How Shotl is outperforming in passengers per vehicle hour (pax/vrh)

Every few months, Mr. Lukas Foljanty puts together a comprehensive report for the on-demand transportation community. In his latest reports, Lukas has introduced a compelling new concept for evaluating the on-demand transport industry: productivity.

He defines productivity with the following formula:

This metric serves as a proxy for assessing benefit versus cost.

• To calculate total income, multiply the average number of passengers per week (demand) by the average fare.
• For total costs, multiply the service hours per week by the number of vehicles, and then by the cost of operating a vehicle for one hour (including driver wages, vehicle depreciation, etc.).

Since fares and vehicle/labour costs can vary between cities, measuring productivity in terms of PAX/VRH allows for meaningful comparisons of transport services, whether fixed routes or on-demand.

Shotl have been calculating its productivity using this metric as one of the indicators. Results show that more than half of our running operations have a PAX/VRH value of 5 or more, which represents the top 10% of the operations. Among them, three of our current operations demonstrate notably high productivity values that consistently reach 10+ PAX/VRH, and have even seen weekly mean records above 15.

The key factors contributing to this high productivity are both endogenous and exogenous to the Shotl platform. Firstly, Shotl has a variety of different metric goals to optimize routes, for total time, punctuality, vehicle efficiency, etc, with several parameters that allow for +40 combinations. In high-demand environments, vehicle efficiency-related metrics seem to bring the best results.

Furthermore, it seems that factors related to the area design, such as the average trip duration and the ability to consolidate passengers travelling in similar directions, are key for achieving good productivity. In one of its very high PAX/VRH cases, the service area is quite compact, with average trip lengths of around 6 minutes. The hilly terrain discourages walking, making the DRT service a convenient alternative. Additionally, most passengers travel between specific areas A and B, which simplifies matching passenger routes. The availability of multiple stops in these areas provides enough demand to make an on-demand service valuable and not easily replaceable by a fixed bus line.

In another case, the service operates in a larger area but also with a larger fleet. The key to this success seems to be high vehicle density. With a vehicle available roughly every 2 square kilometres, it becomes easier to match passengers travelling in similar directions, thus enhancing the overall service quality.

Based on these findings, we recommend four strategies for successful on-demand transport operations:

• 1. Maintain High Vehicle Density: Regardless of the area size, ensuring a high density of vehicles helps to meet passengers' needs efficiently and improve service quality.
• 2. Consider All Transportation Options: Account for other modes of transportation, including walking, as they will influence your service’s competitiveness.
• 3. When scaling DRT services, it is advisable to avoid serving long trips, leaving them to fixed routes or using a multimodal approach that combines DRT with fixed lines.
• 4. Segmenting your service area into smaller sub-areas can be an effective strategy to achieve better productivity, rather than having a single free-floating area.

By adopting these strategies, you can enhance the productivity and success of on-demand transport services.