Last week, I took a bus to get from Munich to Darmstadt. I decided to not take a train despite being a huge fan of the Deutsche Bahn. In the past, there was no question whether to take the train. I just took the train to travel from one city to another. I wouldn’t have thought about any alternatives, especially not taking a bus. However, when looking at prices for tickets, one might start to reconsider. The train would have cost roughly 80€, while the bus ticket was about a quarter of the amount. I decided that one should have experienced both options and the bus ride offered me plenty of time to think about transportation in general.
So, what’s the difference between a train and a bus? In principal, both are means of transportation to get from place A to place B. The major difference is that one needs tracks, while the other just requires a road. From the consumer’s point of view, this shouldn’t make any difference. Time, costs and comfort make a difference. This reminds me of the project management triangle: You can have two things, but never all three! Taking the train certainly is not famous for being incredibly cheap and the bus is not known to be fast. The Deutsche Bahn is struggling to stand its ground against the bus companies and the bus companies are still fighting to increase their market share. This kind of competition is good for the customer, but who is going to be the winner in the end? Trains? Buses? I believe, none!
What did we learn from the business models of Amazon, eBay, Spotify, and many others? They all sell things they don’t own and their asset is just the data they have. Will the Deutsche Bahn be successful because they own so many trains, or because they own the data which they can use to predict how I want to go from Munich to Darmstadt? The company which really focuses on their customers’ problems is the one going to persist. The others will own trains and buses.
I believe any good transportation company should follow the following principles:
- A customer has only one ticket for a trip, no matter how many buses or trains are needed for the trip.
- There is no reasons to have ‘pricing zones’. It doesn’t matter to the customer how many of those zones he needs to cross. It just matters to get from A to B.
- Finding a route is an optimization problem with time, cost and comfort as the variables.
- The transportation market is an open market. Anyone who can offer a mean to get from A to B can participate. Consider it a meta-Uber.
- The only reason for customers to leave their data with the transportation company is to make the next trip easier.
- Any transportation company should not worry about existing or new bus companies. The only thing they should worry about is Google.
In essence, I believe that there is only a marginal difference between a train and a bus. What really matters is the customer journey and Google has shown that it understands very well what customers want.