With possibilities of real-time response, universal payment etc. today there should be a far better public transport pricing mechanism
The following may be true for a range of cities across the world.
When it comes to public transport of all kinds, while the process of ticketing and payment methods and modes have seen a lot of innovation, driven by technology over the past years and decades, but there seems to have been little innovation in the pricing mechanism of public transport ticketing.
When we think of ease and equity of population, but you still see the same decade or so old handful of deferred pricing mechanism like tourist ticket, day ticket, regular passenger discount pass, off-peak hour discount, and maybe age bracket discount. This is so outdated, while you can possibly charge on a scale from one percent to hundred percent of the ticket price (still honoring various categories of tickets mentioned above) based on the real-time occupancy level of the specific bus, tram, etc. at any given time, still running a profitable venture.
The pricing mechanism which is actually one of the most important affairs of the public transport sphere and which directly touches the lives of millions has remained static while everything else about public transport has changed mostly through technology, it's surprising.
Root cause, no authority or transport service provider would like to run the risk of changes in projected revenue from public transport for instance. Even if it means losing out on big profit possibilities (for both parties), as there is comfort in known! ?
City is a unique place. You see scores of vacant unsold houses in many cities and you also see those struggling to buy own house and those homeless on the streets, all in the same city.
You also see in a city, public transport of different kinds, many a time running partially or near empty on one or many occasions of day, on one and many stretches of the city, every single day and over the years, and you see people who are not allowed to board these near vacant public transport modes without paying a pre-fixed price or pre-decided discounted price and hence you also don’t see the latent flux of people you could have seen otherwise if authority or transport service provider would have allowed them to board the public transport on a fraction of standard or discounted ticket price i.e., as low as 1% to 5% to 10% or other of the standard ticket price, as a function of public transport occupancy level. Just because no one wants to do the math, both parties are at loss including operators and users. ?
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Now considering baseline criteria as public transport quality is good, everyone uses a multimodal touch-and-go payment card and payment is made inside or at the entry of the transport system say tram, bus, (possibly LRT, Metro, train as well) etc.
Now if we use embedded sensors inside tram and bus (and possibly metro and LRT) for instance calculate the occupancy of this particular bus or tram at any given moment and allowing real-time adjustments in ticket prices for "this particular" bus or tram to the extent i.e., near vacant tram or bus means near zero ticket price (as the operator is anyways getting zero if the system is running empty, even marginal profit over business as usual is still a profit), hence pricing will keep changing for every next rider, mostly lower than typical pricing and never exceeding the standard ticket pricing, also prompting more people to board the tram or bus if they see it running at lower occupancy, knowing that they will have to pay lower or just fraction. Apps can provide such projected pricing reduction information about any particular route in real-time to prospective travelers. If we tailor the existing transport system through upgrade or retrofit and adopt a real-time pricing mechanism at this granular level powered by tech (e.g., sensor fusion, etc) both transit service providers and citizens will be winner in terms of benefits and savings respectively, and it will help people switch from private to public transport, a much desired ”model shift”. ???
So real issue and opportunity is how to deal with occupancy level for (sometimes mutual) benefit of supplier and consumer?
Occupancy is a wonderful tool!
The hospitality industry learned this long back and hence early bird and last-minute discounts. The rental market is already thriving on this in some places. Aviation also leveraging it somewhat. Taxi services learned the other way around, how to inflate the price 2X or 4X or more through congestion charges. The public transit segment world over is still lagging far behind wrt innovation on real-time occupancy-based pricing (for price reduction not increase) with the unimaginable potential using real-time pricing adjustment mechanism with help of sensors and other connected technology.
Author: Anoop Jha