The rail industry is a relatively complex and capital-intensive one for businesses to enter and develop market share in. The railways are expensive to build and maintain, buying and running trains requires a significant initial outlay, while the cost of research and product development is much greater than many other sectors.
Much of this is due to the sheer cost of infrastructure, the scale of railways as a mode of mass transit over long distances, the safety-critical requirements and technical standards set to effectively regulate railway operations, and the need to deliver a suitably long design life to make the investment worthwhile.
However this does not mean that the rail industry and railway networks will remain static and inflexible to changing trends in society. Megatrends such as the increasing urbanisation of the global population, and the growing impact of climate change, are changing behaviours and creating the need for responses from the rail industry. Those responses are happening, Alstom recently launched the world’s first hydrogen fuel cell train in Germany and plenty more energy efficiency innovations are being developed across the rail industry.
But the most interesting and visible opportunities are targeted on improving the passenger experience for everyone travelling by rail. These opportunities can generate huge positive impacts for how travellers experience rail travel and ensure we continue the growth in demand and ensure continuing investment in our rail networks. There are a number of key areas where disruption could fundamentally change how passengers both use and interact with the railway:
- how passengers plan their journeys to and from rail stations as well as their actual journeys (including navigating interchanges and route options);
- the fares offered and types of ticket available, as well as the form the ticket takes (paper, barcode, season ticket, carnet etc);
- the availability of live journey information as well as personalised information and wider opportunities to enhance the journey for every passenger.
Our expectations of how we use and interact with the rail network are changing. In just the last few years we have seen the development of a new interface between rail operators and passengers with social media providing a new, instant medium of communication. Twitter in particular has provided the ability for real time information on live network issues and a place for passengers to engage with train operators directly and in public.
But more than just the development of technology, and the increasing use of smartphones and wifi, allowing passengers to be always connected, is the greater opportunity to bring together all aspects of travel into one place and shaped around each individual user and their specific requirements. This single interface, total integration approach is driving the development of Mobility as a Service.
How can Mobility as a Service change our transport provision?
Mobility as a Service (MaaS) brings major opportunities for transport networks and how they deliver services to their customers:
(1) Customer-centric: MaaS creates a step-change in the relationship between the transport user and the transport networks. The passenger will no longer have transport ‘done to them’ in terms of having to navigate a static transport network offering a range of different modes, tickets, fares and timetables. Instead, MaaS provides a dynamic service that is individually tailored for each customer according to their specific needs for that journey.
(2) Access over ownership: Instead of having to absorb the capital expense of upfront payments for buying a car or a season ticket, the passenger can instead buy into a service model of provision that can focus on the outcome – instead of investing in one mode of transport and owning that as a fixed asset, the user can instead pay for the ability to make the requisite journeys. MaaS allows the user to purchase the opportunity to travel without the commitment to only one specific mode of transport but instead providing the access to whichever mode is best suited to the journey.
(3) Making transport equitable: We often find that car ownership does not provide the right solution for every journey we wish to make; likewise the rail season ticket may not allow us to take every rail journey we need. Designed correctly, the MaaS model will allow an effective subscription that is tailored for every individual that allows them to pay for the mobility opportunities that they actually use. This provides a far more equitable means of access to mobility by providing the best value without requiring significant investment in a car or a season ticket.
Taken together these three features of MaaS provide a methodology for improved provision of, and access to, transport services. Alongside this will be prime opportunities to use MaaS to nudge traveller behaviours in order to support policy objectives including use of more sustainable transport modes, reducing emissions and improving air quality, greater use of public transport or active travel modes and many more.
The adoption of MaaS is premised on an integrated transport offering to each individual transport user based on their specific requirements. As such, the MaaS model could be priced to reflect both the priorities of the passenger (speed, comfort, cost etc) as well as the relevant transport authority. For example, a city region may use a MaaS service provision to encourage more use of public transport modes by incentivising users via price mechanisms away from cars and onto rail. Additionally, MaaS pricing mechanisms could be dynamic, focusing on incentivising price-sensitive users to change their time of travel away from peak hours to try and smooth out demand for travel at rush hour.
