Mobility Service Providers Will Offer Door-To-Door Travel Solutions on a One-Stop-Shop Basis

Transportation the way we see it

Mobility Service Providers Will Offer Door-to-Door Travel Solutions on a One-Stop-Shop Basis

Companies will deliver customer-centric transportation services by leveraging technology and bundling offerings Travel in today’s world is complicated. The modern traveler often takes a number of different modes of transportation on a single trip, with a compounded number of touch points with transportation providers, especially if a problem should occur along the way. Today’s travel customer is looking to a future scenario where his door- to-door transportation service needs will be handled by a single entity – a Mobility Service Provider (MSP).

What the Future Looks Like agency like Kayak, Google, It is estimated that by the year 2030 Travelocity), mobile (phone service almost all travel customers will use companies), booking ( engines like some sort of Information and Sabre and Pegasus) and financial Communication (I&C) device to (credit/debit card companies, payment handle their arrangements and these service providers, smart cards, mobile devices will be completely banking institutions). Customers will independent of any kind of computer expect MSPs to offer them prices and but rather will be embedded in deals that are geared to their devices and objects used in daily life. individual requirements, be easy to The components will be small, understand and handled quickly and portable, quiet, almost invisible and automatically. practically omnipresent. Information will be gathered with wireless data In this future scenario, customers will exchanges and sensors, enabling new, book and buy their travel innovative applications for arrangements through mobile transportation providers, especially in communication channels, which is planning and scheduling. also where they will receive real-time information about their trip – Customers will be very well informed. scheduled arrival time, connection They will know how to gather the data, departure platforms, etc. information they require through Questions about connections and platforms and communities. They will conditions at an upcoming destination be quality oriented and they will most can be answered through online, GPS- likely think in terms of travel chains enabled sites that can customize the rather than individual transportation information in an easy, visually- providers. Travel chains will be appealing format. The navigation electronically managed and executed functionality on mobile phones could and will be offered by many MSPs, even lead the traveler through the who will become the primary travel station right to his booked seat. contacts for consumers. To provide Constant updates and status of the the sort of seamless travel experience traffic systems across all transportation customers expect, MSPs will providers will be available. collaborate with a number of service providers, including those dealing with transportation (trains, airlines, buses, intermodal), online (ticketing

2 Transportation the way we see it

Some initiatives already in place counter and a train crew at the station etc. - or to find the location There is already a trend in the travel railway station. Passengers are given a on a map market towards the development of voucher that they present when they • Maps of journeys showing each intermodal travel chains but there board the train, allowing them to individual stage, and interchange remain many obstacles to full travel in first class cars specifically points integration. The ability to combine reserved for Air France customers, • Tools to modify or extend a journey long distance (air, train) and short regardless of the kind of air ticket they plan and to replace a section of a distance (car, taxi, tram) modes of have purchased. Passengers and public transport journey plan with a travel into one travel package is still a baggage undergo preliminary check-in car plan long way off as is the ability to at the rail station in Brussels and no • Ticket prices for rail and coach completely integrate railway and air further luggage handling is necessary journeys and link to e-retailers for travel. Much effort and cooperation on the rail leg. buying tickets for the chosen on the part of the companies involved journey and government agency will be Transportdirect.info is an example of a • Live travel information for Britain's required. However, advances in company that provides all the rail and road networks technology are helping to resolve information a traveller needs to plan a • Mobile phone access to Transport many long-standing concerns and journey by any mode, or mixture of Direct services such as live travel issues that special interest groups have modes, of transport within Great information and the planning of had with the concept of integrating Britain, including: simple rail and bus journeys intermodal travel chains. • Complete door-to-door journey options by car and by public Other examples of companies A few companies are already starting transport providing more than a reservation to give customers a taste of the future. • "Quick Planners" to find a train, service to their customers are Air France & Thalys have an coach, flight or car route London’s Oyster Cards, Germany’s DB agreement whereby all Air France • Step-by-step directions for joined- BahnCard100, the Netherlands’ 9292 customers travelling from Brussels to up public transport journeys information service and Spain’s Paris to take a medium / long-haul • "Find nearest" station / airport Empresa Malaguena de flight travel on the Thalys train. The search Transportes. reservation system treats the Thalys • Choose how to specify an origin or trip as part of the Air France flight, destination - by place, address, which means customers use their postcode, place of interest, coach / plane ticket for both parts of the trip. railway Customers do not need to make any additional reservations. Air France has a ticket

