Economical design constraints

The new TS needs to be economically attractive if it is to be realised, preferrably from an early stage of the start-up phase if it has any chance of being realized. It is therefore important to include marketing concepts in the early development phase.

A transport network is a critical mass system, meaning the usefulness for the system user (or consumer) depends on the number of users. Once a critical amount of system users (critical mass) is exceeded, the system becomes so attractive that more and more users want to profit of it and the system can expand until market saturation is reached. The business of critical mass systems is complex since it requires the agreement of many market participants, not only of users but also of manufacturer, component provider, infrastructure provider, service provider etc [3]. Each of these participants will compare the possibilities and challenges of the new TS with existing alternatives (comparative advantages) and most likely each participant will do it independently. This means none of the participants will make sacrifices for a desirable common goal that might become real at some time in the future. Instead, their decision to adopt a new system will be based on the advantages that they perceive. These perceived advantages can be significantly different from rational, objective or technological advantages that often prevail in the system developer's eye.

In this section, we want to highlight only the most important marketing aspect and their design relevant aspects. However, design and project management is often interdependent. This section is organized as follows: First the aims are defined and general strategies are proposed and evaluated. Then all adoption factors are analyzed (Section 1.2.2). Finally we characterize different market participants that potentially profit from a new transportation system, analyze their perceived advantages and extract system design relevant decisions.

Aims and strategies

Marketing literature suggests in general the following procedure: (1) to analyze the market, (2) to define aims based on market demand, (3) to deduct strategies from these aims and finally (4) to develop the system according to those strategies. However, the question is:

how can the user (market) want something that does not exist ?

The users desires will usually remain within the limits of what he thinks is realizable. The user is not always informed about alternatives. Therefore, the general characteristics in Section 1.1 of the new TS have been defined by people who know the technological alternatives. Thus, the the aim is:

the development and implementation of a transportation system with the characteristics described in Section 1.1.

There are two principally different strategies on how to achieve this aim where both strategies have a strong influence on the system design:

1. morphogenetical strategy: The new TS is achieved by a gradual transformation of the present transportation system
2. substitutional strategy: The new TS is built up in parallel to the present system and replaces it gradually as it expands

The morphogenetical strategy

Elements of the morphogenetical strategy are:

• improvement of navigation and automation of cars and trucks
• reduction of energy consumption and gas emission of cars, trucks, trains, ships and airplanes
• automation of heavy and light rail trains, in general Automated People Mover (APM) technology.
• development of high speed trains
• improvement of multi modal transport. This includes:
  • cars that can be loaded onto high speed trains
  • cars that can run on roads and rails (dual-mode vehicles)
  • information systems that allow the organization of a complete trip using multiple means of transport

The main advantages of the morphogenetical strategy is the ability to evolve smoothly from present systems:

• present infrastructure can be used
• industry can continue improving the products that they already manufacture
• the users do not need to change radically their behavior
• judicial framework, public and political decision making procedures are well established

The main disadvantages are:

• the compulsory downwards compatibility to present technologies limits the problem solving potential. It is likely that the TS as outlined in Section 1.1 can never be achieved and a substitutional strategy is inevitable at a later time
• the user perceives predominantly the additional costs (for automation, navigation, infrastructure) but too few immediate profits. For this reason changes can be delayed

The substitutional strategy

the substitutional strategy is characterized by:

• new vehicle technology that requires a new type of infrastructure. One example is Personal Rapid Transit (PRT) systems [4,5]
• its introduction has more the character of a revolution rather than that of an evolution

The main advantages are:

• system design can fully exploit state of the are technology and the characteristics outlined in Section 1.1 can actually be achieved. As a consequence, people who use it would immediately perceive the differences
• the new TS can be designed with more homogeneous operating principles compared with a combination of improved conventional TSs. This would result in an easier operation, higher efficiency, higher safety and reliability

The main disadvantage of the substitutional strategy is that present TSs, technology and infrastructure cannot by used to the degree as it is the case for the morphogenetical strategy. The new infrastructure must be installed in addition to the existing one and they may interfere with each other. In the further design process we will follow the substitutional strategy because:

• the priority is to achieve exactly the TS as outlined in Section 1.1 and not a sub-optimum approximation

• the transition problems are solvable by an appropriate system design and project management. The following options should be considered:
  • use of elevated guideways for the main traffic streams in order to minimize the interference with present infrastructure

  • use of present infrastructure (bus-lanes, metros-lines, trams, bridges, tunnels, public car parks, etc)
  • reduction of in-town public car-parks

