Digital Transformation 3 min

Is the future of transport free transport?

RZW pasfoto 2020
Ruben van der Zwan
CEO & Co-Founder
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public transportRecently on the side of the world economic forum there was an article on Estonia’s plans to offer free public transport countrywide to all of its citizens. This is an extension of the schema that was introduced five years ago in the Estonian capital of Tallinn where 75% of citizens voted in a referendum yes in favor of free public transport. Free transport means that it need to be smart transport too. In this blog I’ll explain why.

Green card

In Estonia, the only caveats are that you have to register as a resident of the city Tallinn (which also means the city gets to collect taxes from your income) and pay two euros for a “green card”. This green card is essentially a smart card that is used to check in and that is personalized when you are registered as a citizen of the city. For tourists, it’s also possible to get the green card but in that case, it’s a regular non-personalized smartcard that you use to check in to the public transport.  

The naysayers originally were the very vocal about the chances of free transportation. It couldn’t and wouldn’t work. One of the cited reasons wasn’t of course the cost of maintaining the infrastructure as well as running it. A monthly pass in other countries Capital Cities will set you back easily over hundred and fifty euros per month. As Estonia has a relatively small population of about 1.3 million people and telling has about 400,000 people living there the field was that maintaining the infrastructure would be impossible. Especially when you consider that, and he seems likely, making public transport free will increase the use of it. But to make a long story short, the naysayers were wrong. It is said it is said to make a profit of €20 million per annum since it started. One of the reasons of course to make free transportation also available in other cities and regions in Estonia.

There are also some effects that were not factored in. Environmental goals were also part of the scheme because when people take the transport they leave their cars at home eating traffic congestion and reducing evolution. An analysis found out that a year after it started the use of public transport and increased by 14%, however, use only declined by 5%. The shift came from people who would normally walk and now would take the bus as well as increase in the average distance traveled by car. So, it’s not the no-brainer that you think, making it free doesn’t get people out of their cars.

Smart transit

If you want to make public transport free, you first need to make it smart. Smart allows you to manage, monitor and monetize it. It is not a coincidence that this is also the key capabilities and API Manager should have. However, there are a few words so often misused as the word smart. By putting this word in front of a noun marketeers are hoping that you will buy it. I do mean it literally but also figuratively. What is so smart about the current generation of smart refrigerators? I would argue that this is more a marketing hype than real substance.

But it’s quite different for transit. Smart transit, for me, is the integration of IOT devices with any vehicle used in public transport, like light rail, trains, buses and the like. Using API management, event driven technology and mobile apps and environment is created that has a benefit for both the traveler as well as the transport organization itself. Using a smart card to check in and out of public transport within event driven architecture enables you to keep your finger on the pulse of traffic. In combination with artificial intelligence and machine learning you can anticipate on the traffics for days to come for instance when it’s correlated with the weather. You can be notified about certain spikes in traffic on certain lines and with the right contingency plans in place take measure to counterbalance.

I’m not sure whether the future of transport should indeed be free. It depends on many factors and as we saw from the Tallinn example likely outcomes that seem logical might not materialize. So, before you want to consider that, some rigorous studies should be performed including some scenario planning. But I do believe future of transport is smart. If you want to know more about what smart transit is, we have a very good white paper on this topic that you can download below for free.



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