The announcement today that FirstGroup has reported a £356m loss along with change at the top of the transport group provoked me to recall three key statistics which stood out when researching this year's Annual Survey of Mobility as a Service.
One is the reduction in travel demand over the last decade.
We make 16% fewer trips than 1996, travel 10% fewer miles than in 2002 and spend 22 hours [per year] less travelling than we did a decade ago [1]
The second is the relative size of transport markets.
Whilst rail and bus fare expenditure in the UK is somewhere north of £12 billion per year, our annual household expenditure on motoring is around the £100 billion mark.
The third is that despite these vast markets, the profits in the transport and automobile industry rarely make it into double digits. The figures below are 2017 profits:
Stagecoach operating profit is 4.89% on revenue is £3.9 billion.
Toyota operating profit is around 5% on revenue of around £200 billion
These companies are all seeking to entice customers who have a declining interest in travel. This decline is most marked in younger people. Millennial and generation Z (young people born since 1981) are taking up driving licences at significantly lower rates than previous generations.
The response in the automotive industry has been to:
Diversify - e.g. Ford becoming a mobility company with bike share fleets and micro transit
Unite - e.g. Mercedes-owner Daimler AG has merged its mobility services with BMW - to provide a broad and diverse mobility offer including car clubs, on demand and shared transport
Enable universal access - e.g driverless cars reduce the technical skills and driving licence requirements to access car travel, apps create new ways of people accessing transport e.g. Uber, Via etc which all have automotive investment
In contrast, public transport operators seem wedded to a business models of opaque fares, passengers unable to transfer tickets between operators and services which do not join up. Even the small number of innovative new services are operator specific which does not help to create seamless multi-modal journeys.
To be fair, the UK Competition and Markets Authority has not exactly helped by forbidding operators to communicate on services, tickets and fares - however regional transport authorities and ticketing companies are expressly exempt from these rulings and should provide a mechanism to create better networks for the people they serve.
Then there are the Mobility as a Service providers. They too can help provide seamless, convenient and cost-effective travel for consumers. But until we see a 'make it happen' approach to MaaS from all the public transport operators, I fear that their fate is declining market share and FirstGroup-style losses.
* Or women, or children
[1] All Change? The future of travel demand and the implications for policy and planning, The First Report of the Commission on Travel Demand