Keeping up with the other modes

This article was first published in Rail Professional

Rail companies in Britain have transformed dramatically since the golden age of rail when shorter journey times and the lower cost of travel meant rail became accessible to the mass market. Yet since then, the nature of rail travel itself has remained relatively unchanged.

There has been investment to make trains more comfortable and to increase their speed (especially on intercity routes) as well as to provide more routes, but much less has been invested in incorporating new technologies into the sector which could make rail travel more attractive.

There is a real need now to look at how rail travel can play a bigger part in meeting the nation’s transport needs. This is particularly important in the light of policy developments such as the Government’s plans to ban the sale of petrol and diesel cars by 2040 to reduce the health risks caused by pollution. Equally, with many cities clamping down on the use of polluting vehicles by charging users high fees or imposing outright bans, drivers will be looking for alternatives.

These developments are clearly going to drive change in the transport sector and they will be reinforced by wider social change such as changing attitudes towards car ownership (particularly for millennials). This creates a real opportunity for rail companies to respond and transform the service they offer to meet changing needs.

However, if rail travel is to provide a viable alternative to the car it needs to be integrated with other modes, easy to use and be responsive to customer needs. One technology that can help do this is smart ticketing. The technology to do this was first introduced 15 years ago and can provide customers with a way to travel without a paper ticket and to simplify how people plan, pay for and make journeys.

Yet, despite this and the demand for a contactless system, passengers have seen little progress in being able to access these kind of user friendly systems across the rail network. Yet there are examples of how it can be done successfully. These include the flexible ticketing schemes introduced by South East Flexible Ticketing Programme and Transport for West Midlands, which have made the necessary changes to their infrastructure to make the systems work. These schemes have put in place essential back office systems that have enabled train operators to offer new electronic tickets to their customers.

Disrupting modes of travel

One of the reasons these new technologies have been adopted slowly is that the transport sector has long been seen as a rather traditional business which does not embrace new ways of doing things. That is all changing, and now we are now seeing the arrival of a range of providers who can disrupt conventional approaches and business models.

A number of new operators have emerged, seemingly from nowhere, backed by significant investment and they seem to have more ambition to do things differently than the existing operators.

Some of these developments can be seen in bike rental in major cities. The ‘Boris Bikes’ have a monopoly in London, but competitors are beginning to emerge in other cities. Oxford, with one of the largest numbers of cyclists in the country, has many innovative ways of pedalling around the city. An example is ‘Mobike’ – which is a pay-per-use bike hire scheme that requires no fixed infrastructure to dock the bike.

However, it is in taxi services where the most dramatic market disruption has occurred. Walking through Leicester Square at 5pm provides a very clear illustration of how quickly the dominance of ride sharing services like Uber has emerged. There are also new developments where travellers can use an app that also accepts digital payment, providing a new convenient way of planning and paying for journeys. One example is Trainline which has developed at pace recently to provide a more seamless experience to users. Even a quick journey plan using the Citymapper app in London allows users to choose a ‘Smart Ride’ – a ride sharing initiative that is more like dial-a-ride than a conventional bus or taxi.

What is critical to the development of these new providers is the way they are responding to the fact that we now have easy access to so much more information about our journeys. Users can easily calculate the distance, cost and time of their journey using their smart phones. That has altered customer expectations and demands and this shift in behaviour needs to be addressed in the public transport sector if it is to compete.

That is difficult because traditionally, public transport authorities have been slow to respond to change. In particular, they have found it hard to provide the right regulatory approaches that enable new services to be provided while ensuring they are safe. There are real challenges here and the authorities will need to put the right infrastructure and management in place to guarantee the traveling public are as safe in an Uber as a black cab and that our city centres are not flooded by excess hire bikes, as seen in Beijing recently.

Rethinking the passenger experience

A major challenge for rail operators is modal-integration. Most train stations have a taxi rank and a bus stop, but the integration stops there. The emergence of Mobility as a Service (MaaS), where different modes of transport are combined together as a pre-paid bundle of services has the potential to drive integration via third party applications, disruptive modes and public transport services.

Development of this innovative new model should be considered a critical task for transport authorities and operators. MaaS can provide huge benefits: travel will become more affordable, accessible, less polluting, this list goes on. The principle is simple, and much akin to how many people pay for their mobile phone service; each user can pre-pay for a package of services (that could include for example, a number of bus rides, a set number of hours of bike hire, car-sharing journeys, or even a number of taxi rides). An app then allows the user to make use of these services throughout the month – all with the confidence that they will not exceed their monthly transport budget.

From the Department of Transport to the operators in our towns, cities, and regions, there is a real need to put in place the commercial and regulatory arrangements that will drive these new approaches to public transport. As the only truly national transport network, rail should be at the leading edge of this work.

There is significant potential for revenue growth by supporting better integration. One way to do this is by making payments easier and the experience of the Oyster payment system in London shows that it can lead to increases in usage.

Closing the information gap

The challenge now is to support innovation and new ideas but ensure that the industry does not adopt a fragmented or even contradictory approach which creates confusion and damages customer experience.

This means that integrated journeys will only be possible if there is collaboration between policy makers and local transport authorities. There needs to be a clear flow of information between them and there is a clear lesson form the development of Oyster cards in London which was only possible because the city has a single, controlling authority across all transport modes.

MaaS can revolutionise the transport sector but only if it is seamless. The first and last mile are key, where travellers need to make a choice about what mode of transport to use to take them to their final destination. If that journey involves rail there is a real opportunity for train operators to provide passengers with attractive options that provide an easy way for them to complete their journey. What is needed is a willingness to invest in and adopt the new disruptive approaches that are being seen across other modes of transport.

Mike Wallace is a transport and ticketing expert at PA Consulting Group