Peter Menky (Dodo): We try to get as close to 100% utilization of cars and couriers as possible. The challenge is to predict future demand at a specific location and dynamic routing
09. 03. 2023
Reading time: 10 minutes
A new way of public transport in suburban regions, where today buses run only twice a day, is being implemented by start-up CITYA. "Through a combination of technology and better planning, closed region, virtual stops, and our algorithm that uses artificial intelligence principles, we can put as many people as possible on one route with minimal resources. And by doing so, we are significantly cheaper in the urban periphery than public transport," says Dominik Janík, CEO of start-up CITYA, in the Adastra podcast.
Ivana Karhanová: A passenger orders transport from A to B via a mobile phone app. Within 15 minutes at the latest, he or she boards the minibus. The minibus will take the customer to his destination. This is a new way of public transport in places where today a bus runs once an hour, sometimes even just twice a day, for example in satellites around Praha or Brno. The CEO of the start-up CITYA, Dominik Janík, who is behind the whole solution, is a guest in the studio. Hello.
Dominik Janík: Hello.
Ivana Karhanová: You say that CITYA is the biggest innovation in public transport in 100 years. And according to you, you have discovered a hole in the market. Small municipalities with poor transport services, but far enough away from big cities to run services like Uber, Bolt or Liftago, basically lack efficient public transport.
Dominik Janík: That's right. And it's not just services like Uber, Bolt, Liftago or other deadheading services, but it's also the principle that public transport in such excluded locations is not and cannot be as effective. A mother with a pram, a senior citizen, a family in the suburbs or in suburban conurbations and small towns always depends on some kind of car, either their own or rented, and consequently on very, very low-frequency public transport.
This is what we are addressing where public transport is not and cannot be effective, would be very expensive and would not work for everyone anyway and would not be comfortable enough. That is where we are putting our smart minibuses or vans, whatever we want to call them, in a limited region.
Ivana Karhanová: You say you are looking for transit deserts. What is it?
Dominik Janík: Transit deserts is our term, which I would translate as service deserts. Basically, based on data and local experience, we look at where the service is the worst, where the bus frequency is low, where it's far from a bus stop, what type of buses go there and who lives there, what they do there, how many cars they have there.
And we aggregate all this data from different services like TomTom, Facebook, Google, but also socio-demographic data. And we're trying to find where the worst service is and also the highest trade-off of that person jumping to some sort of shared or mass transit ideally.
Ivana Karhanová: And according to your words, this shared transport, specifically yours, is roughly 5 to 6 times cheaper per kilometre than public transport, for example in the Praha area. What is the magic of it being cheaper?
Dominik Janík: And if you think of regular public transport, it's a fixed line that the bus has to follow. It goes to some stops, it stops there, it spends some time there. In some cases, those stops are on a signal. But that doesn't mean that anything is cut or saved.
The bus still has to follow that line. And if more than one of those stops goes empty, then he has to wait at the next one because he's leaving on schedule. That's the way line service works today. There have been some experiments with demand for service, but they still behave very similarly, so they have no effective way to save money. We save the most by being able to serve the same region, or the same amount of people, much more comfortably but with significantly fewer resources.
It's not just the mileage, it's not just the fuel that we save, it's by using significantly fewer vehicles, cheaper drivers who have a Group B licence, because those vehicles are up to nine people. Through a combination of technology and better technology planning, closed region, virtual stops, and our algorithm that uses artificial intelligence principles, we're able to put as many people as possible on one route with really minimal resources.
And by doing so, we are significantly cheaper in the urban periphery than public transport. We keep talking about it has to be some excluded region. We're certainly not as efficient as mass transit in, say, the spine, which is typically trams, subways, public transit - certainly not there.
Ivana Karhanová: You mentioned that in order to be effective, you need to collect a lot of data. What do those data models tell you at this point about the real needs and the way people live and transport themselves in these locations?
Dominik Janík: We always start with what is the public transport throughput there and where does the bus run, how often, who does it carry, how many people is it capable of carrying and how does it behave.