General adoption process of the new TS

Here we discuss in general all relevant factors that persuade a market participant to adopt the new TS. Ideally, each adopter passes successively through the following stages:

1. awareness stage
2. interest stage
3. evaluation stage
4. trial stage
5. adoption stage

It is important for the project management, to provide each adopter at each stage with the right information. In order to measure the degree of adoption the following quantities may be considered:

• vehicle km per year. This measures the usage of the TS i.e. how many passengerkm or freight km have been transported with this system
• number of households or businesses with access to the new TS

Vehicle km per year is more appropriate since it reflects not only a measure of the number of people who use the TS but quantify also the intensity with which the system is used. An upper limit (market saturation) would be all passenger + freight kms per year that are performed by today's TSs. The following factors need to be considered in order to accelerate the adoption process:

performance specific factors

• Relative perceived advantages: each market participant will individually perceive certain advantages of the new TS, relative to present alternatives. It is important to communicate real existing advantages to each of the market participants.
• Compatibility to existing infrastructure: How easy can the new TS be integrated into the existing transport infrastructure? Important issues are:
  • technical compatibility
  • changes in organizations (companies, politics, private)
  • changes in personal behavior and habits
  • changes in legislation, insurance and safety standards

• complexity: should the new TS be a lot more complex than present systems then participants will hesitate to adopt the system because:
  • the user is confused, because it is too difficult to use it
  • it becomes too expensive to develop, just because of the number of different devices that need to be designed
  • it becomes risky and expensive to manufacture and operate because new methods need to be developed
  • expensive specialists are required to develop and operate the system reliably and safe

• upgradability: especially when investments are high, developers, manufacturers and operators are more likely to adopt an upgradable system because it will guarantee support and operation in the far future
• triability if the TS (or parts of it) can be tried before manufacturing, operating or usage then the adoption risks can be lowered and doubts removed

• observability is the capability to communicate the real advantages of the new TS to the market participants. Communication channels that exist for present TS (TV and radio, journals, consultants, lobbyists, conferences) may be inexistent for the new TS

Since we have decided for the substitutional strategy (see Section 1.2.1), the weak points of the new TS are compatibility, complexity, triability and most likely also observability. The system design must pay particular attention to the factors relative perceived advantages, compatibility, upgradability, complexity and triability. The project management needs to work mainly on triability and observability.

adopter specific properties

• Properties of individuals (users, decision makers in companies or organizations, etc) such as age, income, education, status, etc.
• Properties of companies and organizations as a whole such as size, company culture, type of employees, etc.

external factors

• Political, judicial environment: these are market regulations and restrictions, safety regulations, patent law, political decision making etc.
• Social factors: awareness of environmental problems, acceptance of technical innovation, social status, user and interest groups, quality of education.
• Economic situation: state of economy, marketing structures, culture of companies, financing, etc
• Technical environment: standardization, technological state of the art.

The external factors concern predominantly the project management. In the remaining part of this section we want to focus on the analysis of the relative perceived advantages along with adopter specific properties in order to extract more detailed system design criteria. For this purpose, the adopters have been divided into the (interest) groups:

• users
• operators
• manufacturers and developers

User specific properties and relative advantages

Here we characterize different user types and high-light reasons why they would use a TS (or why not). It is obviously a characterization of stereotypes.

Type 1: The irrational car buyer

This is the type of man who buys his car predominantly for one or several irrational reasons:

1a

the traditional irrational car buyer:
``I always bought the car of brand X and I have always been satisfied''

1b

the status symbol irrational car buyer:
`` How will they look at me if I do not by the car of brand X or Y''

1c

the emotional irrational car buyer:
``This car looks really cool, I have to get it''

1d

the socializing irrational car buyer:
``My friend X, is really a cool guy and he also has this car''

1e

the spontaneous irrational car buyer:
`` I urgently need to buy a new car so... just give me this one!''

The typical irrational car buyer drives to work by car. He parks it in a garage or in front of his house or apartment. His residence is usually in more scarcely populated suburban areas. He has experience with traffic congestion but either he accept it as the most normal thing of life or, if the traffic situation becomes serious, he has no problems in taking a 20km longer route in order to avoid stop and go traffic. The car is an integral part of their private live that must always be near. The car has more a status of a pet or a religious symbol rather that of an object. Driving the car and the sound of its motor is enjoyable and gives a subjective feeling of being in power of something, to be free and independent.

This user type is probably the most difficult to convince of a new transportation system. He will perceive any transport that want to compete with his car as a threat. He is not interested in analyzing traffic problems objectively. His suggestion for improving the traffic situation is to extend the road network.

