Integrating transport services – or ‘bundling’ – looks set to make mobility easier, greener, healthier and more personalised, especially in urban areas. So, what are the next steps to making bundling go mainstream?
If you want to cross a city, it’s not too hard to figure out how long it will take by bus, train, taxi or on foot. And it’s usually fairly obvious which mode is associated with the most emissions.
But what if your journey combines these modes, or you want options for the quickest or cheapest route at any given time? That information is often harder to determine, but with bundling, it all becomes clearer.
In this context, ‘bundling’ refers to a variety of related services. One approach to bundling is to have a single interface that makes it easier to plan trips by offering data on multiple modes of transport in a joined-up way. Another involves mobility operators integrating many modes of transport and supplying them as a single service, which users can pay for using one account. Users might, for instance, have the option to purchase subscription plans that include a certain amount of time using each mode, such as public transport, bike sharing, carsharing, taxis, and so on, per month.
“Some countries in Asia are already far along this route,” says Karsten Pech, Director, Mazars. “Of course, not all cities or countries are ready, but people worldwide seem open to innovative new mobility solutions like this”. Studies show people are willing to pay more for public transport, carsharing, and ‘park and ride’ services when they are bundled than when they are offered individually. They are also willing to pay more for an app that integrates the services and manages ticketing and payment. This should not be a surprise: urban transport, like any network, has network effects and the more modes of transport you can choose from, the greater the value the network has as a whole.
How does bundling help?
Integrated information: Some kinds of bundling make it easier for passengers to access integrated data on the duration and distance of different routes in one place, making it more efficient to access the information passengers need to plan their journeys.
Bundling can enable passengers to find better routes: Of course, what ‘better’ means is different for everyone. For some it might mean step-free access. For others, it might mean reduced contact due to Covid-related concerns, routes which avoid weak bridges for heavy goods vehicles, or just the ability to combine cycling with walking through a beautiful area of the city. Bundling services together and providing information on how to combine them helps users make choices to travel in a way that is best for them.
At present, most of the travel information available for passengers about scheduled routes, such as for buses and trains, is the same for everyone. But an operator which offers information about different forms of transport on a user’s smartphone can, over time, learn where they tend to go and how they choose to travel, and use that information to offer personalised suggestions about new journeys. “The incentive for public transport operators to offer personalised journey information is weak,” says Michael Rofman, Partner, Mazars, “but the incentive for an independent operator offering bundled information to offer personalised journey information is strong. In this way, bundling opens the possibility of more passengers having access to personalised information from their mobility providers.”
Environmental benefits: In one bundling field trial in Sweden, users on a tailored monthly plan started to use their cars less and bike and carsharing services more. “If replicated as bundling services are adopted more widely, this could contribute to a long-term decline in vehicle ownership as more people decide they don't need a car, reducing congestion and pollution,” says Rofman.
Nudging towards behaviour change: The combination of bundling and environmental public policies can be a powerful way to reduce emissions, as it can increase the supply of greener mobility options and nudge up demand for them at the same time. Bundling can be used to introduce less popular modes of travel such as bike sharing and scooters to more passengers. Where the bundle enables passengers to pay for a combination of transport types, operators can use the price mechanism to offer further incentives.
Health benefits: Bundling can also make it easier to find walking or cycle routes, encouraging exercise and reducing air pollution. The World Health Organisation estimates that toxic air caused over 4 million premature deaths worldwide in 2016, 91% of which were in low and middle income countries, particularly in Southeast Asia and the western Pacific. As municipalities in these countries make choices about transport infrastructure in the coming years and decades, bundling may offer a lever to encourage cleaner transport choices, which could prolong and save millions of lives. One survey, for example, found that 60% of people would be willing to try new transportation modes if their transport bundle included them.
What’s needed to build bundling?
Political will: Studies show that there are two main drivers of demand for bundled services: price and social influence, in other words whether friends, family, colleagues, and other acquaintances are doing the same. They also show that the inclusion of public transport networks is key to the success of the programmes. “Transportation authorities and municipal leaders need to be fully bought in for bundling to be adopted widely,” says Peter Cudlip, Partner, Mazars. “Municipal governments could advertise bundled services to improve social influence, and the price of public transport is normally a public policy issue too. These governments can do this if they are willing to implement long-term solutions. Similarly, the public sector needs to show willing when it comes to working with the private (and vice versa) if these solutions are to take off.”
Digital infrastructure: Without mobile connectivity, Wi Fi, widespread smartphone use, and transport data in the right format, bundling initiatives will struggle to find fertile ground. Other technology issues are likely to arise since the more bundling parties that take part, the more difficult their integration becomes because of the number of interfaces in play. As Cudlip notes: “For bundling to scale and become a dependable part of our routine, mobility technology at large must continue developing so that a mobility as a service mindset becomes the norm.”
The decline of car ownership: Bundling is likely to come into its own as car ownership declines. “It will be difficult for cars to retain their status in the 21st century due to changing consumption habits, fossil fuel decline and climate change,” says Christian Back, Co-Head of Global Automotive Sector, Mazars. “It is already starting to lose some of its relevance, especially among young people who live in large cities and are put off by high acquisition and operating costs, traffic, and the constant search for a parking space.” Providing bundled, easy-to-use alternatives to traveling by car makes ownership less attractive. This is especially true when taking into account the hassle of car insurance, maintenance, breakdown and accident cover, and scarce parking space in increasingly crowded cities.
Covid-19: The pandemic may turn out to be a step change towards more sustainable transport systems. “I see great opportunities to shape the long overdue transformation of the industry towards meaningful ecologically sustainable mobility,” says Pech. In Israel, for example lockdowns saw a big fall in commuting. “The government worked with companies to introduce on-demand transit, routed by an algorithm which identified the most efficient journeys for essential workers,” adds Cudlip. Data-driven initiatives, such as this, are a natural fit with bundling services.
The future will be… bundled?
It is too early to judge what kind of bundling will take off and become part of the new daily commute. “New mobility offers are created and disappear almost daily, and at the moment, no one offer has prevailed,” warns Back.
However, the potential is clear. At scale, bundling can help mobility services become cleaner, more connected and collaborative, and move the mobility ecosystem from the ‘heavy footprint’ model of the past to the ‘light footprint’ model of the future.