Ivana Karhanová: How do you find out who they're carrying?
Dominik Janík: First of all, we have data provided by some carriers. Typically, for example in Praha and the Central Bohemian Region, the data is relatively good. Then there are various alternatives, such as census on buses, various census frames on some buses. We are trying to get this data.
Then there's a bunch of data that is very specific, like TomTom, Facebook, Google, that tells us roughly how people are behaving, and we create some matrices of those people's behavior from that. That way we get some first insight into what's going on in that region, who's travelling there, what needs mass transit is fulfilling for them.
Ivana Karhanová: And when you intertwine that need with a real offer, what do you get to?
Dominik Janík: We always look first of all at how people behave today, how many cars they use, for example. We get that from the speed cameras. For example, in Říčany there is a very good, very dense traffic network. Everybody in the radar probably knows that. And from those we get how many cars are going there.
We get data on how many people live there from socio-demographic surveys, census, Facebook and so on. So we're able to find out how many people live there, how many cars drive there, and roughly model what the occupancy of that vehicle actually is. And if we add in those deserts of service and where those people live, if they're satellites, if they have garages, we're able to tell where the trade-off occurs and how many people we're able to switch from individual transportation to our, let's say, more comfortable mass transit.
And that's why it's terribly important for us because then we look at what's happening today, how many people are traveling by mass transit, by car, and what would happen if we started our service there. How many people would be willing to jump into our vehicle, into our solution?
Ivana Karhanová: Are you able to model future demand?
Dominik Janík: Exactly. First of all, we simulate all our experiments, so typically when we go to a city, when we open a region, we first build a digital twin, which is basically a virtual city. Then we feed in, for example, that DTFS mass transit data and we stack those individual layers and try to simulate what's happening today. Then we take our allocator, our algorithm, and we run our service on it.
That means one two three cars, what would be the carshare of that car. And we can bring in some experiments: what happens when we run the service in that, or we try to optimize the service right away in our tool that we're already using. That's critical for us before we put the physical traffic in there, which is the most expensive, or the most expensive for us and for that city.
And even at this point, the city can decide if they want a service that is super comfortable, but we know how much it will cost. We know how much it's probably going to bring in some fares and how much the city is going to have to subsidize. On the other hand, that city can say, okay, this solves our problem, but we don't want to pay that much. In that case, we're able to bring in an experiment to show what it would look like if there were, say, less comfort, fewer cars, shorter commute times.
Ivana Karhanová: So, your service is still subsidised by the municipality, it's still part of the public service for the customer, they just pay for the ride in your app instead of tickets for public transport.
Dominik Janík: That's right, it's still public transport. Mass transit is an extremely subsidized business, not only in the Czech Republic, but also in the world. Unfortunately, it's like that everywhere. And in order for that service to be affordable, to be viable and to work for people and not cost as much as services like Uber, Bolt and the like, which in these surrounding villages is like five hundred for a very short ride, it has to be subsidized.
And it's up to the city how they want to have that business built. We've seen things like today where the city subsidizes the service fully and all of the fares are returned to the city, which is good because it gives the city an incentive to support the service and help develop it. But it's still important to remember that the service is significantly cheaper than mass transit.
Ivana Karhanová: For the village?
Dominik Janík: Exactly, for a municipality, a city or a cluster of municipalities. If I go back to how it works, some cities build their own public transport, buy two or three buses, which is extremely expensive, then they run on some fixed routes or hire a carrier. Our solution is much cheaper for them, with more comfort and much better service. This means that we can cover more of that region or that area.
Ivana Karhanová: How much does such a ride cost the customer, the citizen?
Dominik Janík: For example, today in Říčany the average ride costs thirty to forty crowns, which is almost comparable to the price of public transport in such small towns and localities. It can even be free. For example, we have had pilots with the Brno City Transport Company, which was free. We've had some employee rides as well.
