Highway lessons for the city
Innovations such as Telepass have reduced delays and improved circulation, saving billions, on highways around Italy and Europe. The time has come to leverage the lessons learned and take them downtown to alleviate traffic jams, parking and the growing volume of delivery services.
Since 1990, Telepass has built its success around a business model based on “convenience” for both hauliers and motorway operators. The concept is based on an interconnected network that enables the users of Electronic Tolling to have just one service provider regardless of the number of operators used during a certain period of time. This ensures that they can very efficiently manage their toll expenses, which represent one of the most significant costs for transport companies.
For operators, the Telepass payment system offers lower merchant fees thanks to the fact that our electronic payment scheme is one of the most efficient in the world. The high level of efficiency could be linked to the adoption of the so-called three-party model (customer – payment system – operator), as opposed to the better known four-party model (customer – issuer – acquirer – operator) used in plastic-based payments. In addition to this, Telepass processes transactions internally, thus avoiding the outsourcing costs incurred by the traditional players.
Finally, Electronic Tolling also generates a number of positive externalities, linked to the reduction in carbon emissions. Just think of the amount of energy needed to get a truck weighing 3.5 tonnes up to 50kmh after it has been stood still waiting to pay a toll by credit card or cash.
As today, the combination of these elements has made tolling the only truly cashless form of payment, with 65% of transactions carried out electronically, rising to 90% in the HGV segment. A As example, take into consideration that, on average, electronic payments account for 20% of transactions in Italy.
Cities, above all the new smart cities, can leverage from this experience, not only in terms of cutting costs and pollution, but also in terms of the potential for enabling a new idea of sustainable mobility, based on the MaaS or “Mobility as a Service” concept.
Since 2016, Helsinki residents have been able to use an app called Whim to plan and pay for all modes of public and private transportation within the city. This offers real potential to upscale connections that are already connected: cars, streets, speedway, taxis, public transportation, ride sharing systems or Uber.
The exponential evolution of information technology and cultural trends aims to break down the boundaries between means of transportation or between ownership and usership. In fact, the digital world, in which the language of data is spoken, puts resources and users in touch with each other. The MaaS model doesn’t itself focus on building new vehicles or operating transportation systems; it simply combines all existing services in the best possible way.
Anyone with the app can enter a destination, select his or her preferred mode of transport or, in cases where no single mode covers the whole journey from door to door, a combination of modes and go.
All smart cities will, soon or later, have to raise their sights. The goal is to make it so convenient for users to get around that they opt to give up their personal vehicles for travelling about the city. Not because they’re forced to, but because the alternative is more appealing.
Something similar happened to streaming services, such as Netflix. They have fundamentally changed the way people search for, consume, and pay for media. Transportation now stands at a similar frontier.
Rather than having to locate, book, and pay for each mode of transportation separately, MaaS platforms allow users to plan and book door-to-door trips using a single app. By answering the question of how best to get individual users where they want to go, based on real-time conditions throughout the network, taking account of all the possible options and each user’s own preferences (for example, time and convenience versus cost), and facilitating seamless mobile payment, MaaS starts to move us towards a more user-centered concept of mobility.
To make all this a reality in Italy too, Telepass has a key role to play in adopting true Urban Mobility. Based on the example provided by motorway operators, it is necessary to interconnect all the various forms of transport through an efficient form of payment capable of creating an entirely new customer experience. Just think what it would be like to be able to use any service without having an endless number of different accounts, linked to as many payment instruments, all multiplied by the number of cities we have to travel around each week.
There will be numerous advantages for public authorities, ranging from reductions in road congestion to more efficient use of parking spaces, from cuts in fine particles to the improved ability to set tolls based on the effective use of each different form of transport and the pollution caused.
There is still much to do before we can implement real MaaS in Italy, in terms of both encouraging public authorities to adopt shared communication standards and convincing the private entities that already operate in the sector to view users not just as customers to be provided with a single service, but as citizens who need to be able to access all the services offered by a fully smart city throughout an urban area. Limiting access to other services, or making it difficult to access them, is not the way to beat the competition.
The challenge has been set and all operators are devising their strategies. As citizens and as operators in this sector, we can’t wait to see which model will prove to be the winner.