Mobility Service Providers Will Offer Door-to-Door Travel Solutions on a One-Stop-Shop Basis 3 What is the next level? What’s in it for the individual In order to provide and sustain a provider groups seamless travel experience to Transportation providers (trains, customers, several types of service planes, buses, taxis, trams) will be providers will need to work together, able to offer consumers accessibility to bundling their offerings. They will a larger area as well as many value- form what we call a Mobility Service added services, leading to improved Provider (MSP). By definition, an MSP revenue generation. Furthermore the is an entity that provides consumers companies can save on distribution with enhanced mobility through costs. It will require investment in services and information throughout technology jointly along with other the travel chain by combining the partners to enable seamless services of several inter-modal connectivity within the framework transport companies as well as other and additional infrastructure for service providers such as mobile, enabling inter-modality. navigation, booking and financial service providers. Online service providers will be able to offer ticketing as well as many Each of these provider groups is value-added services to local- and necessary if consumers are to be short-distance travelers, leading to assured of one-stop travel shopping more traffic on their sites and (see Figure 1) and each group stands to improved revenue generation. gain by its involvement in the process. Required will be investment in information technology solutions to support back-end operations and Fig.1: The MSP will provide customer-centric transportation services by leveraging partnership with other service technology and bundling offerings providers to build end-to-end travel products and services. Parties involved Key contribution Transportation providers Mobility service provider Transportation Mobile service providers can offer Services Services to consumer their customers important value- Seamless intermodal added services and build deeper Travel / Transportation Online service providers ( e.g. Google, customer relationships while Travelocity, etc.) Online B

Services Integrated Booking O u

m improving revenues. They will need to n

for end user n y and Ticketing t e d o i - l b Consumers v i s i

n offer technology such as near field i t t l g i o c t y p e Comprehensive Mobile services providers o - n s

f communication (NFC) which enables

Information s n e s

Mobile h o r e o v

Connectivity c r p r i the exchange of data between devices v c

for end user e i e f t c o

Navigation and s e n I r Schedule Integration s within a few centimetres of each Financial services providers other, allowing customers convenient Ability for end- Communication and user to make mobile ticketing /contactless payments payments Real-time Updates and also offer them payment and Smooth & Coordinated Booking engine providers Access to ticket Payment and Clearing clearing options via their telephone reservation and booking for bill. several modes

Source: Capgemini Financial service providers will benefit as consumers start using financial instruments and services more often in their travel, leading to improved transaction volumes. They will be required to invest in back-end payment processing capability for all consumer touch points within the MSP framework and in RFID and NFC enabled cards.

4 Transportation the way we see it

Booking engine providers or Global Fig.2: MSPs in the role of an agent or an information provider are the business Distribution Systems (GDS) in an MSP models most likely to evolve in the future framework will act as the booking and reservation engine for the MSP’s Potential business models transactions, acquiring access to a OPTION 1: MSP as a dealer • MSP buys capacity and other services from the participants Consumer buys huge untapped user base from the mobility service short-distance travel market. They • Contracts between MSP and consumers from MSP • MSP is liable for the service will have to build integration with Consumers service providers for short-distance OPTION 2: MSP as an agent travel and invest in information Consumer buys • MSP acts like a travel agent, provides information, booking, ticketing mobility service technology solutions to support cross- and payment services, MSP receives commission from the suppliers from MSP • Contracts between suppliers and consumers who sells on behalf entity and back-end operations. of service providers • MSP is not liable for the service Consumers Contributing parties in the framework OPTION 3: MSP as an information provider (Search Engine) Consumer buys will all face common issues, such as • MSP only consolidates information for the customer, no booking etc. mobility service from service providers, cost of entry and engagement, data • Contracts between consumers and service providers MSP as information security, defining and setting common • MSP receives advertisement fees and click fees etc. Consumers broker standards and keeping up with the ever-quickening pace of technological Implications of MSP in the role of agent and that of an information provider will be analysed further. innovations. Source: Capgemini Business Models for MSPs In general, an MSP could operate in three distinct ways – as a dealer, as an agent or as an information provider deals and trip planning assistance. for the consumer base (see Figure 2). No booking or ticketing function would be provided. They would direct From Capgemini’s point of view, the the consumer to the chosen service least likely scenario of the three is an providers when it came time to buy MSP in the dealer role. This would the services. The service contract require the MSP to take on full would be between the consumer and operational risk, an expensive and the service providers. The information unwanted burden. provider model has a low investment, low risk structure that seems more In the role of an agent, the MSP conducive to those starting up would act as the single face to the this sort of business. customer, comparable to a travel agency. The MSP would provide information, booking facilities, ticketing and payment services. It would receive a fee for these services. The contracts would be set up between the suppliers and the customers. The MSP would not be liable for the services and would act, in a sense, as an intermediary between the customers and the suppliers.

