White Paper: Innovation in Transportation

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  • INNOVATION IN TRANSPORTATION

    IDEASCALE WHITE PAPER

  • Ten years ago, the thought of real-time

    navigation apps, bike shares, and levitating

    high speed trains were all but science

    fiction. Yet, as technology has become more

    sophisticated, these once-radical ideas are

    now a reality.

    In 2010, the Port Authority of Allegheny

    County (PAT) and the city of Pittsburgh, PA

    took a devastating hit. A combined $50

    Million deficit and a lack of transportation

    funding on the state level resulted in a 35% cut to its public transportation routes along with

    500 of its employees.1 County residents responded with frustration and anger. Allegheny

    County is home to 1.2 million residents and an additional 95,000 students, almost half of

    whom ride the bus.1 Pittsburgh's landscape a mix of circuitous city planning and suburban

    sprawl is not ideal for a largely, pedestrian blue-collar town making public transportation a

    necessity among residents. In spite of meetings and protests, the cuts were carried out and

    left many commuters stranded or unaware of how to navigate the limited bus routes. This is

    how fast and impactful any sort of change in the transportation industry can be.

    Within that same year, Tiramisu was borna crowdsourcing app born out of a dire need to

    answer one question, when is the bus coming? The app was developed by researchers within

    the Rehabilitation Engineering Research Center on Accessible Public Transportation, a

    federally-funded joint initiative between Carnegie Mellon University (CMU) and the

    University of Buffalo.2 By utilizing the GPS signal on your phone, the app prompted riders to

    report when and if the bus arrived and whether it was overcrowded or empty. This reportage

    created a crowd-powered tool that provided useful information in predicting the arrival of

    your designated bus. The app not only gained the recognition of the Federal Department of

    Transportation, but it also helped to change the landscape of PAT's website. The increased

    functionality of the website is in part due to the progressive domino effect that occurs when

    technology demands shift and customer needs are better promoted.

    In this white paper, we will discuss the four most pressing areas that require industry-wide

    innovation and how the crowd can be a resource to solve concerns in those areas.

    2INNOVATION IN TRANSPORTATION

    Introduction

    http://triblive.comhttp://www.post-gazette.com/business/businessnews/2012/06/29/CMU-spinoff-gets-Dept-of-Transportation-grant-for-Tiramisu-transit-app/stories/201206290151http://triblive.comhttp://www.post-gazette.com/business/businessnews/2012/06/29/CMU-spinoff-gets-Dept-of-Transportation-grant-for-Tiramisu-transit-app/stories/201206290151

  • 3INNOVATION IN TRANSPORTATION

    The evolution of PATs infrastructure is not unique to Pittsburgh, PA. Whether the focus is

    public transportation, air travel, or trucking, we can expect the transportation industry to

    sustain periods of disruptive change. As these changes persist, the transportation must

    continue to innovate in order to maintain cost efficiency, competition, and sustainability.

    The areas most receptive to this approach are the traveler experience, cost estimation,

    security, and technology.

    Traveler Experience

    The traveler experience is one of the most crucial aspects of the transportation industry.

    Reaching your customer and selling to them can be any transportation organizations

    largest expense. That said, a loyal customer can increase your profits tenfold. The ubiquity

    of social media is a blessing and a curse, as it creates numerous outlets for customer

    feedback. In turn, both satisfied and dissatisfied travelers have the ability to have their

    voice heard, shared, and documented. Thus, it is in a companys best interest to work to

    exceed traveler satisfaction. There are three factors driving this trend: an increase in

    customer expectations, an increase in competition among transportation companies, and

    an increase in public sector interest in improving transportation.3 Traffic jams and delays

    through public transportation and highways increase traveler frustration while decreasing

    productivity and competitiveness of cities. How can local governments and commercial

    companies smartly invest in their mass transit systems and improve their constituents

    satisfaction?

    One industry where customer service proves to be vital is the airline industry. In a time

    when fuel prices are low and the economy is improving, more and more people are flying.

    However, profits are still low. The profit margin for most carriers is less than three

    percent.4 Improving customer service can be a cost-effective way of attracting and

    keeping customers. For example, Ryanair, a budget European budget airline, is notorious

    for their terrible customer service and traveler complaints. One year ago, CEO, Michael

    OLeary, stated that although profits continued to rise, their current business model with

    no regards to customer service was unsustainable. Since this public admission, Ryanair

    has implemented a number of measures to improve its image and address the impact that

    poor customer service has had on sales.4 An increased focus on customer service was a

    significant cultural change for Ryanair, but proved to be sustainable in the long-run.

