Getting smart on data

The last five years have seen a growing interest in the concept of big data. Transport is no exception, and there is a real sense of anticipation about how new data sources could help deliver more efficient and reliable systems, better informed passengers and new products and services. Whilst there has been significant progress already, are these high expectations justified? And what can transport authorities do to help realise this vision?

Figure 1. Number of google searches for ‘big data’

google trends big data

Big data is commonly defined by the 3 Vs of volume, variety and velocity.

In a sense, transport planners have been doing ‘big data’ for decades, at least since the computer made it possible to develop complex models to simulate the operation of transport networks across large urban areas.

Building these models has traditionally required large scale, expensive and time consuming data collection exercises to describe the behaviour of individual households and the characteristics of transport networks.

So the underlying data certainly had volume and variety, if not quite velocity.

Since around 2000, the development of real time information began adding ‘velocity’ to the mix. This went hand in hand with a growing interest in journey planning information and the development of more sophisticated traffic control systems.

So what’s happened in the past five years to justify all the new excitement around data?

The key to understanding this lies in the way in which a combination of relatively recent technologies have changed the way information is collected and the type of information that is available. Advances in mobile computing, telecoms, remote sensing and cloud computing mean that large volumes of digital information on individual movements and preferences are now being collected passively at very low cost.

Some of this information is generated by transport authorities (smart ticketing, traffic sensors, GPS tracking of public transport vehicles, journey planners, real time information systems). But an increasing proportion relies on private devices, as well as infrastructure and software owned by third parties. [examples of Google maps and Strava].

Figure 2. Google Maps – Birmingham

google map directions v2

Figure 3. STRAVA app cycle ride density

 

strava heat map

New data sources can offer a cheaper alternative to traditional transport surveys. In some cases, they can actually give a richer picture about individual behaviour, the current performance of the transport system and even insights into how things are likely to change a short time into the future. In the right hands, it is easy to see how this can help transport users, decision makers and society at large.

But along with opportunities come some challenges.

One is that new data requires new tools and skills. Early experiences with bluetooth data illustrate the problem well. Inferring directionality, determining sample rates, identifying unique devices, converting the number of detected devices to number of vehicles are all new problems that require innovative solutions.

The highly analytical transport community is well placed to tackle the challenge but this will require an open mind, a degree of risk taking and some investment in staff development, at a time when transport authorities are facing severe financial constraints.

Another challenge is that new data requires new ways of working with an expanding community of data users and providers, which includes transport authorities, telecoms companies, academia, traditional transport consultants, analytics specialists, hardware providers, transport operators and a growing echo-system of independent app developers and tech start-ups.

This is beginning to throw up all sorts of questions around open data, data ownership, data integration, data quality, privacy, intellectual property, commercial confidentiality, profit v not-for-profit models and public v private ownership.

A fundamental question for transport authorities is what role should they seek to take – data creator, data integrator, commissioner, seed funder, entrepreneur, honest broker? Needless to say, this is an evolving debate.

Over the coming year, we will be engaging with the challenges and opportunities created by emerging data sources, starting with a workshop hosted at the Future Cities Catapult in mid-May. Exciting times ahead so expect more posts on this topic.

How well did transport really do in the Spending Review? The fine print analysed

c. Images_of Money on Flickr. Used under Creative Commons

A clearer picture on Spending Review outcomes is emerging, but important questions remain.

The 2013 Spending Round (commonly referred to as the ‘Spending Review’) announced a step change in infrastructure investment , backed by an impressive array of specific commitments .

But although the key transport capital budgets have emerged as obvious winners, the picture is less clear when it comes to some of Department for Transport’s (DfT) smaller grants.

At the same time, the unexpected decision to pool a substantial proportion of local transport capital funding into the Single Local Growth Fund (SLGF) makes the long term outcome uncertain.

A clearer picture is unlikely to emerge until the DfT clarifies its detailed spending plans for 2015 onwards and the results of the first SLGF competition emerge in the second half of 2014. The key points from the Spending Round are summarised below.

Treasury big picture:

  • The June Spending Round did not entail any net change in overall government spending relative to the March budget.
  • In reality, the annual year-on-year growth in total government capital spending between 2014-15 and 2017-18 will most likely fall below the rate of inflation.
  • The Spending Round did include some new capital funding commitments beyond 2018, with HS2 and the Highways Agency emerging as the big winners.
  • Although overall capital expenditure will be higher in 2014/15 than originally set out in the 2010 Comprehensive Spending Review (CSR), this will be at the expense of resource budgets, which will be 8.5% below original plans. This is of particular significance to local government funding, which has been the main source of savings.

DfT budget:

  • In 2015-16, the DfT’s budget will be 4.5% lower than in 2014-15 (as set out in the March 2013 budget).
  • Although DfT capital funding will increase by 6.7% (from £8.9 to £9.5 billion), its resource budget will go from £4.4 to £3.2 billion. The largest chunk of the saving will come from Transport for London’s (TfL) resource grant and assumed efficiency savings in Network Rail spending and DfT’s rolling stock procurement.
  • Our previous analysis of the 2010 CSR and subsequent budgetary announcements up to Autumn 2012 provides additional background information.

