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Watch Out, Uber. Berlin Is The New Amazon For Transportation (With Lower Fares)

July 1st 2019

By Forbes

Uber is not alone in its bold plan to become a centralized digital marketplacefor various modes of intra-city movement. Berlin's public transit system, the Berliner Verkehrsbetriebe (BVG), will also risk giving business away to competitors in the short term to become the Amazon of transportation in the long term.

BVG's riders can use the transit agency's new smartphone app to book fares on its routes, as well as segments with private operators Nextbike bike shares, MILES car shares and Emmy electric motorized scooters. Users will register just once, with one driver license submission and one form of payment to book trips on all providers. And while payment is unified, the app generates separate invoices for each service provider.

The Android and iOS app is called Jelbi ("yell-bee"), a catchy play on the German slang word for the color yellow, BVG's signature hue.

The all-together-now route builder is in a very early stage of its collectivist experiment; the app just launched as a pilot project on June 11. More service providers are to be added later this summer. BerlKönig, an on-demand vanpool operated conjointly by BVG and Via, Taxi Berlin's traditional taxis and Tier's Bird-esque electric kick scooters will join the platform in coming months.

However, Berliners could adopt the launch version quickly, as nearly half of them already use public transit. BVG finance and data chief Henrik Haenecke said in a phone interview that by his data, there are about 3.7 million residents in Berlin proper and 6 million people in surrounding areas. That is the total population, not only the adult, transit-riding population. Meanwhile, between BVG's transport network and the Deutsche Bahn-owned S-Bahn train, he counts 4 million rides per day. Assuming each rider takes two rides per day on most days, that is roughly other Berlin resident on some form of public transportation every day.

The BVG transport network comprises 10 underground railway lines, 22 tram lines, over 150 bus lines and six ferries.

Previously, Berliners' options were planning on their own with BVG's digital ticketing app FahrInfo Plus or using a comparison shopper such as Free2Move.

 

The mentioned personal preferences will not be in the launch version,  but are slated for a future iteration.

Vilnius, Lithuania-based Trafi, which counts Lyft, Google, Apple and Volkswagen as past clients, developed the app for BVG.

We can't know yet how much business BVG is losing because the app is so new. We also can't see if it's gaining an advantage with commuters by offering one-stop shopping, though early app reviews are mostly positive.

As for the hard money value of the white-labeled app, that also is an unknown. The investment in integrated mobility shopping can't be pegged because there is no deal to price. The two organizations partnered in a kind of showcase, on a mission to show that cities can be as market-sensitive and nimble as the private sector and that Trafi is the platform to get them there.

"They are not getting money from us, but together we do something that cannot be done by ourselves," Haenecke said. "We as a public transit company want to prove that we can do this ...seamless mobility. Trafi wants to prove that they have the technology to help cities do this. So there’s a common interest there.”

The shared research project will extend over the next two years. Should BVG want to continue with Jelbi thereafter, it will then have to pay for Trafi's technology and support. By the agreement, BVG will immediately own the anonymized data derived from Jelbi users.

Those numbers are important to the 91-year-old public transport company. Long-term, apart from establishing a public agency as an effective marketplace, Jelbi's use data will statistically depict how people move across Berlin. "It was one of the key reasons to start this thing," Haenecke said. "We want to understand mobility in our city."