The potential for MaaS to transform the rail sector for the benefit of passengers
A key principle to the success of MaaS is the provision of integrated transport services focused on individual passenger need. We often hear that autonomous vehicles will take over all transport but this is highly unlikely given the advantages that public transport brings in terms of capacity and efficiency.
However, it is time for the rail industry to get on the front foot and start to proactively address the opportunities that new technologies are bringing.
Within the last five years we have seen the rapid adoption of smartphones across the general population. This has brought a seismic shift in passenger behaviours and expectations. The customer now has a number of means of engaging directly with train operators as well as with other passengers. Social media has brought the ability for passengers to communicate their experience and to broadcast any issues with trains to a much wider audience in real time. In addition, this mass adoption of social media also offers the ability to use tools such as sentiment analysis and location tracking to develop a much richer understanding of how passengers are using and experiencing the rail network. The important point is that the benefits are not solely for passengers – the rail industry can derive huge benefits from passengers becoming much more vocal and proactive, with the aid of their smartphones, as this provides huge amounts of data that can be used to target passenger experience improvements.
One aspect that the rail industry must address is ‘constant connectivity’. In 2016, we expect to be able to access data networks on our smartphones at any time of day and in almost any location. The success of the railway as a mode of transport is in allowing passengers to use their time more comfortably and productively during their journey. Key to that is remaining connected for the duration of every journey.
On board wifi, live journey information and the space to work are minimum passenger expectations now. We need to see the train provide a platform for passenger connectivity, where passengers can work, rest and play as they require. This is relevant to MaaS as it will fundamentally shape the preferences and behaviours of passengers. Rail as a mode will lose out if it does not step up to the challenge of other modes, such as ridesharing in particular, and offer real value and clear benefits for passengers.
The rail sector could hugely benefit from the arrival of MaaS if it can address these 4 factors:
1. Integrating rail into the whole end-to-end passenger journey
The value proposition for MaaS lies in the individual user to be able to remain ‘modally agnostic’ i.e. they have no pre-commitment to any particular mode of transport, instead the system will offer the most appropriate opportunities based on the specific context of any particular journey. To this end, every rail journey must be integrated into the wider end-to-end journey offering in the most effective and simple manner in order to provide a competitive and compelling offer. Key to this is the journey planning and live information aspects of the journey as well as the payment and cost structure of allowing the user to select a rail journey over a car journey for example. This requires train operators to integrate their fare structures into a much wider system of journey design and delivery.
2. Developing a business model that recognises the value of a rail journey as one element of a complete passenger journey
Following on from the last point, the provision of rail services within a MaaS system will need operators to integrate their offering with alternative modes of transport with a requirement to compete on multiple measures (time, cost, comfort etc) which would be managed by the MaaS platform on behalf of each individual passenger. To this end, the business model for passenger rail operations within a MaaS system may lead to innovative new models and more variety in passenger experience offerings, including much more distinctive offerings that really differentiate and enhance the value of rail journeys compared to the experience with other modes of transport.
3. Delivering an improved passenger experience across the whole rail element of a journey, including through the station, interchange elements and access to and from stations
Through recognising and integrating each individual rail journey into the wider end-to-end journey for each passenger, the rail industry must take much more initiative in physically integrating the rail element of the journey into the whole journey as seamlessly as possible. Within a MaaS environment, each passenger will potentially be using multiple modes of transport and changing the way they travel more often to get a more appropriate offering for each particular journey. Accordingly, passengers may change their behaviours more often which will require better information and clearer guidance along the whole end-to-end journey. In addition for rail to reap benefits from MaaS it must target the passenger experience in order to highlight why it is such an effective mode of transport for the majority of people. To do this, the rail industry must make access onto the rail network, around the network and off the network onto other modes as easy to undertake as possible. Clear wayfinding and signage, easily-navigated interchanges, decent and accessible facilities and accurate, reliable live information are all critical parts of the passenger experience alongside the actual journey quality for everyone using the rail network.
