Transcript - Episode 1: Dr Manfred Rudhart, CEO Arriva

Ian Morrison: Hello, I'm Ian Morrison.

Welcome to the first episode in our CEO Podcast series. We're exploring how CEOs see the future and how they're driving transformation to achieve that vision.

Today I'm joined by Dr. Manfred Rudhart, the CEO of Arriva. Welcome Manfred and thank you for joining us.

Manfred Rudhart: Thanks very much Ian for having me.

I believe very firmly that public transportation can help us solve some of the very urgent and burning society problems that we have in terms of congestion and air pollution, and helping people get to work and where they need to be. So really happy to be here and talk about that.

Ian Morrison: Thank you very much. What do you think the transport industry is going to look like in 10 years’ time?

Manfred Rudhart: It may sound a bit less scientificy than you would expect it to be, but it has really a lot to do with providing basic services, seamless services.

My vision in the first place is that we provide so good services that people are making the conscious decision to move away from their car, drop their car, maybe even sell it, and simply day in, day out, rely on our services.

So, what does this mean? When I get up as a commuter in the morning, I probably don't even have to bother with looking up where my bus is, or where it comes at all because I know exactly ... I leave my door and go to the next corner, and then I have my ArrivaClick bus, which I've ordered either the night before. Or I've ordered them as a subscription because I know every single morning I'm there at 6:15.

Customers these days are used to a timetabled service. So, you know your 12-meter bus is coming up every five minutes, every half an hour, every hour, and then you have to catch that bus. Demand responsive is exactly what it says. So, if you as a customer have a demand, you download our app, the ArrivaClick app. You say, "I want to go from here, from my home to the airport," or wherever it is. Then in a couple of minutes a minibus turns up. You don't have to wait for the timetable slot.

So ArrivaClick bus comes, takes me to my major hub, be it bus hub, or a train hub. I don't have to buy another ticket. I don't even have to go on an app to buy another ticket because that's all seamlessly integrated.

Payment is done automatically. When you turn up on the bus or on the vehicle, the driver knows your name, you know the driver's name. So, it's a much more customized service to yourself. I think the biggest part here is really that you don't have to wait for a route or you don't have to cater to a route. You don't have to adapt yourself as a passenger to something which the bus company believes is the right thing to do.

Again, I'm not thinking in 10 years' time, I don't think that our mobility problems will be solved by flying taxis. Again, thinking about 2.2 billion of passengers we transport every day, you would need an awful lot of flying taxis to transport them. So, this is not the way into the future, but I believe that public transportation, well informed, a seamless mode of transportation will help us and will solve many of the problems that we're currently facing.

Ian Morrison: What do you see as the biggest challenges in trying to get that change in behaviour from people using public transportation?

Manfred Rudhart: I think the simple answer would be, and we're getting a lot of those answers around, just use data, use AI, use apps, but I think that's only a smaller part of the solution. In reality it starts with, again, with steel, with rubber, with aluminium, and the basic question of, if I want to use those services, do I have those services at all?

So there's a lot of again, infrastructure necessary. So, if we're talking about bus rapid transit routes, which I think could be the big solution for the future, this requires conscious decision of many cities to build them either as direct infrastructure or as dedicated bus routes where we have an advantage at the traffic sign.

So, this requires decisions which are relatively intrusive. And so, for me, those are probably the biggest challenges we see that we have to work together with so many constituents in order to make that happen. We cannot do this on our own. We have to work with cities. We have to work with the passengers. We have to work with data suppliers. So, for me this is a really daunting task technology wise or strategy wise to come up with a seamless solution and implement this in a city which is willing to do this.

Ian Morrison: And included within that, there needs to be collaboration across the industry, I guess, so agreeing what is the best way forward in achieving this.

You talked about some of the environmental pressures. I think if you look at some of the cities at the moment, to some degree, there's old tech is being pushed to some extent, if you think about cycling, and lots of cities are being encouraged to put in sort of cycle only lanes, protect you from the traffic. Do you see that as complimentary to your vision of the future for mass public transportation or is that a rival over use of space?

Manfred Rudhart: It's actually complimentary. So, in the integrated system that I just described, for me, cycling can play an important role as part of an integrated, almost seamless journey.

Ian Morrison: You talked about ArrivaClick, how close are we to actually seeing some of that on a broader scale?

Manfred Rudhart: We are already there. We have two pilots now or we had one pilot in Kent which was from my perspective really highly successful,

When we think about new technology and data driven business models, for me they sometimes seem to lack the perspective of is it really something we want or is it something the customer really wants.

