Coaches: the future of mobility

Gareth Evans talks to Barney Williams, Co-founder of on-demand coach platform Zeelo and finds out about the firm’s origin, how it works, what it offers coach operators and its plans for the future

If you know nothing about Zeelo, it sounds on the face of it like some fancy, funky brand – the sort that’s presented by a trendy man dressed in jeans, a woollen suit jacket and brown suede shoes, who is probably based in London. What does Zeelo mean and how is it relevant to the coach industry?
If you’re a smart device user (smartphone, tablet etc.), Zeelo may sound like an app – which it is, although it also works as a traditional website.

I first learnt of the existence of Zeelo when it was mentioned at November’s CPT Coach Conference, the theme of which was ‘Embracing the digital world: maximising online opportunities.’ Some CBW readers may view Zeelo as a threat, while others will see it as an opportunity in the belief they need to get onboard with it – to work with rather than against the platform.

Therefore, I was most interested when Zeelo called me recently – and I suggested a feature. I wanted to learn more and I was sure many readers would too. [wlm_nonmember][…]

[/wlm_nonmember] [wlm_ismember] What is Zeelo?

Asked to explain what it is and how it works, Barney Williams, Zeelo’s Co-founder, replied: “We’re an on-demand coach service. We use data to understand where and when there are surges in travel demand. We then look at this demand and compare it to public transport options. Where those options fall down, we run direct coach routes to the events or business parks that we’re running services for.

“Currently our focus is major events so we team up with football clubs, rugby clubs and events venues to use their data to understand where their fans are travelling from. We look at this and our algorithm, which is named Rina.

“Rina sounds like a person, but it’s started to learn how our routes come to be commercially viable. It takes the data we feed it and then compares that data to the public transport options. Where there are big pools of people coming to the event and they’re faced with having to travel on relatively poor public transport options – be it multiple changes, costly fares or length of journey – we’ll see that demand and run direct routes from where the demand is in a comfortable coach, so the travelling experience is far more convenient for those fans.

“Based on the research we’ve done, we’ve learned that travel can be the most painful part of the event experience. The other option they have is to drive, which can bring other negatives – including expensive parking and congestion from exiting after the event.

“We try to make that experience great for the fans by giving them priority exit in and out of the stadium, so they can get away quick – and also by making it really cost effective.”

So what is meant by priority exit? “We go to the event partner and explain that with lots of people driving, one of the biggest pain points of that is the inability to leave quickly after the event,” Barney said.

“We work with the event organisers or clubs to allow pick-up and drop-off points that enable a quick exit for the fans in our coaches. Our coaches can park in designated areas and allow customers to get in and out quicker.

“For example, with our Manchester City partnership, we have a separate exit compared to the rest of the car park, which helps coach drivers not get stuck in the big queues.

“We’re running routes where the public transport options are poor, so you could argue our biggest competitor is the private car. It’s getting people to understand that and moving them onto coaches rather than cars – and that priority exit has been a key driver in that modal shift.

“Other selling points for us include a guaranteed seat on the way to the venue, saving them from potential crush conditions on overcrowded public transport.”

Origin

The business can trace its roots backs to Summer 2011 when Barney and his co-founder Sam Ryan established their first venture. After growing up together in Banbury, Oxfordshire the school friends ended up going to the same university.

“By chance, we happened to go to the University of Leeds. It was there that we founded a company called JumpIn,” recalled Barney.

“Sam studied Accounting and Finance, so focuses on investors and growth, while I studied Environmental Business, which is quite relevant to what we’re doing now.

“JumpIn was a taxi booking and sharing app targeted at students. It was in the days before Uber had become established here – there was lots happening in the USA, but nothing in the UK.

“JumpIn grew nicely. We were present in five cities – Leeds, Nottingham, Liverpool, Birmingham and Newcastle. We had 5,000 regular users, all of which were students. The idea behind that was we’d notice students were travelling from pretty much the same place to virtually the same destination. It made sense that if a taxi could be shared, the price per passenger would be cheaper than any other type of service.”

In another aspect that would shape Zeelo in the future, Barney and Sam contracted taxi operators to work for them.

“Rather than the Uber model where you go straight to the driver, we worked with the operators in the town or city we were running in,” explained Barney. “Like what we’re now doing at Zeelo, the idea was we would increase the amount of work the operators would have as we were targeting our marketing towards a ring fenced group of students who travel regularly. Universities tend to have preferred suppliers, with only one taxi company, normally involving a big financial deal between the operator and institution. We found there were other operators who offered a brilliant service, but didn’t market at students as they didn’t particularly understand the segment.

“Students would book through JumpIn’s app, with the operator facilitating the work for us. It worked well. From an operator’s perspective it gave them additional work, allowing them to grow fleets as demand was coming at different times of the day, mainly the evening, when traditionally their demand would be during the daytime. Students enjoy going out mid-week, of course.

“We ran it for a year after we finished uni and we got to the stage where we could have continued the growth across the UK or sold the business. We decided on the latter, purely because other companies such as Uber were starting to become established in the UK. Sam and I were fortunate to have a good amount of funding but not £10bn.

