October 15, 2017

Putting the customer first Ruter’s recipe for future public transport

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Oslo’s public transport administrator Ruter is adopting a pioneering approach to digitalisation as it prepares future public transport services in the Norwegian capital region. Kevin Smith travelled to the city to meet with CEO Bernt Reitan Jenssen to find out what the company has achieved and what it is planning for the future.

SITTING in the main board room at Ruter’s headquarters in central Oslo, the company’s CEO Mr Bernt Reitan Jenssen is keen to show off a new tool which he says is revolutionising meetings at the company.

Pulling his iPhone out of his pocket, he boots up an app, which projects the image of his face captured on the phone’s camera onto an iPad positioned on top of a miniature Segway. Using the app, Reitan Jenssen steers the Segway around the room, and even adjusts the height of the robot-like version of himself to show off its capabilities.

Ruter“We have one person who works from home every Friday and he regularly uses this system to walk around the office,” Reitan Jenssen says. “He has even given presentations in this room when he has been on the other side of Norway. After a couple of minutes, you stop thinking about it, and act normally. It started out as an experiment but we have found that it is far more effective, and cheaper, than any teleconference system we have used before.”

Ruter’s innovative approach to working was recently commended in a report commissioned by Microsoft looking at how Norway’s largest companies are addressing the digital transformation taking place in their respective industries. In particular, the report highlights how Ruter is embracing the use of digital solutions to collect and harness big data to improve its customer offer.

The administrator’s openness to adopting innovative working practices has helped the Norwegian capital to become a European transit success story. Despite Oslo’s status as one of the fastest growing cities in Europe - its population increased by 18% in the last 10 years - car traffic in the city has fallen during that period. This has led to public transport ridership increasing by 60% in greater Oslo and 70% in the province of Akershus.

Yet Reitan Jenssen is not resting on his laurels. Far from it. He says the technological changes currently taking place inside and outside of the industry promise to have a greater impact on public transport administrators like Ruter in the next 10 years than experienced in the previous 100. And he admits how Ruter reacts to this is what keeps him awake at night.

“Our recent success must be due to our tremendous business idea: taking people from where they are not, to a place that they don’t want to go, and in a way which, in many cases, they don’t like,” Reitan Jenssen says. “For me, that is the riskiest position any business can be in. It is just waiting for someone to come up with a better idea. So, even though we have this great success, it might change really fast if somebody comes up with a better concept.”

Ruter, like other transit operators, has flourished in an environment where car usage is restricted or impractical, which has effectively forced people to use mass transit. Like other transit operators, Reitan Jenssen says transport in greater Oslo has emphasised frequency of services in order to meet demand. But with trains, trams, buses and ferries only full during two periods of the day, he says operators and administrators have for years wasted money on inefficient services leaving them vulnerable to new and more effective business models.

In particular, the growth of the shared economy, and the rise of new transport players such as Uber and Lyft, have already disrupted traditional transport models in other cities. And with the first autonomous driving solutions expected by 2021, according to Reitan Jenssen, the threat is increasingly real.

“We are relevant to our owners because they want to create a city that looks different, without cars,” Reitan Jenssen says. “But to stay relevant with our owners we have to stay relevant with our customers. We don’t have any choice. If we continue to ignore the wishes of our customers, and continue to come up with inferior solutions, we will be gone in a couple of years.”

By recognising that the customer should be at the centre of everything they do, and not just creating networks and developing infrastructure, work began to improve performance in the two areas where passengers were found to be least satisfied with Ruter’s performance: ticketing and communications in the event of a problem.

First step

The first step was to understand what customers really thought of Ruter. This began by management “going home with the customer,” travelling their journeys and sitting in their homes to listen to what they thought of the company.

“They said to us, validate us, show us that you care, that you appreciate our business, and help us to help ourselves by giving us the capacity to arrange our lives the way we want,” Reitan Jenssen says. “And finally, they said: stop irritating us.”

This meet-and-greet concept was subsequently expanded to all of Ruter’s staff who were allocated shifts to stand outside Oslo Central station to speak with passengers. Upon finishing the discussion, the interviewer took a selfie with the respondent which was pinned on the wall of the office reception area, so all employees could see the company’s customers every time they arrived and left the office. “That changed something in this organisation,” Reitan Jenssen says.

The next stage of the process was to create a ticketing system very different from the one already in place and the SMS-based concept asked for by the city’s politicians.