  • 4STAYING PROFITABLE, INNOVATIVE, AND RELEVANT: THE IMPORTANCE OF EMPLOYEE ENGAGEMENT

    As we discussed in our introduction, high costs present a real, measurable concern in both

    the private and public sectors of transportation. Often times, improving a product or a

    system includes a sizable investment by a firm. Yet, creating a new hard product might not

    always be the right solution. It is unrealistic for a city that is dealing with heavy traffic to go

    out and build more roads every time there is a traffic jam. Likewise, an airline carrier

    cannot develop a new plane model every year. Alternatively, cutting costs may not prove

    to be a sustainable long-term business model. This approach is most often executed in

    mass lay-offs.5 This might prove to work in the short term, but more often than not, it

    sacrifices quality and morale.

    The better solution is for organizations to minimize their costs, while maintaining

    efficiency, effectiveness, and a more sustainable strategy. Solutions for lowering costs can

    include investing in technologies, talent, and analytics. These may be more expensive on

    the front end, but prove to be valuable throughout its lifecycle. The Intelligent

    Transportation Systems (ITS), created

    through the Department of

    Transportation (DOT) Research and

    Innovative Technology Administration,

    works to advance transportation

    safety, mobility, and environmental

    sustainability through electronic and

    information technology applications.5

    This initiative has led to improvements

    in red light cameras, ramp meters, and

    traffic signal coordination. In 2009, the electronic toll collectors installed by ITS reported more than $1 billion per year in

    mobility benefits. These mobility benefits which can be measured in

    both dollars and quality of life far

    outweigh the initial cost DOT

    invested in their newest innovations.

    Costs

    Graph courtesy of Deloitte Report: Rethinking profitable growth in the transportation industry 5

  • 5INNOVATION IN TRANSPORTATION

    In recent history, stricter safety guidelines have been passed to improve security and

    streamline regulation. While some travelers may view these changes as an inconvenience,

    these rules play a significant role in protecting travelers in the face of terrorism and even

    natural disasters. As a result of collecting more personal data, the industry became more

    vulnerable to cyber attacks. These situations have huge implications both directly and

    indirectly on citizens. Cyber theft and data breaches are becoming more prevalent and

    create a sense of fear among travelers. It is ironic that the result of one safety measure

    would cause virtual safety to be compromised. Cyber crime is estimated to cost the global

    economy around $445 billion a year.6 Since its clear that no company is immune to this

    threat, implementing risk management strategies is essential in protecting both the

    company and the travelers.

    Technology

    Every year, technological innovations have appeared across the transportation industry.

    Technology solutions are applied to data mining, safety, and increasing customer

    satisfaction. While most of these solutions have been beneficial to both firms and

    travelers, technology can also raise new concerns. One example is in cargo shipping. The

    rise of 3D printing has led to a decrease in business for shipping companies.7 Further,

    smaller companies and governments on limited

    budgets cannot always compete on the

    technological front. The cost of finding,

    implementing and using new technologies is

    often unfeasible for companies. It is important

    for organizations of all sizes, however, to be

    looking for the market edge. Organizations can

    achieve this goal through constant dialogue with

    their customers and employees. Each of these

    groups can offer insight into what kinds of

    technological advances are appropriate for

    them.

    Security and Safety

    Prepare for shifting technology trends

  • Using the Crowd

    Crowdsourcing is a growing trend for many

    organizations who are looking to harness

    the power and knowledge of the people in

    order to create thoughtful innovations.

    Open innovation was popularized by

    Henry Chesbrough, to describe using

    internal and external knowledge to

    accelerate the rate of an organizations

    internal innovation. In practice, this creates

    an open, collaborative platform in which

    everyone can participate in solving a

    problem. In the transportation industry,

    both employee and traveler voices provide

    invaluable insight and value to a companys

    strategy.

