EUROPE still lacks a mobility platform covering all modes of transport, regions and countries simultaneously. But with various companies working intensively to develop these platforms, and transport providers, automotive manufacturers and IT/internet companies all investing, a mobility market is beginning to emerge which will offer transparent services that go far beyond transporting people by a single mode.
These developments led BearingPoint to launch a study on the future of multimodal mobility platforms. The study identifies business trends, functional aspects, as well as obstacles to establishing these platforms.
With people increasingly available and open to using different mobility services, previous routines are being broken. Transparent transport information provided via the internet and apps can easily combine the services offered by different modes - rail, car-sharing and air, for example - into a single platform. This creates new travel opportunities from ticketing and payment functions to value-added services, and allows a straightforward and combined comparison of different operators’ offers and their respective advantages. Customers benefit enormously from this untapped information diversity and transparency, which empowers them and puts them in an ever more influential position.
For operators, it is no longer simply enough to provide train, tram or bus services. They need to diversify their offer, which will help them to gain market leadership by providing a wider range of services which are relevant to both transport and mobility platforms. These include:
- providing easy access to customers via different channels
- marketing of products and user-friendly combinations of different services
- providing real-time travel information as well as personalised suggestions during disruption
- becoming more open and willing to exchange an operator’s own offer with those of other modes of transport as well as intramodal competitors, and
- conducting customer data analysis to create traveller profiles and customer journeys, as well as other targeted and value-creating offers such as entertainment and catering, or services relating to family or business needs.
Not only are existing operators building their own mobility platforms, such as German Rail’s (DB) Qixxit personal mobility advisor, or participating in such platforms, but new companies from completely different branches of the industry are also entering the market. On the one hand, car manufacturers have opened mobility markets through their own car-sharing companies, such as Daimler’s Moovel urban mobility app, while on the other hand, IT/internet companies such as Google or Apple are already operating as a service platform for their users. These companies have extensive experience in customer penetration, marketing and data analysis from their original business models.
This results in a diffused picture of possible market participants in mobility platforms since each player brings their own strengths and weaknesses. While the platform business can win new customers, the complexity and intermodal networking of the platforms increases the number of factors which individual companies can no longer control. There is also the possibility that operators will cannibalise their own business when joining a multi-modal mobility platform. The following topics in the dialogue between transport companies and customers are already a challenge:
- data security
- contracts and liability
- payment functions and ticketing, and
- real-time traveller information.
As a mobility platform has yet to be developed which encompasses all modes of transport and operates across borders, BearingPoint launched an international study to draw a picture of the future of this emerging market. The focus was on promising business model aspects for platforms, functional characteristics, useful forms of cooperation, and obstacles which could hinder the establishment of mobility platforms.
Participants in the survey comprised 59 decision-makers from nine European countries, Japan and the United States, representing the railway, software/IT/internet, public transport, government, car sharing, associations, science and cycling sectors.
Everyone views the platform business as multi-layered and complex. For example, it will be a challenge to develop a simple and customer-friendly solution with simultaneous cost-effective and automated payment flows. Best practice will be needed, while the interlinking of automotive and rail services into a possible overall package is vital. This development is very much in the interest of the end customer and is also largely supported by railway and public transport operators.
The commitment to the mobility platform business is clearly regarded as worthwhile, as higher utilisation of public transport is expected. This is an incentive for the industry to provide mobility platforms with the desired functions in the near future despite the gaps in network coverage and the difficulties in data exchange. However, large mobility providers, such as national railways or large public transport operators, are not regarded as a typical “bellwether” for the operation of mobility platforms. Only 30% of mobility providers see themselves in this role, while IT/internet companies account for only 5%.
Cooperation between transport operators and between operators and IT/internet companies is vital for the successful establishment of mobility platforms.
The two groups of study participants agree with most of the topics, but not regarding customer loyalty programmes. Transport companies rate this as 58% important, while only 33% of IT/internet companies agree. This is a departure from customer loyalty programmes, which are developed according to the motto: full price and performance transparency for the platform users make loyalty bonuses obsolete. Anyone who joins will lose a competition-oriented comparison between the modes of transport which is originally intended in mobility platforms.
Finally, obstacles were analysed which hinder the establishment of mobility platforms. The three most pressing difficulties are:
- lack of standardisation in data exchange
- unclear effects of mobility platforms on own businesses pending management decisions on positioning, and
- data security concerns.
From the above analysis, it is possible to quickly draw a strength and weakness profile of transport and IT/internet companies relating to the mobility platform business.
Both industries have strengths and weaknesses which are remarkably opposed. Conversely, this means that in the case of a joint action, the weaknesses of one business can be offset by the strengths of another.
The results of the survey support this hypothesis, as both parties cite cooperation as the key to success.
The ability to design cooperation forms is therefore an important step for the mobility industry to take.
In summary, the survey shows that the respective multimodal mobility platform actors are in the initial creative experimentation phase. The open exchange of data is still challenging for security and competition. However, all parties are aware that they must remain focused on the customer.
The good news from our research is that no single “winner” will emerge across transport as a whole: no stakeholder has the legitimacy or power to implement a multimodal platform alone. The most pressing task for the industry is standardisation of data exchange between operators. Platforms should create values to customers. And competition between comparable platforms will increase in the future.
To achieve closer collaboration between transport operators and technology companies, BearingPoint offers the following advice:
- use international associations and industry bodies to agree interface standards and data governance principles
- work with governments and municipal transport authorities to set frame conditions on a local, national and international level for items such as IT, liability, and consumer protection
- start using platforms to both integrate data streams and create new customer experiences, which will help to gain experience and identify opportunities
- focus on both horizontal and vertical delivery of service quality, creating and developing trust in specific brands around service quality, and
- adopt agile and innovative best practices, to gain experience and deliver early value.
The deeper challenge is getting different organisations, with traditional or digital mindsets, to work together.
Of course, for companies which are considering opening their interfaces to innovation there is uncertainty and a fear of threats. Traditional operators are rightly concerned that their businesses are being taken by digital-only organisations. Yet to overcome these fears and extend the opportunity, the global answer is not to risk all, but to adopt agile innovative approaches which facilitate the testing of ideas and the gaining of experience.