The third option for an MSP is to operate like a search engine. In this scenario, the MSP would act as an information provider, consolidating comprehensive information from across modes and providers and then offering consumers the best possible

Mobility Service Providers Will Offer Door-to-Door Travel Solutions on a One-Stop-Shop Basis 5 Which companies will take business. Transportation and online the lead? service providers already have a A key question that the individual similar business model and processes service providers will need to answer in place as well as long-standing is whether one of them will take on experience in travel-related the responsibilities of an MSP in operations, although either group addition to their primary service would need to make a significant responsibilities or whether the MSP investment in intermodal services. responsibilities will be handled by a third party. Given their present all-round capabilities and ability to make the If we take a closer look at each of the investment, air and rail transportation provider categories making up the service providers seem the most MSP partnership, it would appear that prepared to lead the MSP framework. transportation providers and online service providers have the most to Conclusion offer in terms of taking over the lead Intermodal travel transfers will MSP role (see Figure 3). The other increase for the future traveler, three – mobile, financial service and especially as interfaces are optimized. booking engine – either lack direct Travelers will think nothing of going travel operating experience or have from taxi to train to air to tram to bus little customer-facing experience and to get to their destination. One trip set don’t have travel as part of their core up by one service provider, offering an easy and seamless journey. Some configuration of an MSP will be Fig.3: Not all partners in the MSP framework have the preconditions in place to take responsible for setting up and on the leading role carrying out that journey, either in the role of an agent or as information Relevance for MSP lead role MSP Favourable factors Unfavourable factors lead role fit provider. Consumers will look to Transportation Provider • Similar business model • Will be required to invest significantly MSPs as the one-stop shop for all and processes further in creating intermodal services their travel arrangements. For the • Long-standing experience in travel-related operations market participants, especially the Online Service Provider • Similar business model • Will be required to invest significantly transportation companies, the key will (incl. Navigation) and processes further in creating intermodal services • Long-standing experience in be finding their place in the overall travel-related operations MSP scheme. If they are not able or • Extension of core business willing to take a lead role in the Mobile Service Provider • Direct interface with • Lack of experience in directing travel network, they run the risk of (e.g. Vodafone) customer, with control on operations communications • No core business becoming an interchangeable part of Financial Service • Lack of experience in directing travel Provider operations the mobility chain, with no contact to • More of an enabling intermediary the customer and no chance to • No core business influence customer decisions. Booking Engine • Long-standing experience • Experience in playing more of a back-end Company (e.g. GDS) in the travel business role rather than customer-facing processes • Capable of building a network • No core business

Good Fit Bad Fit Average Fit

Source: Capgemini

6 Transportation the way we see it

References:

1. White Paper,’ “European transport policy for 2010: time to decide”, Loyola de Palacio

2. “Fastrack is applauded with National transport award”,18th July 2007,Claudia Robinson,

3. “Development of Integrated Ticketing for Air and Rail Transport”, EU Commission Directorate-General "Energy & Transport”

4. Website – www.Transportdirect.info

5. Website – www.9292ov.nl.com

6. Website - www.transys.com

7. Website – http://www.emtmalaga.es.com

8. Website – www.Lufthansa.com

9. Website – www.tfl.gov.uk/oyster

10. Website – www.deutschebahn.com

11. Website – www.airfrance.com

12. Website – www.thalys.com

Research for this document was conducted by members of Capgemini Consulting’s MRD Strategic Insights Group - John Varghese, Vishal Khanna, Reshma Kamath and Swapnil Desai.

Mobility Service Providers Will Offer Door-to-Door Travel Solutions on a One-Stop-Shop Basis 7 www.capgemini.com/distribution

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