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A customer centric future for intermodality

Posted: 22 February 2017 | | No comments yet

Intermodality is often described as using two or more modes of transportation in a single journey. For some, however, this is merely considered one example of intermodality – also known as a ‘travel chain’. Pekka Möttö, CEO of Tuup Oy1, shares in this article his vision of what constitutes intermodality in the modern world, explaining how approaching the subject from a passenger perspective is the only way to effectively cater for their needs and ensure the future success of public transport.

intermodality

I view the world through the customers’ eyes and therefore believe that there is no such thing as a need for an intermodal travel chain. Customers simply want mobility via the best mode possible in a variety of situations that necessitate different actions. In other words, customers’ intermodality needs are more comprehensive than simply combining different modes in one journey. Intermodality in this sense refers to the variety of options of getting from A to B – in as easy a way possible. Whether or not a single journey combines more than one mode of transport is irrelevant.

Tuup was founded to meet the mobility needs of the customer. This, by definition, required an intermodal approach. Whether or not someone owns a vehicle, the need for mobility is not fixed. To own a car may be the best and most feasible solution today, but tomorrow the need may be for something else, due to such issues as congestion, parking problems, environmental awareness, fear of driving, cost, the lack of access to a vehicle, you name it. It is not the industry’s business to know why someone is using mobility services. However, it is our business to provide such services so that people are more eager to leave their car at home and use such services more frequently; this includes letting the customer decide which services will live and which won’t. In theory, this is simple. In practise, a lot of the industry remains mentally stuck in the golden 1970s.

The fact is that the customer cannot be owned. Accepting this is the first step on a path of building an intermodal mobility service infrastructure. It is understandable that those who have traditionally ‘owned’ the customer, are unwilling to accept this. However, my experience is that dominant market players do realise the imminent development toward a more customer-oriented market, but too many have false aspirations to be ‘king of the hill’ and take advantage without sharing the market. This is simply not feasible in the modern world and I believe it is critical to create an atmosphere where the transport industry considers other players as partners, rather than competitors. Increasing the size of the cake should be the aim – not simply trying to snatch a bigger piece of the same old one.

Are regulations a help or hindrance?

Regulation can be an angel or a demon. I am a believer in centralised planning because public transport needs to have an acceptable level of service outside the profitable corridors. Regulation can be to the detriment of customers, however, when it inadvertently blocks new innovative services or creates a situation where a sole right has been granted to a company that delivers poor quality and/or at a high price. But how does this impact intermodality? The answer is simple: when regulation leads to poor service of traditional public transport, the possibilities for other mobility service providers grow weaker since the use of mobility services in general becomes less attractive. I believe it is of utmost importance to ensure that single dominant operators cannot harm the whole service ecosystem by refusing to co-operate in intermodality. If one operator is delivering poor quality, they should understand that in so doing, they not only harm the customer but also themselves, as well as every partner in the ecosystem. On a practical level regulation is exceptionally important when it comes to small capacity units – i.e. taxis. The whole existence of a properly functioning customer-oriented intermodal mobility service ecosystem is critically dependent on a competitive taxi market, or some other affordable solution for the ‘first-mile last-mile’ problem.

Why is mobility becoming flexible and intermodal?

Simply because it’s possible. The transport system has traditionally been product-oriented for the simple reason that other options have not been available. People’s mobility needs have always been flexible and individual, but customers have adjusted their behaviour to suit what is on offer and – all too often – the most convenient mobility option is their own car. Digitalisation has changed this basic dilemma. Digital solutions combine the collation of customers’ individual mobility needs with the ability to meet them efficiently. In addition to this, digital solutions enable new service providers to reach customers directly. These service providers can be new players in an old market but also, more importantly, new kinds of services and new business models in both the traditional fields or totally new sharing-based businesses. This emergence of new services creates an information problem. Each new service means another application for the customer and it is hard and inconvenient to keep abreast of all the options. Who wants to use dozens of apps for their mobility needs? Who has the time and energy to undertake the task of sorting through the numerous possibilities? Who can compare them or actually take advantage of the growing multimodal service offerings? Only a few – for the masses the equation has too many variables. This leads to an unsatisfactory outcome for all parties. Mobility service providers fail to reach their potential customer base and the customers lose the benefits of more flexible services. This information problem needs to be solved, and there are several companies, Tuup among them, working on a solution.

The theory of building an app which plans the route and presents available alternative services is straightforward. Timetable information is increasingly available and can be obtained either from open sources or by scraping. Creating a route planner when you have the timetable information is easily achievable. The more challenging aspect begins when you add other services to the scheduled public transport system. The first thing to consider is in which order to present the options and how to value them in various situations ­– walking, bike, bus, tram, metro, train, shared car, rental, own car/parking? The list is long and will get longer in the near future. There is an obvious temptation to pick the easiest route and emphasise the traditional public transport. This may be the best angle to reach the masses, but it involves the same old basic idea of creating a product-oriented offering.

An intelligent way of solving the information problem is to personalise the route planner. This can be done in two basic fashions; the easiest being to ask the customer for their individual preferences. Asking sufficient questions of a huge mass of customers is impractical, however, because the masses are not willing or interested enough to go through the process of providing the amount of information needed for the purpose. An interesting way of personalising is the hard way of analysing customers’ actual behaviour and refining this data into useful understanding of an individual’s preferences. In my opinion, the ultimate route planning tool should be intelligent enough to nudge the customer to the offering that best suits their personal preferences. Incidentally, our company name ‘Tuup’ is a Finnish variant of ‘nudge’. Tuup uses its founding shareholder Strafica’s modelling capability to tackle the problem of understanding the individual customer better. This modelling can also be used to provide information for the authority or transport operator to improve its overall service offering to better meet actual customer needs.

A multimodal route planner is the first step toward a customer-oriented intermodal mobility assistant. The next logical step is the apps that enable payment in addition to route planning. The customer wants ease and it is our obligation as the transport industry to offer this.

There are significant obstacles to the existence of an app that can offer an entire mobility package from planning through to payment. Technical challenges are created by non-standardised IT systems. A unique API for each service provider represents a swamp that needs to be drained, but essentially this is a mere technical issue and will therefore be solved in the near future. The real challenge is commercial. There needs to be enough mutual vision in the industry in order to build an ecosystem where customers can access a large variety of services in a simple manner. This calls for new ways of thinking by the operators that control the public transport system today. Accepting the idea that sharing your capacity with a larger offering will benefit you in the long run is the key. Bundling the existing mobility options – an aggregator in effect – is an obvious first step, but the real benefit comes from more sophisticated solutions that bring value for both the customer and the transport operator. This is in the form of growing revenue and having a better understanding of the customer and thus better planning.

While waiting for the aforementioned to happen, Tuup is focusing on tailoring services to businesses, especially in the realm of ride-sharing. Most importantly, we are introducing a new service to the field of transport. Tuup will be launching an on demand shared taxi service in Finland in the near future. This will be a central building block towards intermodality 2.0. A solution for the ‘first-mile last-mile’ problem, that meets the future mobility needs as we see them. Only the customer can decide whether we’re on track.

Reference:

  1. tuup.fi

Biography

intermodalityPekka Möttö, CEO of Tuup Oy, is a long-term public transport operator. He is known in Finland for his previous company OnniBus.com which totally disrupted the Finnish intercity business by introducing a digital sales channel and a comprehensive new business model to the market. He joined Tuup in June 2016 to build digital solutions to the future global mobility market.

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