Despite operating a very successful smartcard ticketing system, which accounted for 60% of revenues, and with potential for further growth, the decision was made to move toward smartphone ticketing and to tear out ticket gates. Reitan Jenssen says that with 200,000kg of equipment in place to enable smartcard use, valuable resources were being wasted. In contrast smartphones, use of which is virtually ubiquitous, are owned and paid for by the passenger, who “even blame themselves” if they do not work.

“Why are we investing in a system that takes into account the 5% which is never going to get there and provides an inferior service?” Reitan Jenssen says. “A smartphone is not a ticketing system. It is a travel assistant with an embedded payment system.”

At the centre of the new smartphone ticketing system is the RuterBillet app. Available on iOS and Android, its simple interface is reflective of its ease of use. Within two clicks and one second, regular users can buy the ticket they require, with the app remembering their previous purchase. The app also supports various payment platforms ranging from credit and debit cards to mobile pay, mobile phone bill payment, and the Vipps mobile payment solution popular in Norway. This competition has reduced the cost of each transaction to Ruter from approximately NKr 2.50 ($US 0.32) when it started to NKr 0.80 now.

The move to smartphone ticketing has also coincided with a change in attitude by ticketing inspectors. Instead of issuing passengers with penalties and potentially creating confrontation, Reitan Jenssen says the emphasis is now on helping people to buy tickets, including those who don’t want to use their phone. All trains and buses are fitted with USB charging points, and inspectors have phone chargers to help people with flat batteries. Inspectors are also using an Android-enabled device rather than an expensive ticket machine to check paper or smartphone tickets, and which can recall a specific passenger’s usage history, informing the inspector of whether they should issue a fine or a warning.

The new approach is proving a success. 95% of passengers are now paying in a totally open system, and ticketing now has a customer satisfaction score of no less than 92%, up from 34% in 2009-10.

“It is now one of the best things about the company and it has redefined how the customer looks at us,” Reitan Jenssen says. “When I meet passengers, instead of immediately complaining, they now say that we have this really cool app.

“We have moved from a boring company to a future innovating company, and people are asking us advice on how we have done this. And this is despite the fact that we are in the public sector, with the strictest procurement practices.”

The next step is the deployment of a ticketing app which responds to where the passenger is, charging them automatically when they board and alight a train, tram, bus or ferry with a bill issued at the end of the month. The system is currently undergoing trials on 60 buses fitted with 800 beacons, which report the precise position of passengers. Reitan Jenssen adds that Ruter is cooperating with data authorities to secure approval for its passenger positioning system in order to overcome concerns with personal freedom laws.

Monitoring the location of passengers is similarly at the centre of Ruter’s efforts to improve communication when there are problems with services.

Heading to the fifth floor of the office building, Reitan Jenssen accesses a secure room kitted out with a bespoke traffic monitoring system covering the metro, tram and bus networks. Two controllers observe the position of each bus and tram on the network and the number of passengers onboard. They also have access to traffic cameras to monitor local road conditions, which they use to predict traffic congestion and adjust bus routes accordingly by sending updated journey information direct to the driver’s tablet.

“They collect more information in Oslo than Uber collects worldwide,” Reitan Jenssen says, adding that the ultimate goal is for Ruter to communicate news of delays and evasive actions directly to individual passengers while they are travelling. It also hopes to offer services such as “walk a mile, save a mile” in the future to encourage a diverse use of services. “You can inform the passengers through the infotainment system on the bus that there is a new travel plan on their mobile phone,” he says.

Customer-Centric team

Many of the innovations driving these as well as other service enhancements across Oslo’s public transport services have been delivered by Ruter’s Customer-Centric team, which has been using “sprint” development methods pioneered by Google since November 2016.

Working in the “brainstorming room,” the sprint starts on Monday with the team outlining what they want to achieve on two to three projects that week, and concludes on Friday when the customer tests the prototypes. This fast approach to development is enabling the team to get immediate feedback on new concepts and projects whereas in the past it may have taken a few years to reach this point.

As well as internal colleagues and customers, the team works with external developers in what are truly cross-disciplinary teams. This openness is reflected in Ruter’s willingness to share its data freely with outside developers on its website. It uses simple and cheap open-source data development tools like Spark and Kafka, which are familiar to computer programmers, so they can start using Ruter’s information right away.

