Equip Magazine Spring 2013 : Page 1
Spring 2013 INSIDE Industry News MAGAZINE AN OFFICIAL PUBLICATION OF THE AMERICAN BUS ASSOCIATION Tech Spotlight: Global GPS Tracking Q&A with Mike McDonal Innovation Showcase erman, director of the Chaddick Institute for Metropolitan Devel-by Eric Raskin opment. “Today it’s increasingly seen as an expectation.” Schwieterman’s research showed 7.5 percent growth in intercity bus travel from 2011 to 2012, outpacing increases in airplane, train, or car travel, and he believes wi-ﬁ acces-Wi-ﬁ -enabled buses are more common than sibility on buses is a ever before. But how do you get connected, key factor. In their and what’s the return on investment? 2011 study entitled “Who Rides Curb-side Buses?” the techagorapho-to have an Internet connection bia—the fear of wherever they go. That mentality Chaddick Institute found that 73 being without plays very prominently into the technology—is a direction in which the motorcoach percent of all pas-very real thing. industry is headed, as wi-ﬁ has, sengers were between Particularly for many passengers, transitioned the ages of 18-35, 52.1 as social media permeates the from a handy perk to an expected percent of all passengers said culture and the window for timely amenity. at the beginning of a trip that they reaction is sometimes reduced to “Two years ago, wi-ﬁ was seen planned to use wi-ﬁ during the a matter of minutes, people expect as a frill,” says Dr. Joseph Schwiet-ride, and 45.7 percent considered HOT Topic Information Highway A wi-ﬁ “important.” In a study that same year entitled “Staying Con-nected En Route,” portable device use at a random time surpassed 50 percent for the ﬁ rst time. And these numbers have only trended upward since. Though Schwieterman hasn’t yet ﬁ gured out how to accurately measure the ROI of o ering wi-ﬁ on buses and has no em-pirical data to prove to bus operators that it’s a proﬁ table investment, it’s obviously a step that operators without wi-ﬁ on board need to seriously consider. “It helps with customer retention and satisfaction, but whether it has a positive ROI for you, that’s related to where you CONTINUED ON PAGE 13 PREVOST. UPSCALE TRAVEL FOR TODAY’S PASSENGERS. Prevost coaches surround passengers with beautiful interiors and impressive amenities. High-end fabrics and flooring provide a luxurious look. Wi-Fi, headsets and electrical outlets assure convenience for tech-savvy travelers. And our High Decker design offers a better view through Prevost’s patented frameless windows. You can count on Prevost for exceptional performance and lower operating costs. And your passengers can look forward to the most comfortable ride they’ve ever experienced. www.prevostcar.com The ultimate class. PRODUCTS AND SERVICES RESHAPING THE INDUSTRY
Information Highway<br /> <br /> Wi-fi -enabled buses are more common than ever before. But how do you get connected, and what’s the return on investment?<br /> <br /> Atechagoraphobia— the fear of being without technology—is a very real thing. Particularly as social media permeates the culture and the window for timely reaction is sometimes reduced to a matter of minutes, people expect to have an Internet connection wherever they go. That mentality plays very prominently into the direction in which the motorcoach industry is headed, as wi-fi has, for many passengers, transitioned from a handy perk to an expected amenity.<br /> <br /> “Two years ago, wi-fi was seen as a frill,” says Dr. Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development. “Today it’s increasingly seen as an expectation.”<br /> <br /> Schwieterman’s research showed 7.5 percent growth in intercity bus travel from 2011 to 2012, outpacing increases in airplane, train, or car travel, and he believes wi-fi accessibility on buses is a key factor. In their 2011 study entitled “Who Rides Curbside Buses?” the Chaddick Institute found that 73 percent of all passengers were between the ages of 18-35, 52.1 percent of all passengers said at the beginning of a trip that they planned to use wi-fi during the ride, and 45.7 percent considered CONTINUED ON PAGE 13 PRODUCTS AND SERVICES RESHAPING THE INDUSTRY INSIDE Industry News Tech Spotlight: Global GPS Tracking Q&A with Mike McDonal Innovation Showcase Spring 2013 MAGAZINE AN OFFICIAL PUBLICATION OF THE AMERICAN BUS ASSOCIATION wi-fi “important.” In a study that same year entitled “Staying Connected En Route,” portable device use at a random time surpassed 50 percent for the first time.<br /> <br /> And these numbers have only trended upward since. Though Schwieterman hasn’t yet figured out how to accurately measure the ROI of offering wi-fi on buses and has no empirical data to prove to bus operators that it’s a profitable investment, it’s obviously a step that operators without wi-fi on board need to seriously consider.