Local transport:

There will be a significant boost to key local transport capital grants in 2015-16:

  • +28% in real terms, relative to the 2014-15 budget
  • +16% in real terms relative to Labour’s 2010-11 budget

However, the unexpected decision to route a large proportion of local transport grants into Local Enterprise Partnerships (LEPs) via competitive growth deals makes it difficult to anticipate what proportion of this money will end up funding transport schemes in PTE areas.

The Spending Round said nothing about what will become of smaller competitive grants such as the Pinchpoint Fund, the Green Bus Fund, the Cycle Ambition Grant or the DfT’s contribution to the Regional Growth Fund. However, even if these were to be scrapped altogether, local transport capital funding would still increase by around 15% (in real terms) between 2014-15 and 2015-16.

On the revenue side, the current rate of Bus Service Operators Grant (BSOG) has been protected until 2015-16 and we also know that the DfT will manage a considerable Local Sustainable Transport Fund (LSTF) resource grant in 2015-16.

You can read our full analysis of the Spending Review on the pteg website.

Pedro Abrantes

CC myopic obsession with on-street competition risks doing more harm than good for passengers – but will this pave the way for Quality Contracts?

Transport authorities and bus operators have often been at polar opposites when it comes to the Competition Commission’s on-going investigation. However, there is one point on which we all seem to agree – the CC’s recent obsession with on-street competition is dangerous and largely misguided. What’s more, it risks getting in the way of high-end partnerships and could take us back to the Wild West of the late 80s. But is there a chance this could pave the way for Quality Contracts?

Vintage cornflakes box

Buses cannot be treated like a typical consumer product

Buses are not like cornflakes

Despite its earlier recognition that “head-to-head competition tends towards instability, the closer the competition between operators becomes” the CC’s latest position isn’t entirely surprising. In reality, there was always a risk that it might revert back to the safe and comfortable haven of perfectly competitive markets. This is the norm for most typical consumer products, say cornflakes, where there’s a permanent threat of competitors coming along and offering a similar product at a lower price. Retailers will put the competing products on their shelves and consumers will logically buy the cheaper one, placing pressure on the incumbent to review its offer.

The problem is that bus services are a tad more complex than cornflakes. Critically, they’re perishable which means that they can only be purchased at very specific points in time. Many passengers will arrive at a bus stop at the same time everyday and will expect to board the first bus that shows up. The decision to wait around for another bus or to adjust the timing of a journey increases the non-monetary cost incurred by passengers. At the same time, if a bus turns up immediately after a preceding service it will find very few passengers to pick up. We have shown in our response to the CC’s report that for these reasons, new entry into an existing corridor at evenly spaced intervals between the incumbent’s services is very likely to be loss making, even where the incumbent is earning substantial profits.

This means that there is a very strong incentive on a new entrant to run its services immediately ahead of the incumbent’s timetable. In turn, the incumbent will respond by adjusting the departure of its services and this process will continue until one of the operators decides to withdraw from the market. Typically, the operator with the deepest pockets survives. The all too familiar by-products of this process, observed most clearly in the post-deregulation period, are an irreversible loss of demand due to network instability, short term losses to operators (eventually leading to higher fares) and an increasingly concentrated market where the law of the jungle dictates who survives.

In a sense, the CC is right – profits have never been lower than in the post-deregulation period. But paradoxically (and this is something the CC probably struggles to understand) this has not resulted in a better outcome for passengers. In the five years following deregulation, bus patronage in the metropolitan areas declined by a quarter despite a substantial increase in bus-kms. Without some degree of timetable coordination, unfettered on-street competition will lead to operators losing money and passengers getting a less reliable and more expensive service. Regrettably, the CC report has also raised serious doubts over high-end partnerships, the type of measure with the potential to achieve a more efficient and sustainable outcome in the context of on-street competition. Evidence from Oxford and Merseyside suggests that where competition has developed, Qualifying Agreements can indeed be used to offer a better and cheaper product to passengers, albeit requiring a degree of regulatory oversight from local transport authorities.

So will the CC be successful in delivering more on-street competition? And how will local transport authorities respond?

If the CC’s remedies achieve its stated objective, this could well take us back to the bus wars of the late 80s. Ironically, this would put increasing pressure on LTAs to bring in SQPs or Quality Contracts, the types of remedy that the CC has been so keen to avoid. If, on the other hand, the remedies have little or no impact, then this may act to strengthen the case for Quality Contracts and we may well see new proposals coming forward. Following the publication of the CC’s report, we have already seen announcements from Nexus and WYPTE which seem to show a growing resolve. On the other hand, the CC’s ambivalence over partnerships could lead to a growing sense of frustration amongst LTAs as operators become increasingly reluctant to participate in fear of the competition authorities. The recent findings on tacit coordination in the North East and the Wirral are only likely to compound these fears. The effect could be to force some LTAs to move towards Statutory Partnerships and possibly Quality Contracts.

So it seems possible that the CC’s myopic obsession with on-street competition could end up back firing and eventually pave the way for a more regulated market. I only wish they would have worked this out before repeating the same mistakes of the past. In the meantime, expect turbulent times ahead.

Pedro Abrantes

This article first appeared in Coach and Bus Week