The traditional and status symbol irrational car buyer are the most pathological cases, it is the user type that resists most adopting a new TS.

The socializing irrational car buyer will also hesitate to accept a new transportation system, but as soon as others accept it, he will follow. He can be considered as an amplifying factor after the system reached the critical mass.

The emotional and spontaneous irrational car buyer may be easier to convince of a better transportation system, if communicated in the right way. The emotional irrational car buyer is also the prime target group of the car industry's publicity campaigns.

It is estimated that user type 1 represents a large share of all users. It is therefore important to recognize their fears, otherwise they will block the expansion of the system before it reaches its critical mass.

The design relevant aspects are:

• characteristics of the new TS should be similar to the one of a car. The new vehicles should not appear as something completely different, but something confident with more intelligence inside Maybe the name ``INTELLICAR'' would be the most appropriate. In particular the following elements are important:
  • access: spontaneous, any time, the way to open it should also be car-alike
  • operation: user should remain in power of changing directions at any time
  • ownership: users should have the possibility to buy their own vehicle

• putting a high importance to the design aspects of user types 3 and 4. The irrational car buyer could be addressed indirectly by those groups

Type 2: The rational car buyer

This is the type of user who buys his car predominantly for one or several rational reasons:

2a

the minimalist rational car buyer: He will search and buy the cheapest available car that will bring him from place A to place B

2b

the optimalist rational car buyer: He will read all available auto journals and car test-reports in order to find the car for his personal needs

2c

the universalist rational car buyer: Is similar to the optimalist rational car buyer, but reads also journals of general interest. Therefore, his decision which car to buy is also influenced by factors that are not car specific, as for example environmental, political, economical etc

For this user type the car is no more than an object that has to provide certain functions. He uses his car when he needs it and if he gets stuck in a traffic jam or the car breaks down he hates it. The rational car buyer is not only a more critical person, he is also willed to make efforts in order to get the appropriate information. When confronted with a new TS, this user type is likely to adopt it if the advantages fulfill their expectation. He will analyze home-to-work trip time and costs. First he will compute the costs with the assumption that he keeps his car.

• If the costs for using the new TS are higher than using the car, he will verify if he could do all his transportation needs without a car.
  • If he cannot do everything without a car he will not use the new TS but continue to drive the car.
  • If he could do everything without a car and if the costs are still higher than the car-only option then he will not use the new TS but continue to drive the car.
  • If he can do everything without a car and if the costs are lower than the car-only option then he will sell his car and use the new TS exclusively.
• If the costs for using the new TS are lower than using the car, he will use the new TS while keeping the car. If he has a second car and realizes that he is no longer using it he will sell it. Eventually he would also sell his first car when owning it is no longer justified.

Since the network of any new TS is incomplete (car is still necessary), the only way to attract this user type is to offer transport that costs no more than the operating costs of their car (essentially petrol, tax, insurance). The universalist rational car buyer will maybe recognize that the new TS can increase his own and other people's quality of life and will therefore be ready to pay a slightly higher price than the operating costs of his car. The universalist rational buyer will also appreciate being able to work during the trip. Universalist rational buyers often have a higher social status and are considered as opinion multipliers because others are imitating their behavior in order to achieve a higher status or to appear as if they had achieved a higher status.

Universalist rational buyers are therefore of importance during the start-up phase, before the critical mass is reached. Rational car buyers are less numerous than irrational car buyers, but they will immediately use the newly implemented system if it is advantageous for them (see above discussion). The design relevant aspects are:

• the costs of the new TS must be equal or below the operating costs of a car
• equivalent or shorter door-to-door trip times than car or public transport
• additional functionality or services will increase the usage within this type of users:
  • working during traveling, Internet connection
  • possibility to sleep conveniently for long distance or over-night journey
  • possibility to take care of children during the trip

• when user type 2 is a parent they can be influenced by user type 4, (see design aspects user type 4)

The first two items concern also project management and network design.