It's always a matter of setting up what quality I want and how many vehicles I want, what comfort it's supposed to fulfill and what it's supposed to fulfill. Because not only does the technology make it more efficient as a public transport, but it can perform different tasks at different times.
If a municipality hires a transport operator and uses our technology, we can make public transport more efficient and we can solve other tasks like senior buses, delivering children to after-school clubs, and so on, because it's still just an algorithm that needs some conditions.
Ivana Karhanová: You said that you participate in the meetings of the local councils, you deal with the mass of municipalities, towns, with a large number of local government representatives. Are the municipalities interested in your data and services?
Dominik Janík: It is. And the smaller the municipality, the more it costs because it has these problems. First of all, the budgets of those municipalities are smaller, of course, by an order of magnitude smaller than cities, and they have those problems on a daily basis.
Citizens go to those mayors and it's much less anonymous than, say, a big city. So it's worth, and it's always a bit of a challenge to dig through the whole thing, because it's something new and it's something that's never really been here, even though we haven't discovered America, some sort of demand-response transportation by microbus has historically worked here.
But the hardest part for the community is figuring out what to expect from this. My original idea was that we were just going to sell an algorithm, data planning. And we totally blew that because we realized very quickly that this is not the way to sell anything to a small municipality or a small town.
Ivana Karhanová: So basically you have to give them the total solution including the minibus and the driver?
Dominik Janík: Exactly. And even though we don't have the minibuses and drivers, we hire them through various carriers. The idea that we would come up with some clever algorithm and the municipality would build its own system on top of it was completely naive. That's why today we have apps for drivers, for passengers and all the technology around that, and we've gradually added data scheduling to that.
And that's the key thing for that municipality, how they're supposed to understand that system, what they can do with it, what it's going to accomplish. Because today, for example, we're doing this kind of thing for Kamenice, where the mayor asked us how he should develop his village in terms of urban planning, whether he should build bike racks, bus bays, parking lots, or whether there will be drones flying around. And he said: Come and tell me what's going on. He invited a lot of planners historically and various architects and others, and they all brought him megalomaniacal projects with commuter lines to downtown, to Praha, and so on.
We were the first ones to look at it from the data perspective, from the perspective of who's there, what they're doing there, what's actually the behavioral aspect of these people, not logic-minded travelers, but regular people who are lazy. I wouldn't want to offend anybody, but they're just comfortable, they take the keys to the car and they go.
The question is, they didn't even really know where they were going. So the idea was that everybody was going to Benešov and Praha. And the result today? So far we see that most people go to Praha. Nobody goes to Benešov at all, and many people go to the surrounding villages that have train connections.
And this is a very interesting analysis. We will certainly publish it when we deliver it to the mayor, if he allows it. And I think we're unique, even from the perspective of at least Central Europe, in how far we've been able to go, what insights we have, and how even a relatively small municipality like this can benefit from the latest technology, from data that is common in other business.
Ivana Karhanová: So, they originally thought that they needed to build two directions of transit to Praha and to Benešov and you showed them that it's OK to go to Praha, but it's not OK to go to Benešov and instead of Benešov there's a ring of surrounding communities where people go.
Dominik Janík: Not so much a ring, but rather one particular line to Strančice, where there is a train. It's logical, most people still commute from the Praha area by car to Praha, and that won't be solved by parking houses or parking bans, entry bans and so on.
Some people are now behaving a bit more correctly in going to the nearest train, which then causes problems for those municipalities that have those trains, which then try to monetise parking in various ways and discourage those people. And we are solving that problem again, because then we will offer that service to those neighbouring municipalities, so that people do not have to drive to that municipality to catch the train.
Ivana Karhanová: The way you describe it, it sounds great. So what is the blocker for wider acceptance of this solution?
Dominik Janík: The biggest blocker today is legislation, because we are bringing something that has never been here before. Some redheading companies here have made a huge change in the taxi legislation, which means that today you don't have to have a taximeter and so on. And then there's mass transit, which is fixed-route, which has fixed stops, which is scheduled according to the CSN and approved by the transit authority. There's nothing in between.