“It seemed sensible when we received a good offer from Addison Lee in late 2014, a year after we started. The idea was we would use the network they had created across the UK to facilitate JumpIn’s expansion.

“I hate to say it, but it lasted about a month, purely because Addison Lee had not seen the threat other disrupters such as Uber posed – and it had to act quickly to defend its business. For example, Addison Lee didn’t have a major focus on app or marketing performance. Therefore, we had to go in and help rebuild the digital product and marketing to effectively allow the firm to keep up.

“We spent a long time on Addison Lee’s app, putting new processes in place to make them more agile. We ended up working there for two years. I became Head of Brand – I was responsible for the company’s global rebrand to position it as a premium option and clearly, it had to differentiate itself from the competition, which offered cheaper alternatives.

“Sam became Head of Product – he managed the booking channels from the website to the apps and all the booking portals used by the corporate clients. He had a team in place to ensure those products were up to the latest industry standards.

“For both of us, it was an interesting challenge to understand how the transport industry as a whole worked – both for a platform and operator. That led us to the creation of Zeelo in late 2016.”

Jargon buster

App
A computer program that is designed for a specific purpose for use on a mobile digital device (Collins Dictionary).

Platform
The software or hardware of a site. Facebook and Twitter are digital platforms, for example.

Disrupter
Any entity that effects the shift of fundamental expectations and behaviours in a culture, market, industry, technology or process that is caused by, or expressed through, digital capabilities, channels or assets.

Zeelo’s birth

“The idea of Zeelo started while we were at Addison Lee – it stemmed from the day Sam and I were going to Twickenham to watch an England rugby game,” Barney recalled.

“We boarded a train, which was crushed and overcrowded. I remember us looking and thinking that there must be a better way of getting there. We felt there must be a way of understanding where these people are travelling from, pool them together and put them in a larger, more comfortable vehicle (a coach) and then go straight to the sports ground.”

However, Zeelo’s inaugural journey involved students in Bristol, as Barney explained: “Having experienced JumpIn, we were aware of the natural surge in demand when students would need to travel home at the end of term – which the normal public transport network doesn’t cater particularly well for.

“If you take Bristol to Cambridge, it has insufficient demand for a regular service during the working week, yet when you understand there are a lot of students from Cambridge studying in Bristol; if you got them all together and ran a direct journey, they’d save time and money. That to us made a lot of sense. Therefore, we started by running those students home at the end of 2016 to understand what we were doing had legs and could work properly.

“I admit we were slightly naive as what we didn’t understand about the industry at the time was the empty leg situation is interesting. While we carried lots of students from Bristol to Cambridge, the coach returned to Bristol empty. Clearly, students go home for a break. We made quite strong presence on campus and marketed it to students and we actually got to good numbers, but economically it didn’t quite work as a business model.

“We quickly paused and thought about how we were going to actually make it work. We undertook more research into how coach operators work. At the same time, the whole Twickenham experience was still fresh in our minds. We both have an interest in sport, so that market was what we started looking at. We were fascinated by it – there are so many people travelling on a weekly basis to major sporting events that aren’t particularly well served by existing services – and the public transport options don’t flex or cater for those people.

“We managed to land a partnership with Manchester City as our pilot in understanding how these customers move and how we can make the economics work for the benefit of all. It’s spiralled from there.

“Our ‘Man City’ partnership started in February 2017. We’ve gone on to acquire more partners, including Cardiff City Football Club (FC), Wolverhampton FC, Aston Villa FC and Wasps rugby – in an official capacity.

“We also do some unofficial routes for fans – including Tottenham Hotspur, West Ham and we’ve recently started Manchester United.

“It’s all around the same premise, which is using the fan data, either through the partner or our own data sources to understand where home fans primarily are travelling from to get to each game. We’re focusing on home games as it’s a slightly different market – the club normally lays on coaches for the away games using their official partners. We started looking at it, but we found the away market is relatively well served.

“We found the biggest opportunity for us is during home games. Take ‘Man City’ as an example – it has a 55,000-seater stadium, 40,000 of which are for home fans, who tend to go to each game, travelling from across the country. If you look at the data, you can see they travel from parts of Yorkshire, Wales and London – and we’ve seen uplift in usage of our services.”

Commuter potential

In something that may go some way to reinvigorating the traditional coach commuter market, Barney revealed: “We’re starting to look at establishing commuter services. It involves using the same data, technology and algorithm, Rina – and it will fundamentally change habits for people who would normally drive to work.

“We’re focusing on major out of town business parks, which tend to have limited public transport. We believe the amount of opportunity to facilitate this demand is incredible.”

Partner operators

“We’re currently focused on the sporting markets and to partner with some great operators who can deliver excellent service and want regular work,” explained Barney.

“One of the benefits of these types of partnerships is recurring work, week in week out. We believe we offer an attractive proposition for operators.”

Zeelo has worked with 45 operators since it was established, but how are they selected? “We have a small operations team, which goes around and meets operators,” Barney replied.

“We tend to get operators through recommendations. On that basis, we’ve teamed up with Johnsons of Henley-in-Arden, Marshalls of Leighton Buzzard and Galleon in Essex.

