Transport & Logistics

Implications of on-demand transport for the rail sector

6 Jun 2018, by Amy Sarcevic

We live in a world in which it is considered normal to spend 35 per cent of our annual income on an asset we use less than 3 per cent of the time.

At present, the majority of New Zealand households own a car – but with the arrival of on-demand transport, this may be about to change.

On-demand transport differs from traditional timetable-based public transport. It allows you to book a shuttle to pick you up from your home or a predefined meeting point and take you either directly to your destination, or to a main transport hub; providing a better connected and more efficient end-to-end journey.

The concept of on-demand transport is not entirely new, but nowadays, advanced technology, widespread internet connection and mobile phone applications, all work to streamline the system; and to make it far more affordable as a daily means of transportation.

With the impending arrival of driver-less cars, operational overheads for on-demand vehicles will be even lower; increasing the potential to further improve retail prices and attract an even wider demographic.

Implications of on-demand for the rail sector

How likely is it that people will forego their cars in favor of on-demand transport? If so, what are the implications for traditional mass transit?

A recent report by Tony Seba at the US Think Tank, the RethinkX Project, claims that the average US family will save $5,600 per year in transportation costs, through the use of on-demand transport; which equates to a salary increase of 10 per cent.

As a result, they predict that, by 2030, 95 per cent of US passenger miles will be travelled via on-demand autonomous electric vehicles.

Transdev CEO, Rene Lalande, takes a slightly different stance; and believes that on-demand transport will complement, rather than obsolete, the use of mass transit systems.

“Providing the rail industry can adapt and work synergistically with on-demand transport, I believe the two systems will complement one another and may actually increase the number of rail journeys taken”, argues Mr. Lalande.

“On-demand provides a pathway for people who want to use public transport that did not exist before, particularly those in low density zones where demand for transport is low; and where it would not justify having a mass transit system”.

“In transport links to highly congested areas, rail will likely remain the preferred mode of transport for many. By providing an efficient connection to railway stations which serve these areas, on-demand will allow more people from regional and suburban areas to work in these high density zones”.

Transdev is currently undertaking two on-demand pilot schemes in Sydney, Australia, which have already shown great preliminary success, in terms of both uptake and customer satisfaction.

Presenting at the ARA’s New Zealand Rail Conference – 14-15 June 2018 in Auckland – Mr. Lalande will share detailed insights into the scheme and provide recommendations on how the New Zealand rail sector should adapt to this potential disruption.

Learn more and register.


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