Changing customer expectations in a digital world
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Alternative fuel vehicles (AFVs)
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Competition and market dynamics
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Potential impact
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Potential impact
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Potential impact
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- Increasing expectations of customers to be able to buy tickets and manage their travel plans through a variety of digital platforms
- Failure to develop applications and digital channels that meet these increasing expectations could affect profitability, customer satisfaction and the business’ ability to capitalise on valuable customer data to enable commercial initiatives
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- Increasing popular, political and customer demand for alternative fuel (electric, hydrogen etc.) vehicles
- Transition involves potentially material changes in financing, maintaining and operating the assets, creating execution risk
- Requires significant change to infrastructure
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- Competition arises from direct price competition; inter-modal (e.g. coach vs. rail); and emerging threats such as new market entrants or disruptive technologies
- Changes in customer demographics impact demand and the nature of services required
- Potential ‘disintermediation’ risk created by aggregators seeking to ‘own’ the customer relationship
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Management/mitigation
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Management/mitigation
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Management/mitigation
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- Comprehensive digital strategies developed in each division
- Divisional ‘digital scorecards’ are reviewed monthly by the Group Executive Committee to monitor the effectiveness of various digital channels
- Developing strategies for demand responsive services
- Oversight by Chief Digital Officer
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- Environmental leadership with pledge to never again buy a diesel bus in the UK and launch electric vehicle procurement competition in UK coach. Ambition to reach zero emissions in UK bus by 2030 and UK coach by 2035
- Cross-division executive leadership of AFV strategy
- Close engagement with new and existing original equipment manufacturers
- Pilot testing in a number of areas
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- Commitment to service excellence, providing the best solutions to our customers
- Price leadership and value for money
- Revenue trends are closely monitored and RMS deployed
- Investment in technology
- Focus on operational excellence
- even with an aggregator model, service delivery is critical
- Targeted acquisitions and growth in the most attractive markets
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Opportunity
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Opportunity
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Opportunity
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- Leadership in adopting new technologies will enhance our service to existing customers and attract new ones
- Millennials are an increasingly important target market and more inclined to use public transportation if the service is right
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- AFVs present potential opportunities to reduce the cost base of the business, while helping cities solve the challenges of the drive for a cleaner air environment
- Total Cost of Ownership equivalence versus net present value (NPV) by around 2024
- Commitments in other divisions
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- Ageing population in major markets creates additional paratransit opportunities
- Continuing urbanisation drives cities to partner with high quality transportation operators
- Weaker transport operators become targets for acquisition
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Change in risk in the year
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Change in risk in the year
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Change in risk in the year
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- Innovation programmes implemented in North America, UK and Spain are improving the customer digital experience
- Continued increases in bookings through online and digital mobile platforms
- Continued roll-out of ticketless operations
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- Electric vehicles entered service in Coventry, Birmingham and Bilbao
- EV pilot project underway in New York
- First autonomous electric bus service in Madrid university campus
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- Operators without strong financial position and backing are more unlikely to survive in the current climate, reducing competition
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