned to use them on and while waiting for the bus.
A word now exists that describes the feeling smartphone users experience when disconnected; that word is nomophobia. Students are found to be most susceptible to this condition; it is no surprise therefore that access to free Wi-Fi is an essential component in many buying decisions.
Bus design experts will be challenged to create bus layouts that are attractive homogeneous and relevant to the way in which we behave in this interconnected world.
Significant change may not be possible on large transit buses meeting peak hour demands. Smaller Direct Responsive Transport (DRT)' usually associated with dial-a-ride type services, share-ride and rural buses can benefit from more radical changes as they reach for markets needing new mobility solutions. Seating comfort, light pollution management, climate systems (removing fogged-up windows) and a smoother ride come to mind. There is nothing more frustrating (and possibly more dangerous) than using a touch screen while standing on a bus, the balance between seating and standing may need to change.
Smartphones integrated with textually rich and compelling new passenger information signage (on the bus and at each stage) may encourage people to use buses. Even without integration smart signage has a positive impact; Experts are pushing for the publication of information related to connecting intermodal services. This is only possible if Bus Companies can work more closely with other forms of transport, this should be encouraged.
Mobility as a Service (MaaS) is an idea that extols the end-to-end journey using shared transport systems; to work it requires integration between different modes; this may include share rides and car clubs. Single ticketing helps make MaaS possible; it can also improve the passenger's journey experience. Evidence suggests that the promotion of end-to-end services is the next step for the disruptive business like Uber.
The ‘single-ticketing’ of multimodal journeys works for service providers because total control of the supply chain ultimately results in lower fixed costs. Selling prices can be calculated on a 'firm and fixed' or dynamic model particularly when bundles of trips have been purchased wholesale.
Service providers with the ability to apply cost pressure on even a single trip component can create lower than current market value solutions where each trip segment is purchased separately. With private hire operators forming the backbone of App-driven transport networks it is not difficult to understand how this can be made to work.
This strategy can leverage share riding and even social entrepreneurial services in the push to change mobility into an end to end service controlled by the ticket provider.
TfL has already delivered similar services using the Oyster platform; TfGM will sight single ticketing as a primary reason for the introduction of a bus franchising model.
The ultimate enemy of the Bus must be the car in whatever form it takes!
Figures quoted by TfgM in their future planning literature, state that; half of all trips made are under 2Km and that 38% of those trips or made by car. 50% of all adults do not get the recommended minimum amount of physical activity. When asked why people use their cars for journeys that could otherwise be managed using other forms of transport they give extraneous answers that correlate with their perception of individual status and their need to be in control. “Those with most share least”.
Many drivers with a personal car option believe that buses are, for them, the transport system of last resort. People that have no 'better' option use buses, “those with least share most”. These attitudes do not help city planners with congestion, and clean air challenges.
How do we change these attitudes?
Adobe’s 2017 report into digital trends deals with keeping up with customer expectations; it is an excellent reference piece for company development people trying to draw on current marketing trends to grow their businesses. Adobe has an insight into real world changes; it validates the reports finding through its understanding of how people use Adobe products and services.
In their report, Adobe highlights the challenge in keeping up with customer expectations driven in many cases by industry disruptors such as Uber; this is because market disrupters have made their services, simple to use, relevant, flexible and importantly, they provide a level of personal control and choice.
Uber has succeeded in changing passenger mindsets by engaging with them through simple to download and use applications. The Adobe report goes on to explain that 23 % of companies surveyed will in now place their greatest effort into selling ‘valuable’ experiences ahead of cost, efficiency and service".
Bus Companies are experimenting. Trailblazing services such as Stage Coaches 'Little and Often' and TransDevs Bristol based 'Slide' project have come from bus backgrounds. There are also council services such as Simply Connects new DRT Service experiment in Exeter. Stage Coach is utilising low-floor Mercedes van conversions to provide high-frequency scheduling, almost no need for a timetable, the TransDev project is a Direct Responsive Service (DRT), the 'bus' is a VW T6 minibus.
Have these services been delivered with customer experience at the centre of the strategy and if so will that be enough to achieve commercial viability? Or; have the operators created a service model based on the traditional bus values of reliability above experience?
Are the vehicles selected going to deliver something people will enjoy?
When we look at the evolving changes highlighted above, we might assume that the one size fits all bus model won’t survive in its current format because ‘big-bus’ on its own won’t (can't) meet the ‘control’, and ‘personalisation’ experiences users may be seeking.
Those with ‘least’ may want to stick with the bus. Those with ‘more’ may be enticed from their cars, but will it be for the bus? We doubt it!
To affect positive market change, Bus Companies need to become increasingly involved in the integrated transport agenda.
As trusted public service providers, Bus Operators maintain a unique 'special' status. However, it is the IOT leveraging businesses who are starting to factor intermodal services such as coach and train travel into their selling proposition. Added to this they are also growing incrementally with additional services such as Uber Access and Uber Hop, increasing the level choice feeds the interoperable model because these shifts in service provision help to maintain customer strategic data growth.
Today Bus business will continue with the heavy lifting; only they have the resources to provide mass road transit at peak times. During the remainder of the day buses are running under capacity, how long will society accept that large buses are running nearly empty on congested roads? Can bus size appropriation be part of better service provision?
Could a new type of vehicle that is smaller, responsive in service delivery, connected and offering car-like interiors be the saviour of shared public transport? This product doesn't currently exist. It needs to be DDA compliant and will cost more than a minivan, however, its conception is not hard to envisage.
Smaller custom built DRT buses can challenge bus and journey time reliability prejudices putting slick bus operators in a favourable position from where they can leverage their strength in the battle for customer patronage. Bus Company run, DRT service could be customised to offer personalisation and user control, but they can also be used to feed integrated fixed-route services inside and outside their product offering.
It is true that this is not a new idea and that bus company have attempted DRT private hire type services before and fallen short. Today there are key environmental and technological changes affecting the landscape that may make further analysis of the Private Hire DRT and ride sharing idea worthwhile,
Uber uses that data to create new services such as integrated single tickets driving targeted multi-modal end to end services.
When a market fails - Regulate?
Road congestion has aligned the stars for Disruptive Transport and Train companies alike.
We stand witness to the increasing number of private hire vehicles carrying single occupants in a variety of vehicles some hardly fit for purpose but all taking the risk for their operators. Taxi companies struggle to compete with the dynamic pricing model, while the bus is losing out because its service (outside of London) appears to become outmoded.
When a market fails to the detriment of its societies needs and ambitions, regulation is an accessible alternative. Before this can happen, the choices must be understood. Simply regulating to maintain the status quo doesn’t make sense, we would lose an opportunity for real improvement and a better commuting experience.
Is it possible that Bus Companies could underpin an intermodal public transit system? What's needed is a system that provides an open source of ticketing and transport data this way we all share in a multimodal transport network that provides a selection of travel and experience options? Regulation and funding will be needed to deliver fast changes and to encourage service providers to invest in new methods of service provision. If the cost of the driver remains the primary cost of the service then
The ‘one size fits all’ solution combined with disruptive competition, public service cuts and congestion is 'doing' for bus services especially outside of London. Only a laggard would hold onto what is failing by relying on regulation for its maintenance. If nothing changes the risk of a future chaotic transport solution growing organically and serviced by those with low rate qualifications will ultimately fall victim to the harsh rules of supply and demand; that collapse will probably come too late for operators that failed to diversify.