Urban Public Transport Service Co-Creation: Leveraging Passenger’S Knowledge to Enhance Travel Experience

Available online at www.sciencedirect.com ScienceDirect Procedia - Social and Behavioral Sciences 111 ( 2014 ) 577 – 585 EWGT2013 – 16th Meeting of the EURO Working Group on Transportation Urban public transport service co-creation: leveraging passenger’s knowledge to enhance travel experience António A. Nunesa,*, Teresa Galvãoa, João Falcão e Cunhaa aFaculdade de Engenharia da Universidade do Porto, Rua Dr. Roberto Frias, 4200-465 Porto, Portugal Abstract Mobile devices are increasingly pervasive and are transforming information distribution paradigms. A rapidly growing segment of urban public transport passengers carry mobile computing devices, permanently and on the move. In a context of thinning financial resources, getting customers involved in the actual delivery of a public transport service as real-time information consumers and providers, may be a powerful method to enhance travel experience while reducing operational costs for the service operator. Each and every customer travelling on a public transport network has unique knowledge about the service operation as it unfolds. This paper proposes a framework that aims to unify public transport passengers’ collective intelligence through crowdsourcing, using their mobile computing devices and dedicated web services. It strives to intensify win-win relationships between public transport passengers and operators. The structured exchange of information is sustained by a validation mechanism for data reliability, and an incentive mechanism to encourage passenger participation. Passengers benefit from rich real-time data tailored to their profiles, to ease their journeys and improve travel experience, in exchange for their own participation providing and validating information. Operators gain access to rich customer generated data, which in an aggregated format may provide a real-time assessment of customer experience and of local performance across the entire network operation. Operators may be required to reward travellers who become prolific co-creators of the public transport service, but higher customer experience levels, lesser needs for investment in controlling mechanisms, and continuous free monitoring of customer opinions can jointly lead to financial returns. © 2013 The Authors.Authors. PublishedPublished by by Elsevier Elsevier Ltd. Ltd. Selection and/or peer-reviewpeer-review under under responsibility responsibility of of Scientific Scientific Committee Committee. Keywords: public transport; value; mobile; crowdsourcing. * Corresponding author. Tel.: +351 220 414 672 ; fax: +351 225 081 538. E-mail address: [email protected] 1877-0428 © 2013 The Authors. Published by Elsevier Ltd. Selection and/or peer-review under responsibility of Scientific Committee doi: 10.1016/j.sbspro.2014.01.091 578 António A. Nunes et al. / Procedia - Social and Behavioral Sciences 111 ( 2014 ) 577 – 585 1. Introduction Personal mobile devices have become increasingly pervasive in recent years (Saha & Mukherjee, 2003). The widespread availability of such devices combined with the growing coverage of ubiquitous data communication networks in urban areas is causing a dramatic transformation in the way information is produced and consumed (Manovich, 2009). A growing number of public transport passengers carry mobile computing devices such as smartphones, tablets and portable music players permanently and on the move (Smith, 2010; Smith, 2012). Many of such devices have virtually uninterrupted access to the Internet, allowing passengers to send and to receive information in real time, anytime and anywhere. This context is offering today an unprecedented opportunity for a profound change in the way public transport operators communicate with their customers. This may not be only about relaying travel information in a timely manner, but also about getting passengers involved in providing real time information that is valuable to others and to the public transport operators themselves. This paper will discuss the potential benefits and risks for public transport operators to engage in such a novel information exchange paradigm. It will be argued that it will enable the provision of improved and personalised public transport services that enhance travel experience whilst allowing for reductions in operational costs. Each and every passenger travelling on an urban public transport network has unique knowledge about the service operation as it unfolds, which may be of interest to fellow travellers and to the public transport operator. In isolation, that knowledge may seem of little value. But taking all passengers into consideration, there is a mass of potential observers across the network at any given time. Leveraging such distributed knowledge requires the empowerment of passengers as information providers, and the ability to transform it into structured information that can be efficiently aggregated and interpreted (Nunes, Gonçalves, & Galvão, 2013). Moreover, it requires incentives for the active participation of passengers in co-creating value with the public transport operator (Nunes, Galvão, Falcão e Cunha, & Pitt, 2011). The next section of this paper frames theoretically the co-creation of value in the context of services. The third section will review and discuss the role that the availability of information can play in the urban public transport domain from a service provider’s point of view. The fourth section describes a proposed framework of passenger involvement to enable value co-creation through crowdsourcing; a case-study is briefly described to illustrate the practical application of the proposal, and is followed by the conclusions of this paper. 2. Value co-creation in services Customers are increasingly getting involved in shaping their own service experiences (Prahalad & Ramaswamy, 2004). This is a trend that became generally known as value co-creation. Prahalad and Ramaswamy (2000) coined the term co-creation when they identified an evolution of the role of customers mainly from being passive buyers of products and services to become active players in the value creation process, bringing along their own specific preferences and requirements. These authors attributed this trend largely to the development of the Internet, which not only allowed customers to engage in dialogues with product and service providers, but also in discussions with fellow customers outside the corporation’s sphere of control. Numerous examples of value co-creation forms have been described and analysed in the literature, such as the involvement of customers in beta software testing, the development of open source software, the transfer of labour to customers in self- services and self-checkouts, and more importantly the web 2.0 revolution (e.g. Banks & Humphreys, 2008; Grossman, 2006; Payne, Storbacka, & Frow, 2008; Prahalad & Ramaswamy, 2004). Moreover, the acknowledgement that the customer is always an active participant in co-creation value with the firm is one of the foundational premises of service-dominant logic (Vargo & Lusch, 2004; Vargo & Lusch, 2008). Many firms have embraced this service-dominant logic into their strategies and are already leveraging customer participation as value co-creators for the benefit of the quality of services they provide. On that basis, such firms are able to create win-win situations with their customers, often saving resources while offering higher António A. Nunes et al. / Procedia - Social and Behavioral Sciences 111 ( 2014 ) 577 – 585 579 degrees of personalisation, promoting customer engagement and, in some cases, lowering prices. In short, this service-dominant logic consists of an evolution from a goods-dominant logic based on tangible outputs and discrete transactions, towards a perspective ‘in which intangibility, exchange processes, and relationships are central’ (Vargo & Lusch, 2004, p. 2). One could argue that in some cases the mere delivery of a service is a discrete transaction with a tangible output. Therefore, the understanding of this service-dominant logic may be extended in light of Pine & Gilmore's (1998) argument that the staging of experiences for customers in the context of services is today’s competitive battleground. So it could be argued that in order to fully embrace the intangibility of this service-dominant logic, firms must be able to stage memorable experiences that trigger positive emotional responses from their customers. Previous research has indicated that the public sector is generally lagging behind regarding the adoption of value co-creating practices and tools, due to a lack of customer orientation (Cassia & Magno, 2009). This may not come as a surprise since public services are often not as pressured to focus on the customer as private services are to guarantee its subsistence and business success in highly competitive environments. Urban public transport services in particular are often operated as concessions, meaning that direct competition is virtually non-existent. Nonetheless, public services in many countries are currently facing greater challenges as a result of tighter restrictions on the amount of resources that are available to them. The co-creation of value can therefore be a tool for innovating public services, drawing on knowledge of citizens for improving service provision with fewer resources (Alves, 2012). Urban public transport services – in a sense that even if they are privately owned they often rely on public subsidies – are an interesting domain for the application of value co-creation

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