We have regions, we have virtual stops, we have shared minibus. We're not a taxi, but we're not mass transit either. We have nothing to be approved by the transport authority, and that's a problem, because at that moment we are not mass transport and we cannot be in fare zones like Lítačka, ROPID and so on. The same thing happens in other regions.
Ivana Karhanová: So even if these people have a ticket, they have to pay you extra?
Dominik Janík: Exactly, the app pays us via Google Pay, Apple Pay and so on. For example, today we are integrated into the new test version of the Lítačka app, or PID Lítačka, but you can't pay us by fare, today we are in taxi mode, so we are legally a taxi, which is wrong. We've been here a year, but we've already dug into a lot of things and one of them was - a huge surprise for me - how the Department for Transport took it and invited us and formed a working group with us and said: Okay, we understand that this is some mass transit that doesn't have lines, but it has a region.
We perceive that the virtual stops, even though they are virtual, are fixed. I can even say today that maybe in 2024 or 2025 at the latest, there will be new legislation that will help these services. Not only for us, but perhaps also for foreign companies that want to operate here, so that they can effectively provide public transport that is dynamic, flexible, more efficient and ultimately cheaper for the municipality and more comfortable for the passenger.
Ivana Karhanová: Looking at it from a global perspective, do you draw inspiration from anywhere or how does it work elsewhere? And what is the demand elsewhere?
Dominik Janík: Historically there have been various attempts and most of them ended up being so ineffective that it would have been cheaper to have a taxi car that would take anyone around for free. And that was the problem, that there was an absence of some technology that could plan efficiently, which is our algorithm. Other solutions ended up because they were different university projects that didn't have a business plan, they were maybe well built, but they weren't a business.
Ivana Karhanová: Did they originally want to sell a data model like you did?
Dominik Janík: Yes. There are a lot of companies here that are interesting. Historically, there was a start-up called Mileus by Juraj Atlas, who is a friend and former boss of mine, who developed a protocol that connected taxis and public transport in the afternoon.
That was also a great technology, a great approach, but the concept wasn't there. I get it, it's stupidly scalable, investors don't like it, but fortunately our investors get this. So there are a lot of these projects around the world, primarily in Canada, America and Japan. In Canada it's similar, in America it's about some evangelization of mass transit in general, and in Japan it's a very good solution in principle, where really individual mobility is very small and primarily it's addressing the transportation of seniors, which is also an aging population.
The problem will be the same in Europe. And here in Europe, the most common similar services in Spain or in the West are for example the German Moia, a subsidised Volkswagen project, which is a kind of playground for autonomous mobility, but it actually runs in the centre and doesn't address this use case.
So, we are definitely alone in Central Europe. We're also alone in Eastern Europe, and I think also with the business model and the way we're trying to build this from the beginning as a kind of franchise, because we recognize that we need to be scalable and to pursue that technology and the development of data planning. But alongside that, we need to deliver an end-to-end solution, which I don't think almost anybody in the world is doing today.
Ivana Karhanová: You came across the fact that somehow lines are being planned, somehow public transport is being planned. Actually, the urban transport and the lines are approved. Do you believe that it will be possible to change this gradually?
Dominik Janík: I believe so. I believed that the carrier would appreciate it if we came to them with this and said, "Look, we can plan much better and we can do it based on data, we have the technology to do it, we have teams of people to do it. I always say that we have more degrees than names, we have a lot of PhD people from CTU and so on. But very quickly we found that the carriers weren't interested in that at all.
Ivana Karhanová: Are they afraid that you will take away their business?
Dominik Janík: Not really, on the contrary, they are very comfortable. They're not afraid at all, because they all have 10-year contracts and they have inflationary conditions, they have crazy termination conditions.
Ivana Karhanová: So, on the contrary, nothing at all is forcing them to innovate and come up with better services.
Dominik Janík: Not at all. On the contrary, they keep all the cities in a huge vendor lock-in. So we went to the city and we said: Hey, you guys are spending a lot on transportation and it can be done cheaper, better.
