Why digital marketplaces are game changers for ground transport

Author: Safa Alkateb, CEO of Autocab

It’s no secret that ground transportation remains fragmented and often proves a challenge for travellers to navigate. Passengers travelling around an unfamiliar city will usually need to book tickets with several operators, covering different modes of transport.

Imagine you’re taking a trip to Paris, for example. After leaving the airport, you might jump on an overground train to get into the city centre, before taking the metro or a taxi to get to your hotel. Then while you’re staying in the city, you might rent a car to travel around. 

At least three of these steps will require you to download separate apps to access specific modes of transport. How much more convenient would it be if a single app allowed you to book everything?

This is where a digital marketplace can be game changing. It would consolidate multiple operators on to a single platform and make ground transport systems more fluid and reliable.

Drawing inspiration from other industries

Market consolidation is not a unique idea - other sectors have already pioneered this approach. If you cast your mind back 20 years, to when travellers first began booking hotels online, things weren’t as easy as they are now. They would either turn to a multinational brand that had hotels in all the major cities or do research to find out what independent hotels existed in that location.

Then aggregators such as Booking.com came along and revolutionised the industry, offering customers a single marketplace to get information on all hotels. This gave travellers greater visibility over the full range of accommodation available in an unfamiliar city.

While this was good news for the traveller, it was also great news for independent hotels who were put on a level playing field with larger brands – and it drove growth in the market. In a report by EY, 91% of smaller accommodation providers stated that being listed on a digital marketplace resulted in additional bookings.

This same concept exists in the airline industry, with travellers able to search for flights across multiple carriers quickly and easily through the likes of Expedia and Skyscanner. Although this means airlines and hotels end up paying fees to third parties, the benefits outweigh these costs.

The value of collaboration

In truth, we’re already seeing the concept of a digital marketplace being embraced by some of the bigger players in ground transportation, such as Uber and Jyrney.

Uber, for example, has formed cross-industry partnerships that enable passengers to book journeys with other transport providers via its app. This includes boat services via Thames Clippers in London, Yellow Cabs in New York and rickshaws in New Delhi. It is also looking to add coaches, trains and planes.

The ability to book with multiple operators via a single app helps to connect different transport systems and allows passengers to switch seamlessly between road, rail and river.

While consumer adoption may be in its infancy, it should be noted that we’re already seeing transport providers benefiting from cross system collaboration. For instance, if a train breaks down mid-journey in the UK, train operators can now ensure passengers get to where they are going by quickly moving customers into private hire vehicles and taxis.

This is possible because train companies can pass work to local operators on the national iGo network, which covers more than 90% of the country. The network has been built up over the course of many years and is continuing to grow exponentially today, helping to connect more operators with demand aggregators such as CMAC and Gett.

Connecting ground transport

When it comes to creating a more connected ground transport system, we shouldn’t be surprised to see private hire and taxi operators playing a significant role as they often provide the last mile solution passengers need. But they can also provide a form of glue that can pull disparate public services together.

It’s one of the reasons why Uber has been so keen to integrate local operators’ services within its app in the UK – through its new Local Cab feature. This is helping Uber meet demand around the country. But, importantly, it is also driving more work to local operators, helping them to grow their fleets and boost their drivers’ income.

As digital marketplaces connect more ground transport services in this way, everyone wins –passengers, the various transport operators and even the environment. With net-zero emissions targets front of mind, digital marketplaces are paving the way for the creation of a seamless ground transportation system that could finally provide a viable alternative to private vehicle ownership – helping to take cars off our roads.