Trends in Transportation: Driving Innovation Through Outsourcing

By Outsourcing Center, Patti Putnicki, Business Writer

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Trends in Transportation: Driving Innovation Through Outsourcing

Can transportation outsourcing be a catalyst for innovation? The answer is a definite “yes.” Today, transportation organizations are partnering with outsourcers to do more than reduce cost.

Transportation outsourcing enables finding creative ways to decrease congestion, improve safety and protect the environment, all while positioning to respond to the needs of a new generation of commuters.

“I do think state and local government agencies are contracting with outsourcing providers at higher levels than we’ve seen before, for economic gains, to access to new skill sets and to stay on top of technological changes,” said Scott Belcher, president and CEO of The Intelligent Transportation Society of America.

Take tolling, for example. Initially, outsourcers were engaged to integrate front-end tolling technology and handle the back-end operations, ranging from violation processing to customer care. This solution evolved into an all-electronic tolling option, eliminating physical tollbooths by enabling toll tag or license plate information to be captured as the vehicles travel by at highway speeds.

“Now, we can give our clients the ability to set up high-occupancy traffic (HOT) lanes with dynamic pricing options. Agencies can raise or lower the price of the toll based on time of day or level of congestion,” explained Parker Williams, Vice president of Transportation Solutions for ACS, A Xerox Company. “Varying prices encourages commuters to take alternate routes, car pool or take public transportation. We’re managing traffic by changing driver behavior.”

According to Williams, higher-quality camera and character recognition technology is only part of the reason these new solutions are possible.

“Not only do we have new types of media available, but we’ve done a lot of work to automate processes within the infrastructure. Instead of someone looking at a license plate on a computer screen to match that plate with an owner, we’ve created software that can automatically extract and read the plates, pull ownership information from a database, and either bill that owner or deduct that toll from the owner’s account,” he said. “It’s a story of efficiency as well as creatively filling a need.”

Smart Cards for Fare Collection

While toll tags eliminate the need for cash collection on the roadways, contactless bank cards, either credit or debit, are bringing the same kind of efficiency to public transportation. Instead of a ticket, riders can use a contactless pay-enabled card or fob for any transit fare where the system is installed. The rider simply taps the card or device, boards the vehicle and goes on his or her way. The fare amount is charged to the credit card or deducted from the debit card.

In addition to speeding throughput and improving fare collections, these cards also give transit agencies something they didn’t have before: actionable customer data.

“Now, transit agencies can track when and how riders use their services, so they can make changes to better meet demand. They can add routes, change stops and get a clearer picture of their clientele,” Williams said. “The agencies gain insight while reducing costs, increase throughput and make it easier for their riders to pay.”

The Brilliance Behind “Smart” Parking

The innovation isn’t limited to roadways only. Smart parking is a huge growth area right now, because it benefits agencies, drivers and the environment alike.

“We spend 30 percent of our time driving around looking for a parking space,” Belcher said. “By guiding drivers to open parking spaces, smart parking increases safety and driver satisfaction while positively impacting the environment.”

Basically, smart parking places metal-detecting sensors in each parking space, which can identify whether a car is present or not.

The sensors transmit “occupied or vacant” data to a central processing center that then transmits this information to cell phone applications, message signs or triggers a green light above the open space to alert drivers.

Drivers can pay parking costs with smart cards or credit cards, or, in the case of airport parking, payment can be tied back to that consumer’s toll account. Again, many agencies are relying on outsourcers to handle this integration.

The Impact of the “Connected” Generation

It would be impossible to talk about trends in transportation without exploring the impact of today’s connectivity tools.

“The whole smartphone-Internet-social media revolution is making its way into transportation and changing it, as it has so many other industries,” Belcher said. “Just look at how many cell phone apps have something to do with getting from one place to another.”

Drivers can get real-time traffic information, driving directions, or share congestion information with other travelers. Vehicle location systems let riders know when their bus or train will arrive. Travelers can go online to find shared rides, compare different forms of transportation, or find out where they can rent a Zipcar® for an hour.

“The emerging generation isn’t as car crazy as ours, evidenced by the fact that they’re waiting longer to get their drivers’ licenses,” Belcher said. “This generation is extremely tech savvy, likes to stay connected through technology, and has less of an expectation of privacy. That means they’re more receptive to sharing rides, and to use social media to not only share the best place to get gasoline, but to report things like potholes or signal light outages. “

The ones who are driving now want cars that have all of the capabilities of their phones.

“Every major auto manufacturer is working on a vehicle that offers the online access and real-time information drivers want, in a way that keeps the drivers safe,” Belcher said. “Ultimately, we’re moving toward the age of the connected vehicle – one that combines wireless technology with transportation systems, giving it the ability communicate with other vehicles on the road as well as the roadside itself. Hundreds of companies are working on smart technologies to support this goal.”

The result would be a car that kept the driver informed of everything from traffic tie-ups to whether he or she was veering from a designated lane.

“Smart technology and the connected vehicle have the potential to reduce the number of non-impaired accidents by up to 81 percent,” Belcher said. “These initiatives are on a par with the seatbelt in the impact they could have on safety and the environment.”

Clearly, the transportation industry is not standing still. It’s on the road to innovation – with transportation outsourcing helping organizations accelerate the change.

Is there something about transportation outsourcing that we missed? Let us know!

Scott Belcher, president and CEO of The Intelligent Transportation Society of America (ITSA)
Parker Williams, vice president of Transportation Solutions for ACS, A Xerox Company

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, BPO, IT Outsourcing, and Cybersecurity Managed Services. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides valuable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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