Type 3: The person in the household without car

To date, many family households still own a single car. In most of these cases, the person with car (usually male of user type 1 or 2) drives to work and the other adult person (usually female partner) remains without a car during the day. The person without a car is then largely dependent on public transport, which she needs for the following purposes:

• for the trip to work
• for shopping, eventually with children or baby
• for visiting friends and other events

The person without car is a very important pre-critical mass opinion multiplier as she has an influence on user type 1 and 2. She will prefer the new TS to public transport if it offers a better service at a similar price. Therefore, the design aspects are:

• easy to operate:
  • a prepayed card serves as ticket and as a key to open a vehicle
  • simple destination selection
• personal and secure: no other (undesired) people travel in the same vehicle. No direct contact to other people in crowded places.
• easy to load: baby carriages or shopping charts can be rolled into the vehicle
• convenience: quiet, comfortable and smooth travel, possibility of taking care of children during the trip
• influence by user minors, (see design aspects user type 4)

Type 4: minors

Minors, up to the age when they are allowed to get a driver's license, are dependent on bicycles, parents and public transport. The main transport tasks are trips to school, friends and various events. Boys in general could become enthusiastic about futuristic and high speed looking vehicles that move silently along some fancy guideways. Most girls may be more attracted by a clean inner vehicle, round and refined shapes of furniture with warm and soft colors. Girls are often afraid of traveling with strangers and hate crowded places, where direct contact with unknowns is inevitable. For further analyzis we consider two sub groups of minors:

4a

minors less than 12 years old: Parents will usually decide about the mean of transportation is used by their younger children. Therefore, in order to attract minors of age below 12 the parents need to be convinced that the new TS has advantages over other alternatives. The important factors are:

• children can do certain trips alone (school)
• children are safe and secure when they are traveling alone
• the new TS is not a danger for children on the streets
• the kids should love to travel with the new TS as it transmits also some joy to their parents

4b

minors of age between 13 and 18: This group will play a central role during the pre-critical mass period, but also in the long term success of the new TS. The reason is:

• there is an increasing demand for transportation:
  • social activities increase (visits of discos, events, bars, friends, etc)

  • secondary school, college or university are usually more remote from the parent's home than primary school or kinder garden. As a consequence also friends and other activities are located more widespread
  At present this demand is insufficiently satisfied by public transport, in particular in rural areas, during night hours and weekends. Also many parents are reluctant to drive their children to wherever and whenever they want. Therefore, there is a potential that can be satisfied by the new TS.

• during the age from 13 to 18 opinions are forming and stabilizing. If this group of users adopt the new TS it would represent the first generation that no longer considers the private car as the transport of choice
• Young people wil have a strong influence on user type 1, 2, 3 and 7

The design relevant aspects are:

• parents should have the possibility to send children alone to school, entertainments (where the older ones may drink alcohol) or visiting friends and relations
• the new TS should not endanger children playing in the street
• vehicles should be protected against persons who intend to break in violently
• the control system of the TS as a whole should be securely protected against malicious diversion of vehicles (ie by hackers)

• the outside appearance of the vehicle, guideway, panels bottoms and displays should look elegant and well designed. Maybe the vehicle sounds (rolling, gliding, door-opening) should be similar to those in SCIFI movies
• the inner architecture should be warm and welcoming, the furniture should be of round and refined shapes with soft colors

• all buttons and displays should be placed in a way that small children can operate the vehicle and read all relevant messages
• already in an early stage, the TS network should include centers like discos, cinemas, bars, etc

Type 5: The elderly

Elderly people are a substantial and ever increasing part of western society as live time expectancy increases. In addition, many elderly people live alone because their children and relatives live further away than in the past. They need to manage their lives and transportation without demanding support from the younger generation. Many of them will be physically weak, visually or acoustically impaired, or have lost the ability to drive a car. Transport is usually needed for:

• shopping
• visiting relatives, friends or other events

Even the novel TS would be of great benefit to elderly people they may be slow to adopt it because of difficulties in changing habits and fear of new technology. Therefore, the design relevant aspects should be:

• traveling should not be physically demanding
• it should be simple to operate and similar to existing transport
• the way it is used should be consistant, for example in the position of button, displays, language of instructions and messages etc. Elderly people need to be confident that they can control their travels wherever they go
• travel in wheel chair should be unrestricted
• operation should be possible also for blind and deaf

Type 6: impaired persons

Persons who are physically, visually or acoustically impaired can be expected to eager to adopt the new TS, as outlined in Section 1.1, if they are able to use and operate it without difficulties. The design aspects overlap largely with those of user type 5. In addition, certain facilities for the disabled are standardized.

Type 7: other public transport users

These are people who use exclusively public transport and who do not belong to user types 3, 4, 5 and 6. They may use public transport for one of the following reasons:

7a

they cannot afford to buy and maintain a car (even though they would like to)

7b

they don't like driving a car or have not obtained a drivering license

7c

they hate cars and driving. They may be environmentally sensitive and believe that public transport is positive for the environment and society. Others are nostalgic about trains

Types 7a and 7b would instantly adopt the new TS if they get a better service at similar or lower costs compared with present public transport. Type 7c would adopt a new TS once they are convinced that it is socially acceptable and environmentally friendly.

