16 Jun Leading app platform brings mobility as a service to the world’s cities
Martynas Gudonavicius, CEO, Trafi, explains how technology is transforming citizens’ use of multimodal transportation networks
Trafi’s story from its inception to global expansion is a perfect example of the rapid growth that is possible with innovative ideas under an as-a-service business model. Could you describe Trafi and the vision spearheading the company’s growth plans?
Trafi started 14 years ago as a hobby project. When Jurgis Pasukonis, one of our co-founders, graduated from the Massachusetts Institute of Technology in Boston, he came back with an idea for a business that developed public transport and started to write routing algorithms to calculate the best possible ways to go from point A to point B. Within a few years we received a couple of investment rounds from venture capital groups and that’s how we formally started. After a couple more years, we became one of the largest, if not the largest, mobility-as-a-service (MaaS) providers in the world. The key example of this is the world’s most extensive MaaS solution, which is Jelbi in Berlin that is operated by the Transport Authority of Berlin.
Trafi is bringing the world a frictionless and easy way to travel with different modes of transportation. And we are also bringing the easy discovery of transportation services with an easy way of transacting with everything. So, imagine that you are downloading an application, whatever the name would be, which is built on Trafi technology. You register just once; you enter your credit card, PayPal or whatever other payment method only once; and then you can automatically use any type of transportation that is integrated in the application. It could be public transport, a scooter, a bike or car-sharing vehicles. With a couple of clicks, you’re unlocking that vehicle. Off you go. You sit in and you drive and you don’t need 10 different applications anymore from each and every single provider.
Everything is in one place, everything is personalized and everything is very easy to use. Through this, we want people to discover more modes of transportation—because local people don’t necessarily know all the possible ways that they can commute and travel within their own city. Imagine in Berlin, for example, where there are more than 20 modes of transportation. Local people don’t know all of them, so our job is to integrate everything in one place. People will start using a shared mobility system more because it is so extensive and such an easy process to interact with. As a result, people will inevitably start using their own cars less.
Cities will become better places to live in because people will be less reliant on private cars, which means less emissions, less congestion and more access to effective transportation. That is precisely our vision. And that’s how we want to bring MaaS to the world in different shapes and forms, and to be an ambassador of shared mobility.
Berlin is a perfect example how private and public partnership can work very well and can work faster if somebody wants that to work. I’m extremely proud of what we have been doing in Berlin together with the city and municipality. In general, Berlin is a growing city with over half a million new residents in the last 10 years. The stats show that every third person will buy a car, which is unsustainable and you can’t ignore that. The public transport network also needs to be reinvented. The great thing is that Berlin decided to fix the problem and they decided to orchestrate urban mobility to make one great product based on Trafi technology and a great user experience in general. The municipality also invited each transportation provider in the city to integrate with the service, as it wanted everyone who operates in Berlin to be part of the product and be accessible to every citizen in the city—so it really is one single platform for all your mobility needs and all your transportation. The project was launched in record time. It took seven months in total, from the day that we signed the deal to the day that we launched the product.
For government standards that’s unheard of, but we wanted to show that private and public partnerships can be fast, agile and provide a great user experience. Our statistics are now showing us that we have basically bounced back to our pre-COVID levels of use, which is great. The Berlin product is also growing, with new transport providers being integrated every quarter. At the end of the day, the desire we have, together with the Berlin authorities, is that this app will be the default. We have the same vision and that’s the beauty behind this project. Trafi as a business tries to ensure that it has a similar vision to a city’s planning office—every city wants to reduce private car use, every city wants to reduce congestion and emissions, and those things are pretty high on their agenda.
What is your current assessment of the Lithuanian economy and your view of the post COVID-19 paradigm?
In the case of Trafi, we can count ourselves as one of the lucky ones. We were not affected that much because our business model is not linked to usage frequency on transportation services. We license our technology so, from that perspective, we have been lucky enough to keep our revenue.
From the point of view of Lithuania, the government did a good job of being proactive in comparison to others within the eurozone. It announced the quarantine early. Although that affected the economy, it would have been worse if it had waited. Businesses, especially from the technology sector, were also very proactive during the crisis and went fully remote quickly. Trafi, for example, went to working remotely even before the quarantine was announced. We really wanted to be socially responsible with regard to our team, even though cases numbers were not high at that point. We assessed the working situation every other day on an ongoing basis and made adjustments throughout the situation accordingly.
To sum up Lithuania’s response, the country, government, municipalities, citizens and businesses worked hand-in-hand and collectively helped to manage the situation well. Of course the economy is being hit, especially small businesses, the tourism sector, restaurants and hotels. I think in the short and long term though, we are going to be better off compared to some other countries, and we would need less economic stimulation and to borrow less as a country to kick the economy off again.