“Out of the 230 ideas, I think we now have three or four in production,” Reitan Jenssen says. “But what is the most valuable part of that process? Is it the three in use, or the 230 ideas we didn’t proceed with? That is valuable experience. You have to celebrate your failures because they are some of the most expensive but vital pieces of information you can get hold of.”

This new working culture is helping Ruter to attract leading talent from universities both from Norway and overseas, which Reitan Jenssen admits has not always been the case for public transport companies. He also credits the structure of the organisation, which is a limited company with a board and is not directly controlled by the government, for providing Ruter with the capacity to innovate and, ultimately, to fail with some of its ideas.

Structural changes have similarly redefined the decision-making process. Reitan Jenssen says Ruter is no longer a traditional hierarchical organisation where the major decisions are made by top management in a closed room. Instead, he has deliberately pushed this process out to management working closer to the customer. The organisation is structured into four market areas, each with a marketing and regional manager, but without any direct resources, so they all have to agree in order to make a decision.

This is preventing “black box” decisions from taking place. It has also changed Reitan Jenssen’s role as CEO. “I am not sitting at the end of that chain and taking those decisions, I am more likely to throw in the ideas and make sure they have the resources to succeed,” he says.

Like the sprint, many of these ideas have come from observing how the leading tech companies are working. Reitan Jenssen says he visited Silicon Valley in May while other Ruter staff have worked with Waymo, formerly the Google self-driving car project, to find out as best they can how this technology might operate in the future so they can respond accordingly.

While these observations have reinforced Reitan Jenssen’s view that high-capacity metro systems will remain the mode of choice for transporting large volumes of people quickly and efficiently, the future of other systems, including the city’s tram network, is less concrete.

He says there is a debate right now about whether future integrated transport networks are going to rely on systems that feed the metro, or more point-to-point solutions. And with governments set to spend billions on new infrastructure designed to last for 50 years and beyond, it is critical they have the clearest understanding possible of the means of transport that this investment should support.

Despite these questions, according to Reitan Jenssen there is one certainty: no-one can halt the tide of change.

Recalling a recent conference on automation in Norway, he says unions were quick to defend the status quo, telling the assembled media that drivers will be required for many years to come. Yet as they were doing so, an automated bus was pictured in the background driving back-and-forth.

Managing the social fall out from these changes is though for Reitan Jenssen an even greater challenge. Preventing people from falling through the cracks, should therefore warrant just as much attention as developing the technology that will deliver this change. If not, the anti-establishment Brexit and American presidential election votes of 2016, could become more regular and widespread.

“If we don’t manage this technological change and how it impacts people carefully, we have the potential to head into deep trouble,” he says.

 

Oslo’s rail infrastructure projects

BOOSTING rail capacity and reach is a major priority of Ruter’s current infrastructure investment programme, which is centred on three major projects.

Following years of discussions, construction of the Fornebubanen, a new 8.15km underground metro line from the old airport at Fornebu to the existing metro network at Majorstuen and Blindern is finally expected to start in 2019-20. Offering a journey time of 12 minutes, the line will feature new stations at Fornebu Centre, Flytårnet, Arena, Lysaker, Vækerø, and Skøyen and will support developments in the Fornebu-area, which is currently undergoing a huge transformation with thousands of new apartments and offices under construction.

So far, the main focus has been issuing contracts and securing quality control. The Norwegian government will finance 50% of the project, with local authorities providing the remainder of the funding, mainly from toll road charges and other financing initiatives from business and property developers.

At the end of last month, Ruter initiated the start of the planning programme for a new metro tunnel in central Oslo. Intended to meet projected population growth in Oslo and Akershus and to support the city’s target to reduce car traffic by a further 20%, the tunnel will support greater metro capacity, increasing the number of trains able to operate every hour. The plan is also expected to include new stations to increase the reach of the network and will require the purchase of new metro cars.

The initial plan will be open for public consultation later this month, after which a final decision will be made on the precise location of the tunnel and the new stations.

Finally, Ruter has developed plans for expansion of the tram network to the northeast of Oslo through a 3.7km, six-stop extension of Line 17 from Sinsen station to Bjerke in Tonsenhagen. The project is intended to relieve pressure on the Line 31 bus service, one of the most congested in Norway. However, it remains deadlocked over financing. In March, the city’s transport committee rejected a proposal to cover 50% of funding, with those opposing the measure stating that the project is not a priority before 2020.

 

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