Public buses on a digital highway

Express 418 is gaining traction with its online booking service for private buses launched in 2016. Its next challenge is tackling the public bus market…

Pre-2016, travelling long distance, defined as inter-provincial (between two provinces) on a bus meant arriving at the bus depot at least an hour before departure to queue for a good seat.

Today, the scene has evolved. Online booking platforms in Sri Lanka have grown exponentially. PickMe and Uber, among numerous other copycats in the market, have done wonders in organizing the three-wheeler and taxi system in the country; telecom operators are doing the same for rail tickets. Even private companies operating air travel within the island have enjoyed the guarantee of bookings via online portals.

Buying long distance bus tickets online has been possible since 2016, when several private companies launched platforms to centralize some of the seat inventory on these routes. One such platform –Busbooking.lk by a company called Express 418 – is now moving in to manage public sector-owned long distance buses.

Busbooking’s business model is to link travellers with available bus seats, by compiling all available seats in a central reservation system. By using its system, commuters can reserve and pay for a seat online in advance, and arrive just in time for departure. However, being a private company, the platform was only able to extend services to private bus operators on select routes.

But, demand is growing.

Express 418 is a digital infrastructure services company that offers a stack-based transportation solution for commuters based on three layers – the Information layer, the Reservation and Ticketing layer, and the Operations and Monitoring layer

Despite launching with luxury and super luxury buses, Express 418 now extends its services to all bus segments classified by the Sri Lanka Transport Board (SLTB). Long distance express buses are categorised into four: Normal buses that do not offer air-conditioning, semi-luxury buses that have high back seats and fans, luxury buses where air-conditioning is a must, and super luxury ones that have a lower deck as luggage space in addition to AC.

The company currently connects commuters with 200 public and 148 private buses from a total 5,300 long distance bus inventory (1,800 public and 3,500 private – see Box B). “We will get there,” says Dinusha Kornkaduwa, co-founder and chief operating officer of Busbooking.lk, about the desire to connect all available seats on every trip to the platform.

Express 418 is a digital infrastructure services company that offers a stack-based transportation solution for commuters. “We have an information layer, a reservations and ticketing layer, and an operations and monitoring layer,” he explains (see Box A). Busbooking.lk is a front-end reservation and ticketing layer; SLTB Express is another.

While sharing identical technology in the back-end, the two platforms operate independently to offer commuters the option of choosing a public or private bus. Bookings are done via a dedicated app or web browser, explains Sachith Nanayakkara, the chief technology officer at Express 418.

SLTB Express – the public sector bus seat reservation service – came about through a tender by the SLTB in April 2017. The project was awarded to Express 418 in November 2017, and the platform was launched last month by the transport minister. In the private bus market, dealing with bus owners is time consuming as bus ownership is fragmented, versus the state where thousands are available. Achieving scale and gaining flexibility from the regulator were high on Kornkaduwa’s priority list. Now with access to the long distance public bus market with SLTB, he expects to speed up aligning public and private bus schedules via the online booking platforms.

The bus onboarding process for SLTB Express is different from that of Busbooking.lk. While all SLTB buses can essentially be included in the platform, the operations personnel require training before the system can be implemented, Kornkaduwa explains. “We train the depot and ticketing people; and once this is done, all buses leaving from that location (to all around the island) are onboarded on to the SLTB Express platform. For example, we have completed the training in Colombo, so the 200 buses leaving Colombo are now on the system.” Next they plan to onboard buses from Badulla, Kandy and Jaffna.

Many bus travellers are also price sensitive. He explains how all pricing is standard, with the ceiling set by the National Transport Commission (NTC). However, “some private buses operating on routes where all buses leave at the same time, like to Jaffna, charge a lower rate to win over customers, but SLTB and other public buses cannot manipulate prices,” he explains.

In addition to the set price, when booking online via SLTB Express, commuters are charged an extra flat Rs50 per seat on whichever route. This is essentially Express 418’s incentive for its ease-of-use and convenience offering to passengers. While there may still be the odd outlier who prefers to arrive early, purchase a ticket from the counter and claim his seat, Kornkaduwa is positive that, for the most part, they would choose pre-booking.

For price-sensitive regular commuters, the company is devising regular booking plans incorporating discounts to encourage wider adoption.

As Kornkaduwa and his team found out, digitizing SLTB’s long distance bus seats isn’t achievable in a hurry.

“Since November last year, we’ve been training their [SLTB] staff. Some of them are using a computer for the first time, and there is also a language barrier; we have addressed this by enabling multiple languages on our system,” he said.

However, Kornkaduwa and his team, who have dealt with the harrowingly long process of getting the fragmented private buses onboard, have honed their patience skills and tackled this challenge head-on, going live with the SLTB system in July 2018.

The SLTB Express platform is a shared revenue operation. Express 418 funds and provides the infrastructure, technical know-how, training and customer care, while SLTB bears operational personnel costs.

“During a peak in travel to a certain location, we are able to advise SLTB to allocate more buses to that particular route, which essentially means more bookings,” he explains.

Busbooking has raised two funding rounds so far, the last in early 2018. However, these two rounds hadn’t factored the company winning the SLTB contract. Now, the company is back in fundraising mode for an estimated $2 million for the implementation and to create awareness.

Kornkaduwa is hesitant to reveal the company’s last valuation, but says its private funders have recognized its tremendous potential.

Express 418 is intent on quickly solidifying its monopoly position in the market for SLTB long distance booking. In addition, Kornkaduwa reveals recent demand for short distance travel bookings, which may be the company’s next big step.

————————————————————————

EXPRESS 418

The company manages its platforms based on three layers

Information Layer – A passenger requires information on which buses are available from Colombo to Kandy, for example.

Reservation and Ticketing Layer – He can either visit the bus station or make a reservation on any of the company’s online ticketing/bus booking platforms.

Operations and Monitoring Layer – This is the system that ensures the bus is there at the stipulated date and time for the passenger to travel. It also monitors the CCTV and handles complaints.