4. Improving the on-train passenger experience
Rail travel needs to reinforce its position as the best way to cover distances in an easy, efficient and comfortable way. Rail will always have the major advantage of being a highly effective way of transporting lots of people over distances quickly and into congested areas far more effectively than with more individual modes of transport. Connecting in with MaaS it can also reinforce the point of improving transport equity, ensuring that good value travel is available to everyone.
But above that the quality of the journey must become a greater focus. The easiest way to develop that is recognising the variety of uses that passengers put their time to during a journey. So, more support for:
hi speed internet for browsing and social media; then making more of that content relevant to each user and using that data to provide improved services to passenegrs – both direct transport services and connected commercial services;
augmented reality; for those of us who always stare out of the window, make that window to the world more interactive, tell me what i am looking at, what its significance is, the history, the local services etc;
provide a closer link between the train service itself and the passenger; what is happening at the next stop? what services are available? what could i do if i took this journey next month?? the opportunities are unlimited to both get to know your passengers better and provide them with more opportunities as a result of taking the train – make it worthwhile to come back; make the train journey an experience rather than just a commodity service.
While the development of MaaS brings major opportunities and undoubtedly disruption, the final interesting area to explore is the structural impact that MaaS might have on the rail industry as a whole.
The emergence of mobility service providers
Train services may be integrated into a wider MaaS offering for individual customers which may see a structural split between the provision of rail capacity – which would be the infrastructure and the train services – and the provision of mobility service providers – who would act as a broker purchasing capacity on train services for their individual MaaS customers. As a customer, I would have my monthly MaaS contract allowing me to use a specified range of transport options and the ability to top up or to upgrade as I felt. My contractual relationship would be with the service provider and they would be responsible for contracting with the train company to deliver me my seat. Then there are also the further commercial opportunities beyond that…
Development of new business models including procuring outcomes and service agreements
If we see a new paradigm emerging with MaaS, it might look something like this:
Infrastructure and Services – the trains and the railway network
Mobility Service Providers (MSPs) – the brokers connecting the supply with the demand
Travellers – us, the general public providing the transport demand
This has the potential for MSPs to become major companies brokering transport provision on behalf of the economic buyers – be they individuals, companies, tour groups, councils etc. This could also allow for infrastructure and services to become more responsive to actual demand but also allow for policy interventions to be backed up with the MSPs using nudge techniques and incentives to ensure that supply is used as efficiently as possible in order to reduce waste and ensure value for money.
Greater integration of rail with other modes
Ultimately, the important part is to consider how the railway can thrive in the emerging world of new technologies that are developing major transport innovations including Mobility as a Service. The critical element is ensuring that rail is integrated into the whole journey, customer-centric approach that MaaS is focused on. More importantly, rail is well-placed to support transport equity and ensure that people can afford to travel.
For MaaS to work it needs to provide good value and a whole journey approach that wraps the customer in an easy-to-use focused approach enabling them to get on with their lives. Rail will play a vital part in that – providing the backbone of many many journeys that need the innovation to happen at either end of the rail journey where the distribution of journeys suddenly explodes into a multitude of options.
I firmly believe that rail is not at risk from the emergence of autonomous vehicles and other new transport technologies and trends. But it must modernise its approach to passenger experience and customer service. And it must feel more modern and be perceived as modern in the 21st century.
That is a relatively easy challenge to address. It must also include permanent connectivity for passengers and think much harder about how people go about their lives and how it could fit into that more easily.
Finally, the railway needs to consider the major disruptions that will surely come in terms of industry structure, business models, ways of operating and regulation. And it must consider it within the wider transport system of systems and not in a piecemeal manner – that is probably the most critical point of all.
Alex Burrows, CEO, TravelSpirit Foundation