<br /> <br /> “It helps with customer retention and satisfaction, but whether it has a positive ROI for you, that’s related to where you are in the marketplace and what your customer expectations are,” says David Beagle, ABC Companies’ vice president of service operations. “The easiest thing to do in the charter bus business is compete on price. That’s the easiest thing to do. And it’s the most destructive thing to do. Operators need to find other ways to compete. One of them is wi-fi . It’s an additional feature that can be used to help retain or increase market share relative to other operators.”<br /> <br /> Brent Danielson, director of engineering for Motor Coach Industries, says about 30 percent of new MCI motorcoaches these days are assembled wi-fi equipped and he says “manufacturer install is the most cost-effective” way to go. According to Beagle, however, the difference in cost if you choose the more common route of aftermarket install is negligible. Whereas wi-fi units cost about $2,000-$2,300 as recently as 2009, the prices have dropped dramatically to about $500 per unit, with monthly support costs of about $60 per bus per month.<br /> <br /> There are several variables, however, that can affect pricing. For operators who don’t necessarily need wi-fi on every bus all the time, a portable unit that can be transferred from one vehicle to another costs about $100 more than a fixed unit. And the monthly service charges can vary wildly depending upon how many carriers the router is connected to. The $60 per month quote above is for a single service provider. Beagle notes that one Silicon Valley operator uses four different wi-fi carriers at once to meet high usage rates and a demand for uninterrupted service, a solution that can cost more than $1,000 per month.<br /> <br /> Another question facing operators is whether they want only wi-fi for their customers or want to package it with GPS tracking, engine reporting, and other features. Saucon, the company that provides most of the units ABC installs, actually started its product line with GPS tracking and later incorporated wi-fi.<br /> <br /> “You could piecemeal any of these options,” says Joe Smits, Saucon’s VP of business development. “You can start with just the wi-fi router and the air card to get you going, then piece in the GPS or video surveillance later, and build it into a full, complex system over time.”<br /> <br /> In the last couple of years, the reliability of wi-fi service on buses has noticeably improved and clearly outpaces train travel in that regard. There are two primary reasons for the disparity: Motorcoaches tend to use major highway corridors that are well equipped with satellite towers, and a train’s wi-fi signal often needs to accommodate 10 times as many passengers as a bus’s does.<br /> <br /> Two moves Saucon and other vendors have made to improve connectivity and reliability are balancing bandwidth evenly among all passengers using the wi-fi and eliminating video streaming unless an operator specifically requests it.<br /> <br /> Improved though the connectivity may be, bus lines are typically careful not to guarantee wi-fi service. They’ll advertise its existence with a “wi-fi equipped” decal on or near the door, but inside the bus they’ll typically post a disclaimer explaining that wi-fi is a “convenience when available,” or words to that effect.<br /> <br /> If a motorcoach is going to feature wi-fi service, it’s expected that it will also offer 110-volt outlets at every seat, and that’s where the greater expense is. Costs vary depending on install quality and inverter capacity, but a typical version ABC uses runs about $6,500 per bus.<br /> <br /> Since 2010, according to Beagle, 110-volt factory installs in ABC buses have grown from 22 percent to 53 percent. MCI’s numbers are similar, with Danielson saying that just over 50 percent of their new motorcoaches have outlets.<br /> <br /> One natural question for an operator to ask is whether this technology is in danger of becoming outdated any time in the near future. Saucon expects its current products to remain relevant for another seven to 10 years, and ABC’s Beagle expresses similar confidence in the latest equipment.<br /> <br /> “It appears that as it relates to data speeds, we’re at a bit of a plateau at 3G and 4G. So now is a good time,” Beagle says. “And when you’re talking about $500 a bus for the hardware, that’s not bad even if you have to update some of it in three or four or five years.”<br /> <br /> All of the numbers suggest that wi-fi service is impacting ridership, and it’s no mystery why. Buses can offer wi-fi in a continuous manner that no other mode of transport can equal. As Schwieterman says, “Young people, wherever they go, they think about how their electronic universe is going to come with them.”<br /> <br /> Motorcoach operators, wherever they go, would be wise to think about that as well.