6 lessons transport operators can learn from Uber

OPINION / 27th March 2019

Uber, not content with up-ending the taxi industry, has its sights firmly set on disrupting the entire travel and transport sector too.

As the ride-hailing app begins to venture into multimodal provision and end-to-end journey planning, we take a look at ways train and bus operating companies and other public transport service providers can learn from it.

Lesson 1 – build meaningful partnerships and collaborate with like-minded companies

Uber has been smart with forming partnerships with key players within the transport sector.

It’s partnered with MBTA to provide paratransit services in Boston. Similarly, Uber worked with the town of Innisfil, Ontario, to provide a service to areas outside the reach of conventional transit; and has worked in France to provide late-night connecting services to rail lines in Nice.

Here in the UK, Uber has teamed up with Virgin Trains: Virgin’s passengers are being offered the chance to opt-in to text messages that give them a link to download the Uber app, and receive a discount.

This is designed with a two-fold effect – offer Virgin’s customers a first / last mile service, as well as to ease pressure on station car parks.

Lesson 2 – make it easy for travellers to plan and purchase a multimodal trip

Uber’s trial with Denver’s Regional Transportation District enables travellers to seamlessly combine public transit with other options like ridesharing, within its app.

Uber App users can see real-time public transport updates, end-to-end directions and an estimated total journey time.

In partnership with Moovit, the real-time transit data and route planning provider and Masabi, the SaaS ticketing and payments platform, riders can also book tickets within the app too.

This means that Uber is now on the first rung of providing its users a multi-modal solution platform.

Its next step is to add a ‘multi-stage’ option for riders, so that they can choose the most cost-efficient and time saving routes available, either travelling on public transport or via an Uber vehicle.

There are plans to offer this in London and Paris soon.

Lesson 3 – buy a complementary business to enhance your offering

Uber understands that congestion and pollution are two of the major concerns for cities in the 21st Century.

Recognising that cars are often not the best way people can travel around cities, it bought a bike company to complement its transport offering.

Uber Bike by JUMP was first piloted in San Francisco in 2018, and was rolled out in Washington DC later the same year. Uber users can now find and book a JUMP pedal-assist electric bike directly from the Uber app. It’s environmentally friendly and often a faster way to get around dense and congested cities.

Lesson 4 – diversify your business model

Looking to distinguish itself from rival businesses such as Lyft, Grab and smaller local players, Uber has expanded beyond cars.

It has dipped its toe into the fast-growing food delivery market, launching Uber Eats back in 2014 in San Francisco.

Users across the globe can now order food from participating restaurants on Uber Eats’ website or app, and have their meal of choice delivered to their door – by car, bike, scooter or on foot – from as little as £2.

Lesson 5 – think laterally

What else can Uber do in the car space? Rent them of course, using a peer-to-peer model of business.

Uber Rent Powered by Getaround, was launched in San Francisco, earlier this year. Cars, equipped with Getaround’s technology, are available to rent and share instantly.

The idea behind the scheme is that with cars available to instantly rent in the Uber app, fewer people will need to store them in garages for those sporadic grocery store runs, daytime adventures, or weekend getaways.

Lesson 6 – share your data

Data sharing has opened our world up to endless new inventions. Without data sharing many of the apps you love and rely on would not be here.

Yet, so many businesses are reluctant to open up their data to the outside world.

Sadly, those that don’t move with the times will be left behind, as those brave and bold enough to do it will capitalise on the insights and value derived from data sharing.

Uber is living its values by recently launching its SharedStreets Pilot.

Working with the DC Departments of Transportation and For Hire Vehicles, SharedStreets has been set up to create new methods for public-private collaboration and data sharing. The pilot will share data on curb usage across all modes of transportation.

Better understanding curb utilisation can help cities around the world prepare for a future where more and more people are accessing transportation through a combination of shared modes, rather than relying on their own vehicles.

Uber introduced a second pilot last year, called Uber Movement, with the aim of collecting anonymized and aggregated Uber data to show travel conditions across different times, days or months, and how travel times are impacted by things like big events and road closures in a city.

Movement is helping urban planners, local leaders and civic communities make informed decisions for the future of cities.

ORM’s view

Uber’s vision is clear: it wants to become a one-stop shop for transportation in every city.

With the roll out of its multimodal offering in Denver, launching Uber Rent in San Francisco, and piloting data sharing initiatives in the States, it is well on its way to developing the platform and partnerships to enable this.

And with 15 million daily active users of its app, it’s growing the customer base to take advantage of it too.

So what does this mean for bus and train companies in the UK?

Once travellers can plan and journey and buy tickets in a familiar, liked and easy to use app, they have less reason to visit a public transport brands’ own website, or app again.

As Uber expands into the end-to-end journey planning and multimodal space, the greater the chance travellers will use its app as a first port of call in the way they currently use Google. This will be a huge seachange for existing transport providers, and has several implications for their future operating models.

These include reduced access to new and existing customers, and reduced ability to promote their transport mode – as travellers bypass their communications channels.

As their role changes to that of an ingredient brand in a multimodal travel solution, there’s a greater imperative for these companies to integrate with new Mobility as a Service solutions.

Companies who open up their fare and service data to these provides, are the ones most likely to benefit.

At ORM, we believe in digital enablement, and helping our clients achieve their digital freedom. We aim to help our clients make the most out of digital technology and trends, so that they are part of future solutions, rather than being consigned to the past.

Andy Farmer Andy Farmer Executive Director, Strategy Andy Farmer