Get ready for seamless integrated mobility

We need to get used to living together with so many citizens. While the global population growth is ‘slowing down’ to 16 percent over the next 15 years, urbanization will only accelerate. By 2030, almost 82 percent of the population in developed countries will live in urban areas. Can you imagine what this could mean for the traffic flow and pollution of cities? Investments in infrastructure and traffic management alone will not be sufficient to prevent increased levels of congestion with a high economic impact on society.

public transportation

Rather, to cope with this urban growth and make more effective use of our roads, we will need to change our travel behavior. Fortunately, new integrated mobility concepts are being introduced that change the mix of transport usage. These concepts are presented under different names like Mobility-as-a-Service, Combined Mobility, and Mobility on Demand. Whatever the name, the concept behind them all is similar.

The mobility service providers aim to make travel seamless, from door to door, drawing on any type of transport. Public transport and rail are fundamental ingredients. But so too private services like car sharing and e-hailing (eg. taxi, Uber, Lyft) are important transport modes to provide the right service at any place, any time. And customers can simply plan, book, and pay their trips with one single app.

But even a great app and good availability of transport modes will not be sufficient for a positive change in behavior. Travel habits tend to be sticky. It is, therefore, essential for integrated mobility concepts to include behavioral incentives or rewards (such as some sort of loyalty tokens). For example, we could make a metro trip more attractive by providing a discount of 40 percent for a taxi ride on the last mile (and help overcome the temptation for people to jump in a private car for the whole trip).

As the transport system is changing, so should the governmental incentive schemes be modernized. It’s better to properly stimulate the demand-driven and sharing economy than to fund empty buses that are simply meeting their timetables. At the end of the day, we all benefit from less traffic congestion and more seamless transport.

So what should commercial offerings look like? Transactional fare collection and payment models do not provide the tools to create attractive offers across transport modes and time periods. To truly benefit from incentive and loyalty based business models, the mobility service provider would preferably offer account based rating and settlement schemes. Actually these business models are very common in the telecom industry and can get the transport business to the next level. If you combine that approach with incentivizing business logic to go beyond the individual trips, you can create the attractive offerings that can really mobilize new behavior and get us ready for the urban growth ahead.

The pace of change is disruptive for most stakeholders in the transport industry and is only increasing. My belief is that the winners will be the firms that embrace this disruption and cooperate with leaders outside their traditional industry. In the Networked Society, Ericsson’s mission is to empower the transport industry to reach its full potential. This will make sure that travelers can keep relying on effective transport to their destination – with the ability to move wherever they want, with the means of transport that is suitable for that moment, without bothering about payments, and maybe without even having to own a car.

This is a guest post by Tim Wouda, head of transport transactions at Ericsson’s Intelligent Transport Systems department.

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