    Amtrak, a train service company, recently used the opinions and ideas from the crowd to

    better improve service to their customers. Amtrak used IdeaScale to reach out to customers

    and industry professionals to complete their project.8 Types of feedback, technology

    communication, and feedback response were the three areas that Amtrak looked into

    improving. Amtrak successfully implemented this feedback which resulted in a mobile-

    enhanced site that provides real-time status of trains. Their newer site design also lends

    itself to more transparency when it comes to discounts, travel rewards, and tips for frequent

    customers. Like PAT, Amtrak has come a long way in mirroring the more dynamic innovation

    of its competitors.9

    6INNOVATION IN TRANSPORTATION

    Sample idea submission form from OneBusAway

  • 7

    Using the power of the crowd to harness ideas for

    problem solving is an efficient and effective strategy.

    The transportation industry, across both public and

    commercial sectors, faces increasing competition and

    concerns. In order to differentiate themselves in the

    market and provide the best service for users,

    organizations need to rely on innovation to stay relevant and

    competitive. An innovation platform, such as IdeaScale, provides a

    platform for open communication and idea collection. Implementing IdeaScale into your

    companys strategy can improve employee engagement and elicit new solutions to old

    problems. IdeaScale is easy to utilize, and with innovation experts by your side, your

    organization will be led to the forefront of innovation. Learn more about what IdeaScale can

    do for your organization here.

    INNOVATION IN TRANSPORTATION

    1. http://triblive.com/x/pittsburghtrib/news/education/s_690913.html#axzz3u4g0lBVf

    2. http://www.post-gazette.com/business/businessnews/2012/06/29/CMU-spinoff-gets-Dept-of-Transportation-

    grant-for-Tiramisu-transit-app/stories/201206290151

    3 https://assets.kpmg.com/content/dam/kpmg/pdf/2014/12/

    transport-perspectives-nov-2014.PDF

    4. http://www.dailymail.co.uk/travel/travel_news/

    article-2813863/Controversial-Ryanair-boss-admits-no-

    frills-carrier-nicer-customers-sooner.html

    5. http://www2.deloitte.com/content/dam/Deloitte/us/

    Documents/consumer-business/us-cb-transportation-

    trends-031915.pdf

    6. http://www.computerweekly.com/feature/Cyber-crime-

    what-every-business-needs-to-know

    7. http://www.strategyand.pwc.com/perspectives/2015-

    commercial-transportation-trends

    8. http://www.tcrponline.org/PDFDocuments/

    tcrp_rpt_179.pdf

    9. https://opendot.ideascale.com/a/ideas/top/campaign-filter/

    active/tags/data+amtrak+open+transit+gfts

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    Conclusion

    http://triblive.com/x/pittsburghtrib/news/education/s_690913.htmlhttp://www.post-gazette.com/business/businessnews/2012/06/29/CMU-spinoff-ghttps://assets.kpmg.com/content/dam/kpmg/pdf/2014/12/transport-perspectives-nov-2014.PDFhttp://www.dailymail.co.uk/travel/travel_news/article-2813863/Controversial-Ryanair-boss-admits-no-frills-carrier-nicer-customers-sooner.htmlhttp://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-transportation-trends-031915.pdfhttp://www.computerweekly.com/feature/Cyber-crime-what-every-business-needs-to-knowhttp://www.strategyand.pwc.com/perspectives/2015-commercial-transportation-trendshttp://www.tcrponline.org/PDFDocuments/tcrp_rpt_179.pdfhttps://opendot.ideascale.com/a/ideas/top/campaign-filter/active/tags/data+amtrak+open+transit+gftshttp://ideascale.comhttp://ideascale.commailto:sales@ideascale.comhttp://triblive.com/x/pittsburghtrib/news/education/s_690913.htmlhttp://www.post-gazette.com/business/businessnews/2012/06/29/CMU-spinoff-ghttps://assets.kpmg.com/content/dam/kpmg/pdf/2014/12/transport-perspectives-nov-2014.PDFhttp://www.dailymail.co.uk/travel/travel_news/article-2813863/Controversial-Ryanair-boss-admits-no-frills-carrier-nicer-customers-sooner.htmlhttp://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-transportation-trends-031915.pdfmailto:sales@ideascale.comhttp://www.computerweekly.com/feature/Cyber-crime-what-every-business-needs-to-knowhttp://www.strategyand.pwc.com/perspectives/2015-commercial-transportation-trendshttp://www.tcrponline.org/PDFDocuments/tcrp_rpt_179.pdfhttps://opendot.ideascale.com/a/ideas/top/campaign-filter/active/tags/data+amtrak+open+transit+gfts