Why public transport needs to be transformed

This is an extract from: Digitalization of Public Transport in the Nordics & Baltics. You can download the full report here.

In recent years, public transport ridership levels have remained constant while operating costs have continued to rise. At the same time, the environmental impact of public transport operations has received a lot of attention. To fulfil its potential, public transport must achieve three goals:

1. Increasing ridership

The key metric in any public transport operation is ‘bums-on-seats’. However, in recent years - even before the COVID-19 pandemic - ridership levels had stagnated. For example, the share of public transport in Sweden remained unchanged at 31 percent between 2018 and 2019. Other Nordic and Baltic countries showed a similar pattern despite significant investments.

2. Reducing costs

Being ‘cheaper than taking the car’ is a key decision criteria for people choosing public transport. Cost efficiency is a key part of ensuring financial sustainability regardless of whether public transport is subsidized or not. Operational costs have increased by almost 50 percent in Sweden since 2009 and by over 70 percent in Norway between 2005 and 2016. Greater operational efficiency is needed in order to reduce these costs.

“When listing the main drivers for adoption of IoT enabled solutions, 60% of the interviewees highlighted cost savings as the primary driver” 

3. Reducing environmental impact

On a macro level, public transport is important to reduce the number of cars on roads and their corresponding emissions. On a micro level, every step needs to be taken to ensure that public transport operations themselves are as clean and sustainable as possible.

Sustainability in focus

Public transport is seen as a key enabler of sustainability on many levels:

• At an EU level, public transport is a key part of the plan to reduce greenhouse gas emis- sions from transport to 60 percent of the 1990 levels by 2050.
   
• On a country level, it is seen in initiatives such as Norway’s zero growth target for car traffic, which will mean increasing public transport trips by 50 percent between 2014 and 2030.
   
• It is also seen at a city & municipal level, with examples such as Copenhagen’s CPH 2025 goal to increase walking, biking, and public transport to at least 75 percent of all journeys by 2025.
   
• Most importantly, it is seen at a consumer level, with members of the public becoming increasingly aware of the environmental impact of their decisions.

Read more about how digitalization is helping the public transport industry to achieve these goals in our report "Digitalization of Public Transport in the Nordics and Baltics".

Download the full report