Type 8: professional users

These are usually companies or organizations that use transportation for

• Freight transport: within buildings or between remote production sites.

• Personal transport: to move people between buildings, inside or between remote production sites.

The professional users are of particular interest for a first commercial application of the new TS because:

• they will verify objectively if the new TS has a better performance and adopt it if the costs justify the additional value
• companies and organizations will become opinion multipliers when their employees who are type 1, 2, 3 and 7 users experience the new TS at work
• freight transport is particularly suited for testing the safety of the new TS

The design relevant aspects are:

• efficient freight transport, including:
  • easy handling of the transported freight
  • efficient logistics, with the option of integrating the new TS into the companies material handling systems
  • option for automated loading and unloading of vehicles
• integration of in-door and out-door transport. This would reduce costs for handling and intermediate storage. Ideally the transportation should be all the way from good-in, to production machines, and on to wharehouse and the customer

• integration of passenger and freight transport. This would save costs compared with the operation of two separate systems
• option for customized vehicles for special purposes, such as:
  • transport of hot and cold goods
  • vehicles with special furniture, equipment or tools

Diffusion strategies

The schematic qualitative diffusion diagram in Fig. 1.1 shows which user type is adopting the new TS and at what time. It shows the strength of the influence (thickness of arrows) between the different user groups. These influences can be reinforced by appropriate marketing strategies and communication. There are different dynamics for the pre- and post-critical mass period: the post-critical mass period is characterized by general self-amplification of the diffusion within and between all user types. Concerning the system design, it is important to focus in the start-up on the design aspects for user types 8, 3, and 4. In addition, the system should be flexible enough to accommodate the design criteria of all other users at a later stage.

Figure 1.1: Schematic diffusion diagram and influences between user types

Operator specific properties and relative advantages

By operators we mean all companies, institutions, organizations or individuals who buy or rent parts of the TS and offer various transport services to users or other operators. Common objectives of operators are

• low fixed costs (investments)
• low operating and maintenance (O&M) costs
• high revenue from the services they provide

Fixed costs, operating costs and revenue vary strongly, depending on the type of operator. In the following we analyze different types of operators, whereby one single company, institution or organization could provide some combination of services.

network providers

own or rent the transport infrastructure and make it available to the vehicles of the transport providers.

• Fixed costs: infrastructure.
• O&M costs:
  • energy
  • labor for control center infrastructure maintenance and security.
  • repairs and maintenance
• revenues: charging transport providers for infrastructure use

The fixed costs of infrastructure providers represent the main capital of the TS. In addition the initial network needs to be of a certain minimum size, to be useful. Design aspects are:

• low infrastructure costs: low guideway costs per km, use of existing infrastructure
• high reliability
• compatibility with other modes of transport
• reliable technical support
• upgradability by future technologies

Before investing major capital in a technological new TS the network provider must be sure that:

• the planned network will provide the expected performance
• the system usage is sufficiently high

transport provider

; usually own a vehicle fleet.They use the infrastructure and offer transportation services to the service providers.

• Fixed costs: vehicle fleet.
• O&M costs: network providers, labor costs and material for vehicle maintenance
• revenues: charging service providers for vehicle use

Design aspects are:

• high reliability of vehicles
• low maintenance costs

The vehicle fleet can be increased as demand increases (scalability). Therefore, during the start-up phase the vehicle costs are less important than the infrastructure costs.

service provider

are important as they adapt the TS services to the user's needs.

• Fixed costs: offices, computers, etc.
• O&M costs: transport providers, administration costs.
• Revenues: charging users for the transport services.

Design aspects are:

• system architecture needs to be open to service providers
• to ensure high usage of the system see design aspects of users (Section 1.2.3)

System manufacturer's specific properties and relative advantages

System (and component) manufacturers are at least in part also system developers. A new TS as outlined in Section 1.1 is an innovation leap. Manufacturers will need to develop new systems or production technologies. They will only enter the market if the risk is sufficiently low or the expected profits are sufficiently high with respect to their present activities. Therefore, the adoption need to be facilitated by lowering the risk and development costs. The design aspect are:

• modular structure of architecture such that the development risk and costs of the entire system can be distributed amoung many manufacturers. This requires precise specifications in order to assure that the components will work together across the whole system

• off-shelf components reduce the development costs and lower risks as they are already in mass production and extensively tested

• software-tools allow cost-effective design and performance testing before making major investments into hardware