#189 Visiting ViX Technology: New roots of opportunity in transport technology

OFFICE PACE: Finding somewhere bright, collaborative, flat and focused can be hard. ViX Technology’s office design offers an interest place to reflect, explore and engage with the day-to-day work of building transportation systems. Essentially, the space seems to encourage collaboration, but it also gives room for solo sessions. In this piece, I bring a bit of a complex bundle of themes: a new framework (for comment), an overivew of ViX Technology’s offering, and what it means in practice.

Customer journeys are quite simple for commuters to imagine: have cash, find the service, pay, make the trip, use another mode and get to where-ever. However, for the organisations trying to develop solutions that aim to enhance the journey there are three layers which need to be deeply aligned with two customers: a client, and an end-user. The underlying service, systems and infrastructure inform a significant part of how end-users experience their journeys; and how clients identify, prioritise and design their needs. Transport users and businesses which offer solutions to the SSIe framework are changing at a pace slower than one might expect but faster than anyone can sense. 

SSIe Framework: The SSIe framework is one module of transport service design. Service offering is determined through understanding end-user needs. Systems are used to analyse and manage end-user needs and service performance. Infrastructure is the hardware, software, and knowledge needs which serve as a conduit between the service offering and the service design— this is what people experience, sense, feel and touch. Hence experience is essential for most transport entities— long, or short, anything that improves the quality-value dynamic (module 2) significantly improves the attractiveness and sustainability of a transport business. At least ideally.

ViX focuses on fare collection, which means they make it easier for transport companies to collect the money customers pay for the transport service they demanded. Why would this be important? Don’t all passengers pay their fares? 

This is due to what we in logistics management call the shrinking service window. As B2C, B2B and C2B services demands increase, faster than either partner can respond a service window starts to close because the demand to keep the “smoke” out gets higher— clients demand better quality air. Once they’ve tasted a slight improvement, and the benefits derived from better breathing becomes more obvious, then inherent, if not a norm, clients will indefinitely demand even better air quality. 

Technology companies have a similar effect on their clients, because they improve the economics of information. Like breathing, companies depend on information. Better quality knowledge about their business, customers and performance are handy assets which enable informed decisions for current and future opportunities and challenges. In the transport industry, most of our attention has been on new technology companies— the “disruptors”, the “early adopters”, the “young-startup”. However, most lessons about longevity may be found in the indispensable and durable companies who have been part of the tides, contributing to them and eventually leading them. 

We’re about to go in to dive into ViX Technologies, a company which is truly focused on the customer journey in a way that makes it essential, unusual and normal at the same time. ViX focuses on fare collection, which means they make it easier for transport companies to collect the money customers pay for the transport service they demanded. Why would this be important? Don’t all passengers pay their fares? 

Well, most people using public transport probably pay their fares because in minibus taxis there is no other option— everyone in your row paid: you must. There’s no escaping it. In mass-transit services which use a cash based system money leaks from the paying customer to the driver in a much more severe manner. Some drivers may collude with customers, or among each other to rake in some extra-income: at scale this affects business performance and distorts the internal workings of an organisation. 

While minibus taxi operators may have daily quotas for the owners, the excess generated is take-home cash; bus drivers have no quotas and operate on a fixed monthly salary. Train drivers are much worse because they seldom interact with the ticket. In minibuses along coastal areas one finds door-men collecting the fares on behalf of the operator (and in some secure lines for the owner) in order to ensure accurate revenues including those beyond the weekly quota. Owners of transport services need to be certain that the revenue the generated reflects the passenger journeys along specific routes. ViX Technology offer a solution which enables fare collection, but actually the entire fare collection value chain. 

The fare collection value-chain

The fare collection value-chain in subsidised public passenger transport is an important part of effective, efficient and sustainable transport services, accurate subsidisation mechanisms and value for commuters. It is important that the interconnections between customers paying, authorities allocating funds, and appropriate operations are solidified in order to provide meaningful mobility and access. ViX has a multi-tier approach to grappling with fare collection, which is quite interesting. 

The first tier is related to (1) fare collection; (2) driver behaviour; and (3) service monitoring. Fare collection involves passenger counts as they board and alight through a virtual gate. Visual and infrared cameras are used to observe the boarding and alighting activities in order to monitor passenger payment behaviour. It is also important to observe the type of payment which commuters used: cash or tapped card. Driver behaviour is associated with operational performance. The use of telematics, which is outsourced, enables an analysis of how the driver utilises the bus vehicle along the routes— and may be used to enforce and fine inappropriate behaviour. Similarly, the front and rear facing cameras also help with monitoring manoeuvring behaviour and may assist in insurance claims for the bus company and other roadway users. Lastly, the ability to adhere to the predetermined schedule is essential for ensuring that the service guarantee for end-users. Service monitoring involves observing routes, stops, location, contract compliance, and an integrated performance management tool. This is bundled up in one place where fare collection and driver behaviour data are included in one platform to the specification and needs of the client. 

Information is valuable

What one expects from a technology company is a group of young people, running around using coding language, complex concepts and disruptive themes. Instead at ViX, one finds a mix of talent and a simple story which is more focused than expected. Specifically in an area that can be so diverse: fare collection. The value of the information the systems, service and infrastructure they work with is immeasurable. 

Subsidy allocations for buses depend on accurate data about the trips offered to targeted customers, compliance with the service level agreements and more importantly the digitisation of the entire service monitoring process. For urban and rural commutes— digital systems which monitor contractual compliance from transport operators are an essential part of the secure revenue generation and service offering for transport authorities. Service delivery depends on sufficient revenue, and effective allocation of fleet to the right routes. In addition, given the increasing power of technology in the transportation space, enabling a consistent planning environment through a legislative data standard will enable better integrated transport planning and implementation. For now, the information is valuable because bus companies with these technologies in place generate more income on paper than ever before, largely because there are fewer leakages. Which in many ways suggests that the South Africa bus transport economy may well be generating more revenue than we can see— whether for the transport authority or the business. More on this later. 

Thank you for reading this piece. Much of the notes here are from a discussion with René Brummage and Shaun Patterson of ViX Technology in December 2019 in Johannesburg, South Africa. I appreciate the fact that they allowed me to hang with them for nearly 3 hours, getting into what they’re doing, very generous. Anyway, this is a first of two (or three) notes. One on economic regulation and, or another about legislative opportunities come next. The SSIe framework is experimental, and in this case it is applied for ViX Technologies. It is one module of a broad series of interventions, more about it in future– it is a work in progress.

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