The up-and-coming bus service will optimise its route and consider real-time commuter demand. It poses a threat to existing players like Grabshuttle.
Singapore’s Land Transport Authority (LTA) has plans set for the nation’s on-demand bus service. After its call for tender in August 2017, it has awarded close to S$500,000 (US$380,000) in contracts. Out of 10 proposals, two tenderers outshone its competitors with its comprehensive offerings. This is the first of the two-phase tender. The second phase will happen in the third quarter of 2018. After which, operational trials will begin in the fourth quarter of 2018.
The two awardees for the first phase tender are Via Transportation, Inc. (VIA) and Ministry of Movement Pte Ltd (SWAT). The former has been providing on-demand bus services in cities like New York since the year 2012. Whereas, the latter is a local startup with less than two years of service. Both parties will develop a dynamic matching and routing algorithm. The bus deployment methodology will consider real-time commuter demand, pick-up and drop-off points.
Source: Straits Times
On-demand, dynamically-routed public bus services is a part of LTA’s roadmap
Mr Yeo Teck Guan recognised the success of ride-hailing. He is LTA’s Group Director of Public Transport. He noted that data analytics and mobile application technology had revolutionised commuters’ travel. The use of such technology can help public bus services optimise precious resources. At the same time, there will be better services to commuters. Wise leaders and strategic initiatives to become a smart nation will benefit Singapore. Singapore will soon join the list of cities with Smart Urban Mobility solutions.
In February 2018, LTA also released a Land Transport Industry Transformation Map (ITM). The initiatives outlined in the ITM will leverage on emerging technologies. LTA wants to make the nation’s land transport system smarter. It will set aside S$25 million (US$19 million) for the Land Transport Innovation Fund. Over five years, the money will support mobility-related research and technology trials.
Autonomous vehicles and on-demand shuttles will transform intra-town travel by 2022. The pilot deployment will begin in Punggol, Tengah and the Jurong Innovation District. The good news comes at a timely moment as the nation struggles with its train rail woes. Previously, LTA has rolled out three-door buses. The novel idea was a hit as the citizens appreciated such improvement in commuter flow.
LTA’s brainchild will threaten the existing players
LTA is not the first mover in the local bus-pooling scene. Current players like Grabshuttle, ShareTransport and Beeline may lose its users. The Infocomm Development Authority (IDA) and LTA launched Beeline in August 2015. It is a crowd-sourced bus service that is available on a mobile app. In 2016, the transport operators from the private sector launched ShareTransport. In March 2017, Grab launches Grabshuttle.
As of August 2017, there are 130 routes run by seven private bus operators, including Grab. Current offerings are crowd-sourced routes. Some of them require users to subscribe to a monthly service. When LTA’s on-demand bus service goes live, existing customers may switch over. Customers will flock towards the cheapest and most reliable service. It could be a repeat of history, like how traditional taxi industry got disrupted by Uber and Grab.
However, the results are not final
The on-demand bus service tender is still in the first phase. The operational trials may or may not produce promising results by end 2018. If it does, the technology and price point will change the competitive landscape. LTA’s on-demand bus pool services will have technological superiority and refined algorithm. The backing from LTA will also reassure the public. Commuters can still board the regular bus services. Alternatively, they could try the LTA’s bus pooling service. These are added advantage over the incumbent players.
However, there could be technological advances from now until the year 2022. Government authorities usually have red tapes that delay the execution. LTA would have only piloted autonomous vehicles in three areas in 2022. A rollout for the whole Singapore would take an even longer time. Given Grab’s speed of growth, it could have developed similar technology. Grabshuttle may have cemented its market share. This is assuming the government does not issue out any new regulations. Over-popularity of private bus pooling service may erode its bus revenue.
Also, SWAT has its own a ride-sharing app. It offers a flat fare of S$5 (US$3.80), and drivers will not be able to cancel on the passengers. The app has a strong reliance on data analytics and technology. Trips are only added to the driver if the estimated time of arrival stays the same. Existing passengers onboard will not have to be delayed by new passengers. SWAT is one of the two awardees for LTA’s tender. It is still unclear if SWAT and LTA’s new service will cannibalise each other. Nonetheless, LTA’s decision to have both SWAT and VIA is good. It can combine SWAT’s technological know-how and VIA’s operational experience.
Regardless of the success of LTA’s on-demand bus services, LTA has an excellent vision. It considers Singapore’s future needs and makes progress to be an enabler for the economy.