HOW TO BALANCE UTILIZATION AND AVAILABILITY IN SHARED SHUTTLES?
Imagine a situation where BigCo is a major employer in an office park facing a colossal problem. They need to expand their space to accommodate hundreds of new staff, but Mid City has strict land-use policies. BigCo has to demonstrate how it will mitigate traffic congestion, GHG emissions, and parking in order to get approval for expansion. Kitchen posters and email campaigns aren’t enough. City staff suggested offering a shuttle service for all the corporations in the office park, even if the hundreds of other commuters aren’t BigCo employees.
Nearby, Tech University offers free shuttle service for its staff, which helps reduce traffic congestion, GHG emissions, and parking demand. University officials asked Mid City for permission to use public bus stops to encourage more staff to choose mass transit over driving alone. Mid City will only allow the bus stops to be shared if the university offers its free shuttle service to the public, a financial impossibility.
WHAT DOES THE SOLUTION LOOK LIKE?
The grocery store industry has costs that aren’t distributed evenly. Someone pays directly for carts, shelves, fluorescent lighting, freezers, and a host of other products to keep groceries easy for us to purchase. Some people spend hundreds of dollars each week in the grocery store, while others spend a fraction of that.
You might say the infrastructure costs are wrapped into the food prices. Even so, not every customer pays the same percentage towards the infrastructure. Inside the same grocery store, three customers each purchase a pound of the store brand sliced cheese. The first pays full price. The second uses a coupon and only pays 70% of the list price. The third uses a financial assistance benefit and only pays 10% of the list price.
Examples of distributed costs surround us in every industry. Two airplane passengers are seated in the same row. One paid $1,000 from a personal savings account, while the other traveler’s boss paid the bill. People expect different fare policies for different rider segments.
Flexible fares are the solution to the problems facing BigCo and Tech University.
CASE STUDY #1: OPTIMIZING CAPACITY VS RELIABILITY
BigCo is a regional employer located in an office park. They have the financial resources to operate shuttles for commuters and first/last-mile vanpools for their employees. But they have limits. BigCo can’t afford to provide free transportation for the hundreds of people working for other companies. Compelling BigCo to offer free service to everyone would drive the company to relocate to another jurisdiction.
Time is of the essence. Mid City land-use policies are clear, and won’t be changing anytime soon. BigCo must demonstrate a reduction in office-park traffic, emissions, and parking or they can’t expand their footprint. A solution is a mobility-management system that can reserve and allocate capacity for different rider groups.
BigCo can offer free shuttle service for its employees and charge fares to other riders. The fares can either be paid at the time of service, or BigCo can track ridership and bill each rider’s employer.
The flexible payment opens doors to all sorts of cost-sharing. Since the mobility management system tracks riders by employer, BigCo can also set up a system where employers in the office park pay for the transportation service based on the percentage that their employees use it. In other words, if Acme Enterprises employees were 17% of the riders last quarter, then Acme pays 17% of that quarter’s fares.
CASE STUDY #2: ABC PRICING FOR SHUTTLES?
Tech University wants to use Mid City’s bus stops for its free shuttle service offered to staff. They’re confident that if they can share the existing city infrastructure that more staff will opt for the shuttle instead of single-occupant vehicles. But they have limits. Tech University can’t provide free transportation to any person traveling in the area.
A solution is a mobility management system that can charge different fares to different rider groups.
Tech University can sell single rides, ticket packs, or monthly passes to the general public, while university staff ride for free. The system also manages capacity on each shuttle, so there’s always enough seats for staff. The University is confident their investment meets their goals, and they can periodically adjust cost allocation as needed based on actual ridership.
THE LEVERAGE OFFERED THROUGH TECHNOLOGY
Today’s technology makes it simple for one operator to support multiple organizations who each have their own payment policies. The possibilities are endless.
All BigCo and Tech University employees create a personal, unique boarding pass. No one has to download a new app, and the system will know how much to charge each individual rider. Each segment of riders pays whatever amount applies to them – full fare, discount rate, or no charge. The service manager has real-time reporting on ridership by each group.
The shared-service capability translates to increased revenues and more services being available to everyone. More flexibility brings more profitability. Operators can now offset operations costs, cross-promote with neighboring travelers, and reduce parking demand — all while prioritizing their most important riders.
The Trakk Mobility-Management and Reservation system supports all these models. Sharing services between different rider groups brings up many considerations: cost allocation, capacity planning and allocation, reporting, privacy, branding, COVID safety, and more.
The Trakk team has been working on shared services for years. If you’re looking at a shared mobility project, please reach out! We’d be happy to chat about what we’ve learned.
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