Datas and mobile app: a new weapon to dominate

Getting a single ticket on a journey made up of various rail parts still seems out of reach in 2021, when ease of choice and payment should be the number one reason for people to return to the train. But there are reasons why this should never happen. We explain them to you.

There are in fact two problems that are evolving in parallel :

on the one hand the various public companies which only work for their national or regional market area, and which have no reason to invest in standardised IT systems, which are often too expensive for them, and which design IT products that are often home-made, sometimes with the help of specialised IT companies;
on the other hand, the major railway companies such as SNCF, Deutsche Bahn, SJ in Sweden or Trenitalia in Italy have very quickly understood that the apps, which equip all the smartphones in the world, are the ultimate weapon to assert their prominence and put small competitors out of business. In Sweden, it is estimated that 99% of the clicks for information and rail ticketing only go through the public platform SJ.se, which does not inform the competing operator MTR on the Stockholm-Göteborg line. Flixtrain reported the same problem with the DB’s Die Bahn portal.

International? Not a priority…
About the first problem, the arguments sometimes diverge, but they all come down to the notion that the railways are primarily a matter of national policy and the historic companies are given the sole task by the States of looking after national citizens as a priority. This is why ticketing is so different across Europe. The comparison with the air sector brings a mocking smile because this sector is, on the contrary, very internationalized, whereas the railway companies deal primarily with local traffic, which can represent 70 to 90% of trains! The Deutsche Bahn transports more than a billion people a year on the local and regional segment, far ahead of international traffic, which is considered « residual ». A DB executive judged this by saying: «how many English or French people visit a small Bavarian village or an unknow neighbourhood of Leipzig each year?», thereby estimating that there was no need to integrate all the regional ticketing systems.

We can’t blame him! Even outside the railways, the fare systems of all public transport in all European cities are all closed circuits, without exception. Don’t try to put an TfL ticket through a RAPT gate in Paris. This provides a ‘back to reality’ about Maas’ dream, the concept of ‘Mobility As A Service’. We realise that far from connecting dozens of operators, MaaS is above all a big fight for whoever has the magic app. In addition, the MaaS app in one city is no longer valid in another city. Everyone at home with their own ideas, that’s the cruel observation we have to make nowaday. In the end, there is only one object that can go through all the devices in the world: the credit card! In Brussels, for example, you simply point your Master or VisaCard on the bus or metro and the journey is debited. Very simple, practical, but you never know how much you are paying. Obviously, these are occasional small amounts of 2 to 5 euros for non-residents, and there is no need for heavy interconnections between computer systems. But we must remain vigilant: London tends to sell its famous Oyster Card, whereas for most tourists, TfL’s central Zone 1 is enough, mainly in « off-peak » period.

The right question to ask is how the airline competition manages to offer the totality of its pricing through numerous sites and applications that do not belong to it, such as Opodo or Expedia. There are lots of travel search engines and OTAs that can help you find the best deals, but there are few, if any, with railways. In addition, all local areas in Europe are covered by tariff systems focused on permanent residents, such as season tickets, which are cheaper than the single ticket. There is therefore no reason for the railways to become as international as the air sector.

Datas, the oil of the 21st Century
The second problem is the consequence of something completely different: apps have become a weapon for 21st century marketing. Both for cities and for rail operators. Objective: to become unavoidable and to counter competition. This is not really a climate objective, but the defense of one’s business area. The railway can even count on a major psychological trait: unlike air travel, people still talk about the train in the singular, addressing a single company. This ‘culture of single company culture’ seems to be engraved forever, even among the younger generations: in France, the word ‘train’ remains synonymous with ‘SNCF’, in Germany it’s ‘Deutsche Bahn’. Liberalization has not changed these societal habits. The expansion of the Austrian Nightjet is clearly part of a broader policy: «to make the ÖBB brand known throughout Europe,» explained the CEO. This means that Austrians hope above all that the term « night train » will be synonymous with « Nightjet ÖBB », just as the TGV is synonymous with « SNCF ». In this context, getting information and paying with an alternative app is simply not the first reflex and creates unease among new entrants.

Creating a strong brand and capturing data are the challenges facing new entrants, who already have to pay a very high entry fee to launch a rail service. Concerning their appearance on the app of the incumbent operators, the new entrants argue that these are « public service apps » paid for by the taxpayer and that they must therefore account for ALL the operators present on the rail network. As is the case with an airport app which shows all operators on departure or arrival. But the argument of the incumbent companies is just as clear: IT is an in-house product and in no airline company, for example, nor for that matter in commerce, one does not « share » one’s neighbour’s marketing data! The defenders of ‘every man for himself’ remind us that giants like Amazon have become… giants precisely because the power of their computer tool, which was able to impose itself in about ten years. Why shouldn’t small operators do the same? The UK has solved this problem through its platform ‘National Rail Enquiries’, but was obliged to do so because its railway is a composite of various operators.

This war of applications, coupled with the habits of the « single railway company », has been reinforced by the appearance of the new black gold of the 21st century: the data. Data is the new oil. Like oil, data is valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity. so, must data be broken down, analyzed for it to have value. Railway giants such as the SNCF, Deutsche Bahn or Trenitalia, abound with hundreds of billions of data. By analysing the business of Google or Amazon, these giants quickly realized the gold they had in their hands. With a major challenge: data exists in many different places in an organisation, and it is necessary to bring them together in a way that makes it easily viewable and useable. New operators generally do not have the resources for such datasets, as there are no customers yet. As a result, they are somehow « invisible » in the transport app galaxy. The major problem is then the creation of new monopolies, where prices remain high. The only weapon of the new entrants is to attack market at the level of social networks or to make a wide marketing campaign, following the example of NTV-Italo in 2012 in Italy.

It was thought that digitalisation would lead to an increase in the number of railway operators. But this does not work in such a capital-intensive sector as the railways. If the air sector has succeeded, it is above all thanks to the standardisation of aircraft and, in a way, of approach and take-off procedures. A pilot can fly as much in Spain as in Sweden or France: he won’t see much difference. In the rail sector, Europe is totally fragmented and not very internationalised.

National or regional missions on the one hand, the desire to keep one’s business on the other, a notorious indifference to internationalisation, which is not at the heart of public companies, that’s explains why the single ticket will remain a great dream and why it will be necessary to pay a complete journey piece by piece. If we could already line up an entire journey by a succession of QR codes rather than printing dozens of papers at home, that would already be a great step forward…