Swift turn­around is the route to suc­cess for bus tech firm

Ir­ish com­pany Ci­tySwifter saw its fu­ture in sell­ing its tech­nol­ogy and not in op­er­at­ing bus routes

The Irish Times - Business - - BUSINESS INNOVATION - Olive Keogh

The hum­ble bus has been around a long time – since 1895 in mo­torised form, ac­cord­ing to Mercedes-Benz, which claims brag­ging rights to the first mo­torised ver­sion. Over a cen­tury later buses are still with us and thriv­ing.

“Bus trans­port is es­ti­mated to be a larger in­dus­try glob­ally than avi­a­tion in terms of an­nual rev­enues and pas­sen­ger num­bers,” says Brian O’Rourke, co-founder of trans­port so­lu­tions com­pany Ci­tySwifter, which has de­vel­oped a sys­tem to “make ur­ban buses as ef­fi­cient as Ryanair’s planes”.

The ori­gins of Ci­tySwifter go back to 2016 when O’Rourke and school friend Alan Far­relly linked up to cre­ate Huddl, a B2C busi­ness that set out to do for pri­vate buses what Hailo did for taxis – make them more eas­ily ac­ces­si­ble to com­muters.

How­ever, in what has been a hec­tic cou­ple of years for the start-up, the com­pany has changed both its name (due to a trade­mark is­sue) and its busi­ness model in a ma­jor pivot from B2C to B2B hav­ing re­alised that the real op­por­tu­nity lay in sell­ing its tech­nol­ogy, not in op­er­at­ing bus routes.

O’Rourke (al­ready a grad­u­ate in in­for­ma­tion sys­tems) first came up with the idea for the busi­ness when pre­par­ing for his fi­nals in busi­ness stud­ies at DCU.

“I had a light­bulb mo­ment when it struck me that there should be a so­lu­tion for book­ing pri­vate buses on­line. Bus op­er­a­tors would ben­e­fit from the in­creased util­i­sa­tion of their ve­hi­cles, while pas­sen­gers would ben­e­fit from bet­ter ac­cess to a qual­ity shared trans­port net­work. It was a win-win so­lu­tion. Alan’s fam­ily have been in the bus trans­port busi­ness for over 35 years, and this gave us ac­cess to good qual­ity in­dus­try in­for­ma­tion for our fea­si­bil­ity study.

“Our orig­i­nal idea worked to a cer­tain ex­tent and we re­ceived some steady and promis­ing early trac­tion,” O’Rourke adds. “But ul­ti­mately the scal­a­bil­ity of the model was un­achiev­able and it was go­ing to be hard to break even. The Dublin Bus strike, which hap­pened around the time we launched, worked in our favour early on, but when it ended it was dif­fi­cult to main­tain the vol­umes as we couldn’t ac­cept the Leap card and Dublin Bus also upped their fre­quency. The good thing was that our tech­nol­ogy stood up so it was then a ques­tion of how best to use it.”

Unique un­der­stand­ing

Ci­tySwifter’s lucky break came when the DCU Ryan Academy ar­ranged a meet­ing for the founders with Robert Mont­gomery, a former CEO of Dublin Bus and ex-man­ag­ing di­rec­tor of one of the UK’s largest bus com­pa­nies.

“We built a re­la­tion­ship with Robert and took him on as an ad­vi­sor. This en­abled us to get a unique un­der­stand­ing of the UK mar­ket, the op­er­a­tional chal­lenges com­pa­nies faced, and in­sights into their in­abil­ity to use data to solve those chal­lenges.

“Buses are still a ma­jor form of trans­port. In Dublin over 125 mil­lion jour­neys are com­pleted by bus each year, and even in Lon­don twice as many peo­ple are moved by bus as by the un­der­ground at 2.6 bil­lion ver­sus 1.3 bil­lion an­nu­ally,” O’Rourke says.

“Our sys­tem will work in any coun­try, but we are start­ing in the UK where the mar­ket is pri­va­tised. Our tar­get mar­ket is bus com­pa­nies op­er­at­ing high fre­quency routes in big ur­ban cen­tres, and we have just signed our first ma­jor client in the UK which in­volves a fleet of 8,500 buses. We also have deals pend­ing with two other com­pa­nies, in­clud­ing one with op­er­a­tions in 14 Euro­pean coun­tries.”

Ci­tySwifter’s dy­namic rout­ing tool al­lows it to iden­tify pas­sen­ger de­mand in real time.

