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 born—a 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

3INNOVATION IN TRANSPORTATION

The evolution of PAT’s 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 organization’s

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 company’s 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

O’Leary, 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 it’s 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 organization’s

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 company’s

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

company’s 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

FOR MORE INFORMATION sales@ideascale.com

Global / Americas +1 800-549-9198

New Zealand +64-080-099-5088

Australia +61-02-9037-8414

United Kingdom +44-0-808-189-1476

Conclusion