What impact will disruptive technology have on the bus sector?

The final session addressed the topic of the impact of technology from autonomous vehicles to services such as Uber on the bus industry.

Arriva UK Bus managing director Kevin O'Connor said a range of new technologies such as Uber. Zipcar, Moovit and Citymapper were changing the expectations of the user. The future was difficult to predict. Would autonomous vehicles be a mode or a product? Driverless cars, he said, have very similar attributes to demand responsive transport services but without the driver.

But undoubtedly autonomous vehicles and on demand services were among disruptors. An Arriva survey into customer expectations had found that people wanted "Uberfication" of bus services –not necessarily on-demand services but dynamic, flexible and with the ability to pay by phone.
Bus companies needed a business digital strategy. "Customers expect up to date technology," he said.

On-demand services could be an opportunity for the sector, he argued. Last year Arriva had introduced the demand-responsive Arriva Click in the Sittingbourne area in Kent using luxury minibuses. It had learned "how dynamic you can be with a new service", including changing the way the service was priced and marketed. To use, customers download an app, buy journey credit and select a pick-up and drop-off point. The app offers a price and ETA.

Between March and April there had been 15% week-on-week growth and 12% of the population used the service – high penetration in a small area not used to using Uber, said Mr O'Connor. There had been some abstraction from buses, but 52% of passengers had switched from cars or taxis.

Mr O'Connor predicted that DRT would be important in three markets: in urban areas, in areas of low population density, and for the public sector, providing socially necessary services more efficiently.

Dr Jillian Anable, professor of transport and energy at the University of Leeds Institute for Transport Studies, said that the widespread view in the media was that "revolutionary" shared services and autonomous vehicles would sweep away "old-fashioned" public transport.

In fact since the early 1990s, "each cohort of young people has owned and used cars less than the preceding one". 25-34 year olds use public transport more to commute.

Some factors in this could be lower full time employment rates, the increase in low wage, uncontracted jobs, increases in housing expenditure and a decline in disposable income. Being able to remain connected on the move might also be a factor.

More young people use the bus than any other age group, but they are the least satisfied. They want "real" real-time information, the ability to compare on price, smart ticketing, wi-fi, phone charging points and real-time mapping on the bus.

"Shared mobility" was a phrase used to include car sharing and ride sharing but not public transport. In fact shared car travel has been declining for 30 years. The average occupancy of a car in the UK is 1.55,including the driver. For Uber the figure is thought to be the same as taxis in general at 1.66 including the driver. On demand services might result in induced demand and greater congestion.

Dr Anable asked: "Do we understand what smart mobility will do to our cities, our places, our societies? We don't do transport governance well now when it is relatively simple." Given the pace of innovation, society was at a critical and probably short-lived juncture for policymakers to introduce new regulatory mechanisms to bring about desired outcomes.

The choice was between smart policies to make smart mobility a positive transformation, or a risk of going "in a direction we don't want to go" in which automobility continued to prevail.

"Disruptive technology is not new," said Paul Buchanan, a partner in consultant Volterra. Rail took 10-15 years from its introduction to being the largest mode of transport. The car took 25 years to overtake rail. Nothing has so far overtaken the car. He said he preferred the phrase "opportunity-creating technology".

Transport tends not to work as it is expected to, he added. In recent years the time people spend travelling and the number of trips they make has stayed roughly constant. Instead of using faster transport to save time, people use it to travel from further away.

Considering technology trends, he said automation would make taxis a lot cheaper, buses slightly cheaper and cars perhaps more expensive. Sharing would have an impact on bus demand, creating a new market. AVs could have a significant effect on safety and the costs arising from road accidents, given that 94% of accidents were due to driver error. They could also increase road capacity – predictions ranged from 50 to 200% or even as much as 500%.

Mr Buchanan predicted that the impact of autonomous vehicles on buses depended critically on location, with the greatest threat in rural areas, where driverless shared taxis were likely to outperform rural buses. "It is difficult to see a long-term role for buses [in those areas]," he said.
In big cities the capacity advantage of buses would be important; buses would play the main public transport role in most UK cities.

Towns and small cities were likely to be where the competition between buses and AVs was fiercest. Here, the advantage between modes would depend critically on the level of priority given to buses and extent of charging on cars and public hire vehicles.

If AVs were to work for all transport, authorities would need to price use of the roads. Human drivers would have to be banned (to achieve the theoretical gains in efficiency). Authorities would have to manage road and parking space allocation – using the increase in capacity to reallocate space; and find ways to protect and prioritise buses, pedestrians and cyclists would need to be devised.

Go-Ahead group special adviser Simon Craven looked at how consumer psychology was affecting the bus sector. He said a large proportion of consumers spend over ten hours a week online – in a rapidly evolving environment. Devices such as smartphones typically became twice as good every three years without costing any more money. This changed expectations more generally. Meanwhile, he said. "The bus journey hasn't changed for decades. People feel instinctively that it's old-fashioned."

Internet services make a personalised offer and then fulfil it. They give a sense of control (which may be an illusion) and a sense of community. He compared this with sharing space on public transport.

At the same time technology companies were "using technology sector money as a weapon". "Uber's biggest weapon isn't its app – it's having investors prepared to burn millions of dollars, running up sustained losses to become a global mega-corporation," he said. He added: "But sooner or later every operator has to generate enough income to meet a realistic cost of capital and pay their workforce enough to live on."

"So we have culture shock. Technology and mobility is changing faster than at any time since the train overtook the horse," he said.
For decades, technological progress in public transport had been incremental. Now there was not a revolution but discontinuities, with fundamental changes in technology and in techniques used to communicate with consumers, which demanded "a real change of mindset".

Pete Ferguson, chief executive of Prospective, looked at the question of how data science was changing transport. Prospective is a company formed by data scientists, software engineers and transport modellers from UCL, Cambridge and the Alan Turing Institute, which has developed a cloud platform for urban analytics to help organisations gain insights from their data.

"There has been an explosion of real-time data on citizens' travel behaviour, preferences, activity demands and conditions on the transport network," he said. It is possible to see for the first time where people enter and leave the system, where they interchange and so on. The bus in particular has the ability to build up "a lot of data on what people are doing". "Effective use of data by traditional transport operators can open up new opportunities," he said, improving service, reducing operating costs and increasing revenue. Data could allow operators to be more responsive, integrated and sustainable.

Data now provides the ability to see current network performance in detail and to understand what is driving performance, to predict what will or could be and the implications for patronage.

It can allow operations to be planned as part of a single integrated network and to test the effect of changes in operations, taking into account interdependency with the rest of the city.

From a sustainability viewpoint it allows transport changes to be assessed against a range of criteria that consider the objectives of a range of stakeholders.

Operators should harness this technology, he said, by contextualising their data; considering the wider network; predicting performance; making practical changes to schedules and reconfiguring routes and resources; and collaborating.

"What kind of service could you come up with that hasn't been thought of before?" he asked. "Maybe it's a way of using public tranpsort to move freight as much as people. Maybe it's a way of combining on-demand transportation with traditional forms of transportation. It's this kind of point, about how you utilise the resources you already have and really sweat them, that's a positive message I would like to leave you with."