We're now running the second version of ArrivaClick in Liverpool. Early days, we started that mid September 2018 so we're still in the ramp up phase. Again, technology works, the system works, the services work flawlessly. It also again tells us an awful lot about how our customers are behaving, how can we improve our services even better by getting direct feedback from our customers into our customer care centre. Again, being really mindful of what do the customers want and how can we serve that better and not believe that it's just simply modern and therefor people will want to love it, that's not the case.

Ian Morrison: And technology, you've clearly said is going to play an important part in this, where do you get your ideas from about what the potential for technology is, is that working with start-up organizations or doing a lot of that in house?

Manfred Rudhart: We're doing a lot of that in house. Again, we have an organization out there, 60 thousand people who are probably best geared to understand what our customers want. If we take the customer perspective and if we trigger off new technology based on what we believe our customers’ needs are and our customers wants are then I think we're best positioned. We have a lot of knowledge out there which we can draw upon and which can tell us and which can help us understand where the new transportation modes of the future and how can we better serve them.

Ian Morrison: Does this skillset change internally to some degree around needing experts in artificial intelligence and data manipulation and analysis, or is that just a natural progression?

Manfred Rudhart: That's by no means a natural progression. It starts even before we even think about artificial intelligence. There's a current trend which is un-reversible in the bus industry in particular to move from combustion vehicles to electric vehicles. With all the challenges that this means for our workforce because if you're an engineer who has be used to work on combustion engine for 20 years and all of a sudden, you're challenged to say this is now electric vehicle works completely different, I have to bring to the table completely new tasks. This is quite a daunting task not only for the engineer individually but also for us as an organization.

We have to establish and we're currently doing this, we have to establish completely new works and new ways of on the job training and for me it almost comes back to the old statement of, "it's lifelong learning." If I were to believe that an engineer who has worked on combustion engine for 30 years, is 50 years now, cannot learn the new tricks. If I were to believe this I would probably have to quit today because I'm 53. I firmly believe that if we provide enough training schedules, of we provide enough challenge and incentives for our people then it's almost a given that they will have to adapt, that they will adapt to the new technology.

Ian Morrison: So we've talked about how AI is going to play a major role within the vision, have you got any specific example of why you see that having a major part to play?

Manfred Rudhart: Picture a typical London train station, a lot of trains coming in there, infrastructure at its limits, if something happens then typically they have a lot of very experienced people, very intelligent people trying to reroute resources, reroute our passengers and you see a lot of phone calls flying back and forth.

Manfred Rudhart: What I would expect AI to do is, almost send the system as soon as the disruption happens, send the system into autopilot so that all the resource reallocation, all the rerouting of tracks and more importantly all the information that goes out to our passengers and potentially also individual rerouting of passengers because the system knows where they want to go, so they can send dedicated rerouting proposals or directions out to our passengers.

Ian Morrison: If you look at that in the context of road transformation and buses, is there an AI opportunity there, again, perhaps on an integrated basis, working with a traffic control systems, linked into your own control?

Manfred Rudhart: Again, it has something to do with how much infrastructure are we willing, or how much infrastructure as a society willing to dedicate, to allocate to public transportation? So if you think of an integrated mode where an AI system, which is basically regulating a whole city ... and that's really a daunting task. Is helping public transportation to optimize the services to our customers and optimize traffic flows, then I would see a role for AI there.

Ian Morrison: Do you think AI and driverless cars can also have a big impact on that ability to switch people from one method to the other?

Manfred Rudhart: I must admit that I'm still a bit hesitant to accept or to believe that driverless cars will dominate mobility in the near future. Near for me is a time horizon of 10 to 15 years. So, I'm still waiting to see how driverless cars will impact our modes of transportation.

I typically come to work on one of our buses. This is inner city London, hardcore mobility. If you see how much one of our drivers has to do in order to deal with very touchy traffic situations where there's a swarm of bikes swarming around him. There's pedestrian crossing the road. Just picturing, the software, which would be able to emulate all those decisions that our drivers has to take in milliseconds. That's something I have a really hard time picturing for myself.

Ian Morrison: I'd just like to say thank you very much for your time today, Manfred. It's been a fascinating discussion. It sounds like there's a lot to look forward to in the future for public transportation.

Manfred Rudhart: Ian, thank you very much for having me.

Thank you for giving me the opportunity to talk about the industry, which I believe has a lot of impact on daily life of our customers.

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