Lots of good things actually happened during this crisis. One to mention is digitalization, with many municipalities in Lithuania implementing remote working schedules. There were numerous processes that the leadership in government noticed could easily be digitized and it is highly unlikely that they will revert back to the physical world from these time-saving solutions. Data-informed decisions became a norm, as the government was almost forced to make calculated decisions about the next step to take in regard to this situation, for which it relied on data-collection systems.
There has been a rush for digitalization and a growing familiarity with remote and mobile systems during the current pandemic. What are your views on the possible implications of this for global mobility?
Mobility or transportation is such a different beast in every continent, every country, even in different cities. You could be in the same country but in different cities and, in terms of mobility, people will be behaving completely differently. So, there is no single answer to your question. Remote working has accelerated, especially during the quarantine, and some companies are seeing that they can work even more productively remotely in comparison to being in an office. There are very interesting findings already emerging in this space and more will emerge as new data streams in.
From that perspective, I think mobility will be hit in a positive way. Essentially, there will be less commuting in general. People will see that they do not need to go to work every day and perhaps going in to the office one or two days a week will become the new normal. What this means for mobility is less travelling, less commuting, less emissions and less traffic jams, which in turn means a healthier cityscape. Many cities are trying to introduce lots of different initiatives to quell pollution, however the natural initiative seems to be to reduce the amount of times people are forced to travel. This opens up more spaces for bikes and pedestrianization. Cities like Milan and Barcelona are doing this—taking away the real estate from the streets and opening it up for a new type of city experience.
What are the main global mobility challenges today?
I think the main challenge today is dismantling the status quo. Historically, regional administrations determined how transportation was organized. With all the drastic changes that are shocking mobility— kick scooters and car-sharing apps, for example—the challenge lies in the fact that cities are not yet reacting to these new changes. There are faster cities and slower ones but, in general, I don’t think any cities are fast enough yet. Trafi’s job is also to try and share our experience with them on how regulations should be applied and how the operations of a MaaS product should be managed, because it is a completely new domain. You can’t blame the cities for that because they just don’t have experience in this at all.
Two years ago, nobody talked about the electric kick scooter and now they are in almost every capital with many providers. That is the speed of change and innovation that is happening around us. And the big challenge today is that municipalities in general are a little bit slower than the market and the innovation and they need to keep up, in my opinion. It is Trafi’s duty to help them, push some of the new regulations and introduce technologies to allow them to operate more smoothly so that, at the end of the day, the system is better for their citizens, better for the planet and better for all of us.
What geographic territories is Trafi currently operating in?
Germany, Switzerland, Indonesia and Brazil are a few examples of where we are operating. However, it is not just cities that we work with, it is also the largest technology players and companies that use our technology, like Google or Apple. The big businesses benefit from our technology and use it in their everyday products—that technology is touching hundreds of millions of people every day. We are completely global from that perspective. We would like Trafi to be synonymous with quality when you think about MaaS.
According to many, data is the new gold and algorithms are the new processing muscle to make sense of it all. How can we expect to benefit from the tremendous amount of data soon to be collected from MaaS platforms deployed globally by companies like Trafi?
What is good is that there is going to be more mobility coverage at general rates. People will better understand what kind of transportation they have in their city. Also, the data collected will provide cities with information on where they may be missing coverage and what types of transportation are missing, at what time and so on. Data would allow cities not only to orchestrate mobility in an agile, efficient, real-time optimized way, but they would also be able to respond in real time to demand and supply fluctuations. They would be able to serve the communities that are underserved. I also think cities will increase their walkability—that is the beauty of cities and they need to be more walkable as it is the healthiest way of transportation.
Could you discuss the main priorities for the company for the next decade and the industry trends that are shaping your strategy for the future?
Our strategy for the future is to standardize mobility platforms. We don’t want to just have different deployments in different cities, we want to combine all of those efforts to enable mobility roaming between cities. We want people to be able to travel with our platform not only in Berlin but to be able to continue using it to travel on to Munich and then to London and New York, say. Users shouldn’t need to download a new application that is only built for London, for example. This is connected to our desire to create an open standard and open format. Maybe even to open up our technology to the rest of the ecosystem, so that other businesses or initiatives can be created on top of the technology that we have been creating for 14 years.
We are not going to keep our technology to ourselves and have a great competitive advantage over others. Rather, we will open up our platform so that, collectively, there is much more mass MaaS deployment around the world. It will be a significantly better usage of our technology in terms of scalability and one of our priorities is how we can help the whole world to build MaaS deployments faster, better and of greater quality. Then, of course, obvious global trends like electrification, new battery designs, Internet-of-Things devices and 5G—lots of those things will help to bring our vision to reality. In addition, real-time regulation and real-time orchestration of mobility networks are absolutely needed and I think it is going to be great to see that start to happen.