The technologies driving change across the transport sector

From mobile apps to social media sites, satellite navigation systems to smartcards, technology is transforming the way people use and pay for transport services.

A revolution is afoot across the transport industry. Mobile apps, social media and interactive websites place real-time information at users’ fingertips, enabling them to make ever more informed travel decisions and product choices. Equally, new technologies have given transport providers access to a wealth of relevant data that allows them to better tailor their offers to influence user behaviour.

The combination of more informed consumers, flexible payment methods and the ability to access real-time data means that transport providers can adopt a more dynamic pricing model. This, in turn, can help them achieve a range of social and commercial objectives.

Over the course of two blog posts, we’ll discuss the impact of new technologies on the transport sector and its pricing structures. This blog, the first in the series, will identify the key technologies that are enabling major change. The second blog will examine the real-world application of these technologies, and discuss how they are helping providers meet global transport goals.

Top flight technologies

Although there are a great many technologies associated with the pricing of transport services, we have limited our discussion to those that enable dynamic and real-time pricing. Given the pace at which new technologies develop, this is by no means an exhaustive list, and no doubt there will be more to explore before the year is out.

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GPS

Satellite navigation systems, such as GPS, are used to provide real-time vehicle positioning information – including longitude, latitude, direction and speed. These details are then integrated with map-matching algorithms to create the on-board ‘sat navs’  that so many of us rely on to get from A to B. Already widely used throughout the transport sector, these systems are continually improved for greater accuracy and reliability.

Tags and transponders

Used for access control and to provide real-time vehicle location information, there are several types of tags and transponders. Radio Frequency Identification (RFID) tags are the most common, and these are encoded with vehicle and/or driver information that can be read by RFID readers using radio waves. In access control applications, the reader may hold information relating to allowed vehicles and provide access based on this.

Data loggers

These electronic devices record vehicle and sensor data over time or in relation to location, and securely transmit it through a cellular connection or via Bluetooth to a digital platform. They can be connected to an on-board diagnostics port, and are increasingly used for fleet management, insurance purposes and to record miles driven for transport pricing.

Smartcards and mobile phone apps

The development of alternative payment methods such as smartcards, contactless payment cards and mobile phone apps like Apple Pay have revolutionised the way transport products are priced. Operators can now promote services based on real-time circumstances, sending messages and updates to users so that they can access pricing information and adjust their travel behaviour accordingly.

While phone based technology has proved invaluable to increasing service providers’ understanding of user behaviour, recent trends have posed privacy concerns. As increasingly advanced technology is adopted within the travel industry, these concerns must be monitored and addressed continually to protect users’ data.

Software development

Parallel developments in software have also played a key role in transforming the pricing of transport. Revenue management systems, which originated in the airline industry, are now routinely applied across the sector. As well as generating revenue maximising algorithms, which create bespoke pricing structures according to demand, these systems give operators the ability to integrate pricing with other systems to optimise their marketing, scheduling and catering offers.

Future direction

These technologies have established a shared language between consumers and transport providers in which data is openly exchanged to develop dynamic pricing models that benefit both. In our next blog, we’ll explore how these models are being applied in the real world and understand the value of these innovative technologies in action.

Want to read more? In his second blog, Phil explores how new technologies are helping achieve global transport objectives.