“We’re do­ing for buses what low-cost air­lines did for avi­a­tion – ad­dress­ing in­ef­fi­cien­cies,” says O’Rourke. “How­ever, un­like the avi­a­tion in­dus­try, the ur­ban bus hasn’t evolved with the ad­vance­ments in tech­nol­ogy. Current bus net­works are largely out­dated, and most op­er­a­tors are not us­ing data an­a­lyt­ics to op­ti­mise them.

“By us­ing a com­bi­na­tion of big data and pre­dic­tive an­a­lyt­ics we can ad­just fre­quency to en­sure shorter lay-over times, avoid the crush of over-full buses and make routes gen­er­ally more ef­fi­cient.

Pas­sen­ger de­mand

We’re do­ing for buses what low-cost air­lines did for avi­a­tion – ad­dress­ing in­ef­fi­cien­cies

“We are also able to pre­dict what the pas­sen­ger de­mand is go­ing to be at each bus stop, and how long the bus will take along each route of the net­work in the fu­ture. This en­ables the bus com­pany to cre­ate the most pas­sen­ger-adapted sched­ule pos­si­ble.”

O’Rourke says the com­pany’s plat­form has gen­er­ated a lot of in­ter­est be­cause bus op­er­a­tors know their net­works are in­her­ently in­ef­fi­cient and un­re­li­able, not least be­cause their timeta­bles are static while other ex­ter­nal vari­ables, such as traf­fic and weather con­di­tions, con­stantly change.

What’s also changed is how peo­ple use buses. His­tor­i­cally they went from A to B on one bus. Now Ci­tySwifter’s re­search has shown that they typ­i­cally travel fur­ther – from A-D – and make two or three changes along the way. How­ever, many bus com­pa­nies have not al­tered their op­er­a­tions to re­flect this shift in be­hav­iour.

“We give the op­er­a­tors the tools and in­sights to pre­dict, plan and re­act to these vari­a­tions in ad­vance, which re­sults in ef­fi­ciency gains, im­proved prof­itabil­ity and an en­hanced ser­vice for pas­sen­gers,” says O’Rourke. “New en­trants such as ride-hail­ing com­pa­nies have put in­creased pres­sure on bus net­works, and the bus is be­ing forced to adapt to re­main com­pet­i­tive and re­tain mar­ket share.”

Growth

Ci­tySwifter is based in Gal­way, where it em­ploys six peo­ple. This is ex­pected to grow to 17 by the end of the year.

“We have re­cruited some of Ire­land’s most tal­ented math­e­ma­ti­cians, com­puter and data sci­en­tists, and cur­rently have two em­ploy­ees who got the high­est re­sults in maths in the coun­try when they sat their Leav­ing Cer­tifi­cates,” O’Rourke says. In­vest­ment in the com­pany to date has been about €140,000 through per­sonal fund­ing and sup­port from En­ter­prise Ire­land. The com­pany is now rev­enue-gen­er­at­ing.

An­other lucky break for Ci­tySwifter, a key to its suc­cess in get­ting a foothold in the UK mar­ket, was land­ing a place on a trans­port-fo­cused ac­cel­er­a­tor run by Wayra (Tele­fon­ica’s start-up arm) and Cat­a­pult (the UK gov­ern­ment’s R&D hub for in­tel­li­gent mo­bil­ity) in Mil­ton Keynes. More than 60 in­ter­na­tional start-ups ap­plied and just seven were cho­sen.

“This pro­gramme gave us the con­fi­dence to ap­proach big cor­po­rates in the UK, and we’ve also been working closely with Tele­fon­ica’s Smart Steps team and been given ac­cess to their anonymised and ag­gre­gated mo­bile phone net­work data. We are be­gin­ning to use this to op­ti­mise ur­ban bus net­works in pi­lot projects with ma­jor bus com­pa­nies,” says O’Rourke.

“Our de­ci­sion to pivot was def­i­nitely the right one as just re­cently we’ve seen a num­ber of tech start-ups (that raised mil­lions from in­vestors) fail with a sim­i­lar busi­ness model. I guess the most painful part of the pivot was hav­ing to go back to the draw­ing board with the tech­nol­ogy stack hav­ing built it out for B2C for the pre­vi­ous 18 months. How­ever, the foun­da­tions were strong, we knew what worked, and this gave us a head start when it came to re­design­ing it for B2B.”

Alan Far­relly and Brian O’Rourke have just signed their first ma­jor client in the UK, which in­volves a fleet of 8,500 buses.

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