On-demand pilots being tested globally show how on-demand public transport can be used to improve passenger access and increase efficiency, according to a new study by L.E.K. Consulting.
SYDNEY (August 7, 2019) ― L.E.K. Consulting has undertaken a global review of over 40 cities that are trialling on-demand public transport pilots and operational services around the world, including the pilots run in New South Wales.
Key findings from the report include:
- L.E.K. expects that it will take another three to five years of experimentation around the world before the true economics and utility of on-demand public transport are known
- The pilots run in New South Wales are among the most extensive globally and point the way to the future of on-demand transport. They are an important source of learnings for other pilots to determine best practices
- Experiences of pilots and operational on-demand public transport services occurring across the globe are likely to reshape the next generation of bus contracts and, more broadly, the mobility space
- Some operators report significant challenges with ride-matching technology and changing customer behaviour, which can take time to adjust
The report also identifies key lessons that are likely to be useful to all public transport operators considering running on-demand services.
- Allowing sufficient time to influence customers’ behaviour before evaluating pilot performance
- Acknowledging that technology is still evolving, therefore deployment-specific adjustments may be required
- Recognising that the economics of on-demand public transport will need to be below the costs of existing services to be a viable substitute for scheduled bus services
- Understanding the local market for on-demand solutions so they can be tailored to local needs
- Prioritising integration with the broader public transport network (wayfinding and ticketing)
- Allowing different contract structures and key performance indicators from those traditionally used in service procurement
“On demand should provide a better service to customers for a lower subsidy, on routes with lower demand,” says Simon Barrett, Senior Partner at L.E.K. and report author. “In every city, there are a lot of bus services operating with mostly empty seats — on-demand will be a much better solution for these services.”
Notes to editors:
On-demand public transport is different from commercially available on-demand services such as Uber, Lyft and Didi, already popular in Australia. Commercial on-demand services — often called ride-sharing or ride-hailing — tend to focus on optimising the journey for the individual passenger to reduce waiting and/or travel times. On-demand public transport focuses on optimising the journey for groups of passengers going to or from a common location for a subsidised price.
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and rigorous analysis to help business leaders achieve practical results with real impact. We are uncompromising in our approach to helping clients consistently make better decisions, deliver improved business performance and create greater shareholder returns. The firm advises and supports global companies that are leaders in their industries — including the largest private- and public-sector organisations, private equity firms, and emerging entrepreneurial businesses. Founded in 1983, L.E.K. employs more than 1,400 professionals across the Americas, Asia-Pacific and Europe. For more information, go to www.lek.com.
Dominic Eggers, Australia Chief Marketing Officer
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