Cities have that problem because they're the sponsors of that transportation, and they're excited about it, and very often we address it with them. We have some projects going on today, but there's a blocker of those carriers. For example, this is how we came to one carrier who invited us - a city councilman in a city west of Praha and us.
The councilmen said: Hey, here's an option on how we're going to improve service. We're going to keep the mileage that you as a carrier get the subsidies for, but we want to increase the service, improve the service. The carrier came and before he even said hello to us, he said: I would just like to say to you to remember that you have a 10-year contract, and if you reduce that, we're going to increase the unit price, so what are we going to solve? And we were done, we went home.
Ivana Karhanová: That's quite sad, isn't it?
Dominik Janík: Yes. But unfortunately, that's the reality in most cities, where they are somehow contracted like that. It's certainly not the fault of those cities or the councillors. The technology wasn't there, the opportunities weren't there. The other thing is that cities are often afraid or don't have the capacity to delegate the planning of those carriers in any way.
They're also often happy to have a carrier at all. And that carrier doesn't need to deal with it, it's copy-paste for them, they have one person there who does it for five other cities. If the mayor yells a lot, he gets an extra line or three stops. Conversely, when the mayor doesn't have the money, or the city wants to somehow address how much it costs, the lines get cut and the frequency gets reduced.
This is absolutely wrong, the way to go is to optimize, to address who the service actually works for, and if there is a need, to increase the frequency of the backbone lines and, conversely, to address the excluded locations in a smarter way.
Ivana Karhanová: Where do you realistically expect to see a larger, more massive expansion? And this is despite the legislative barriers and what you just mentioned, the vendor lock-in with municipalities regarding public transport lines. I'm sure this will be of interest to your investors as well.
Dominik Janík: Regional operators and larger cities have understood that this is the way to go, and even though today they may not be able to save money by reducing or even replacing some lines, today they take it as OK, we will improve service and in the future we will not add fixed lines, and therefore we will save money. That's what's happening today at the county operator level.
We're in almost every county today at the big city level and small municipality level, and those small municipalities are addressing senior taxi, addressing senior transportation, so we have no problem being accepted there. A little bit of the problem is that the sales cycle itself is terribly long. Six months is no time to negotiate something with a municipality. We've been here a year, we've had four pilots and two customers, so roughly 25 towns in line.
The mass adoption will be when the legislation changes and we are on the tariff. At that point we can go after the Praha Lítačka and others. We already go there and have meetings, but they can't accept us under that tariff, and that's the biggest blocker.
Ivana Karhanová: What else are you planning now? Where can people find your services?
Dominik Janík: In several surrounding villages around Praha, mainly Kamenice and Říčany, and now we are adding other surrounding areas. We've been negotiating with Praha 6 and the surrounding area, which looks very promising as well. But we are going more into the regions, because Praha as such is very well covered by public transport.
The Central Bohemian Region has promised some subsidies, but they are also limited by legislation. In the regions it is much faster, so we are now preparing Plzeň, České Budějovice and Brno. We are going further and preparing for them senior taxis and a combination of our smart microbus transport. The regions are terribly strong, which is also related to the trend that mainly young families and productive people are moving to regions outside the big cities.
Ivana Karhanová: Looking away from legislative barriers, is there anything that limits you technologically?
Dominik Janík: Nothing limits us technologically. It's not completely related to the legislation, but in principle. It takes time to get a service like this up and running. It takes about half a year, a year. There's no time in transporting anything under a year, and you don't see much of anything.
So we're limited a little bit by the fact that it takes a relatively long time to invest the money in terms of that city and change something and it's a big change. Fortunately we're past the election and the next four years those cities can conceptually develop something. So that's a little bit of a limit, but not really a major limit.
Ivana Karhanová: Says Dominik Janík, CEO of the start-up CITYA, which brings the biggest innovation in public transport in the last hundred years. Thank you for coming to the studio and sometimes to be heard.
Dominik Janík: Thanks for the invitation.