From stagecoaches to bullet trains, public transport has always enabled the masses to travel more often and go farther. By now, however, in many places around the world, the private car has marginalized public transport and reduced buses, trams and trains to heavily subsidized modes of transport for the poor and elderly. Today, two major trends, urbanization and the development of autonomous vehicles, raise the question of what the future of public transport will look like.

Our observations

• In the vast majority of cases, public transport relies on tax-payer support. The so-called Farebox Recovery Ratio varies greatly across cities and regions; from well over 100% (i.e. revenues exceeding costs) in cities like Hong Kong, Osaka, Singapore and London, to as low as 10% in some sprawling cities in the U.S.
• Technological innovation will affect different modes of public transport. 50% of public transport buses in Europe is projected to be electric by 2025. Buses and rail-based modes will likely become autonomous, possibly saving heavily on labor (a major cost component in public transport). Aerial tramways may add a layer of passenger transport infrastructure to dense cities. Long-distance modes, in the future, may include hyperloop-like systems and even next-gen supersonic
• Traditional public transport is based on fixed routes and timetables and excellent for moving large numbers of passengers. More recently, public transport operators have increasingly started offering more flexible forms of transport to serve remote areas (e.g. on-demand buses) and last-mile solutions (e.g. ridesharing or bicycles).
• As we have noted before, the automotive industry is slowly moving away from private passenger cars to various forms of car- and ride-sharing. Many manufacturers have started, or have shares in, car sharing schemes (e.g. Daimler and BMW will even merge their services) and some are considering developing autonomous vehicles specifically for ride-sharing.
• High-speed rail, and possibly hyperloops in the future, can be competitive with short-distance air travel (up to ~1000km). Usage of Chinese high-speed rail is growing rapidly with some routes served by as many as ten trains per hour. In fact, these trains already carry twice as many passengers as domestic flights and are expanding much more rapidly as well (39% vs 13% annual growth in domestic air travel). In Europe, high-speed rail is struggling with profitability (in Spain and France), because too many routes are underused (and have not resulted in hoped-for regional economic development). Long-distance buses (especially in Germany) provide a low-cost alternative and have impacted high-speed rail ridership.
• Mobility-as-a-Service is today’s buzz-word when it comes to (public) passenger transport; smart systems are to provide passengers with the most efficient (regarding time and cost) means of transport from A to B. Such trips may include traditional forms of public transport and/or ride-hailing services (e.g. Uber or Lyft), on-demand (commuter) shuttles or rental bikes.

Connecting the dots

Ongoing urbanization, and especially the rise of megacities in the Far-East, makes it increasingly difficult for people to get around. Problems of congestion and air pollution clearly call for public transport to keep the cities of the future accessible and attractive. At the same time, the development of ever smarter vehicles, along with as-a-service models, suggests that public transport is becoming obsolete as private mobility is further democratized and road capacity is used much more efficiently. The short answer to this question is that private mobility will prevail in lower-density rural areas and sprawling cities, while (traditional) public transport prevails in, and between, dense urban centers.True as this might be, the future could also show many hybrid forms of public and private transport and eventually a full merger of the two. First of all, trips may increasingly be intermodal; travelers, supported by smart apps, would switch between modes of transport (e.g. combining traditional train and self-driving pods for the proverbial last mile). Second, private mobility in the future may not be all that private after all; smart systems will maximize the utilization of (autonomous) vehicles, by combining rides, to lower costs and optimize road utilization. And, likewise, public transport already shows signs of moving towards on-demand models and, to some extent, letting go of fixed routes and timetables. In the end, the future of public transport will, to a great extent, depend on political decision making. On the urban level, cities have to decide how much they are able and willing to invest in, and make room for, public transport infrastructure in order to provide high-capacity and high-frequency services. Such decisions may need to go hand-in-hand with measures to stimulate the abovementioned hybrid forms of public and private transport, while disincentivizing motorists; congestion charges, higher parking fees, reducing road and/or parking capacity or raising local registration taxes. On the regional or national level, public transport may play a bigger role when, following the Chinese example, radical choices are made in favor of high-speed rail connections (e.g. investing in separate tracks) that can compete with cars and planes. Not all cities or nations are willing or, more importantly, able to make the necessary investments for high-capacity modes of public transport. Such is, for instance, the case in the U.S., where cities, states and the federal government face severe budgetary constraints and private modes of transport, which typically require less upfront investments, are more likely to prevail. By contrast, in the European and Asian context there may be more room for public transport, driven by public investments.

Implications

• The big difference in (lack of) profitability of public transport across cities suggests that cities and their operators can still learn a lot from each other. Some cities struggle with outdated infrastructure (e.g. New York City) and may need to invest in significant upgrades, but they may also have to adopt new modes of management and operational planning.
• Mobility-as-a-service models are still in their early days and have not proven very successful yet. Eventually, they may require autonomous vehicles to realize their potential as labor costs weigh heavily on public transport in general and ride-hailing services especially.
• Even though (European) governments traditionally invest in public transport infrastructure (and contract operators to provide the actual transport services), more recently, (local) governments are increasingly looking for private investors to invest in the new infrastructure (through public-private partnerships); e.g. in Britain and the Netherlands.