“Cardiff City was a new area for us. We were recommended a really interesting company called Alexander Travel of Pontprennau, Cardiff. We like working with the team there – they’re a small operator with great ambition. They’ve understood what we’re trying to do and have given us advice and how we can market to customers in the area. Different clubs can have slightly different customers. As well as larger operators, we work with smaller operators who are willing to grow and work closely with us.”

Asked whether any checks are carried out on operators, Barney replied: “We carry out standard checks, including ensuring operators are legitimate and we visit them in person. Luke Ryan is our Head of Operations and Will Graham is our Operations Manager. Will goes round to see them. Part of the challenge can be explaining to them what we do and that we want to work closely with them. Some operators can understandably quickly get defensive – especially when there’s a seemingly new ‘random’ company called Zeelo. We go through a presentation with operators explaining what we’re trying to do and how we can work together. We believe there is a lot of value in getting to know operators.

“Ultimately, it’s about the service they can deliver. If operators are open to show us examples of their fleet, their premises and some of the people they work with, it tends to suggest they know what they’re doing.”

While Zeelo talks on its website about drivers using an app, it is not a prerequisite to be a smartphone user in order to be employed on Zeelo duties.

According to Barney, however: “We prefer it if drivers are encouraged to use our app. It helps the customer as it tracks the vehicle, but it also benefits the driver as it’s not just a tracker – it also includes all the stop details and passenger details. It’s all there in electronic form.

“We also provide details by email, so it can be printed out if preferred. We’ve had some drivers who have now actually asked to do our duties – an example being a Johnsons driver as she likes the app.

“We know it’s a learning curve for quite a few staff, so we try to train as many as is possible. The app also includes our support details – drivers can talk to a real person if they have any issues. We do monitor journeys from our office. We appreciate drivers are under a lot of pressure, so we want to give them all the support we can.”

When asked if there are stipulations on for example, maximum vehicle age or uniformed drivers, Barney responded: “We do have stipulations, but we understand not all operators are the same. Clearly, we prefer modern vehicles with air-conditioning and comfortable seats, but that goes almost without saying.

“We target more modern coaches, but we don’t set that in stone as we know some 05-plate coaches are in excellent condition, so we would use them. We take it on a case by case basis.

“We also expect drivers to be properly vetted with a DBS check. While we want drivers to be presentable, we don’t insist they wear certain attire – they’re driving for their company and I believe our customers understand we’re partnering with those drivers to deliver a service for Zeelo.”

Payments

Asked about Zeelo’s payment terms and system, Barney said: “We’re realistic – we understand the challenges facing operators, so we tend to pay immediately. We make a conscious effort to pay within the terms of an operator’s invoice as we understand that without operators, we don’t have a business.

“I know ‘operators first’ is a real cliché, but we feel that making operators wait 30, 60 or even 90 days for payment is unacceptable. If we’re open and transparent, hopefully operators will be the same with us.”

The price paid to operators is the subject of negotiation – but there is no bidding war on who can do the job for the cheapest rate. Zeelo will always pay the full cost of operating the service, full or empty.

Barney continued: “The pricing for our customers travelling with us has to be competitive, so we explain to operators what the cost price we’re aiming for and we agree with the operator what is sensible. Put another way, we have a target we want to meet to enable us to charge certain rates to our customers – but it’s also got to work for the operator, as well as for us.

“Depending on the route we’re running – remembering that it’s based on demand – some journeys could be half an hour, others two hours. It really does depend on where fans are travelling from. This isn’t a standard rate per se.

“When we build our routes, we would be up-front with the operators and explain there will be three stops on route A, but only one on route B and route C is a direct 20-minute run. We’re aiming to charge customers less as it’s closer to the venue.

“We’re not expecting a scatter gun of pick-ups – we aim for a maximum of three as that impacts on price, because the operators have to do more work. It also affects the customer experience if we’re stopping everywhere. Where possible, we’ll always go direct – we won’t do feeders.

“It’s a balancing act – ensuring the fare is attractive, the customer experience is great and that the operator is happy with the price we pay. So in effect, we have to work backwards.

“However, we’re not trying to go in with ultra low fares, to the detriment of operators. We know that if we squeeze operators and go for the cheapest possible, our service will fall apart. A lot of what we do is about repeat usage, so we need to ensure that quality remains high. We want customers to change their habits in terms of their modal choice.

“Again focusing on sport, we’ve recently done some research and found that 50% of premier league fans are currently travelling by car. You can understand why people drive as so many of them come from disconnected areas – it’s their only viable option. We’ve got to ensure people leave the comfort of the car for the comfort of the coach.”

Future

Keen to continue growing, Barney enthused: “We currently take thousands passengers a month – we want that to be tens of thousands by the end of the year. That’s quite a punchy goal to meet.

“Our major focus on sport will continue. We have further partnerships that we expect to announce shortly.

“We’re also looking at the summer season – the festival travel, which is quite a big market that we feel we can offer value in, especially with our data-driven approach.

“We’re also launching a premium offering called Zeelo Lux. An on-board host will serve food and drink. It will cover events such as Ascot Races and Henley Regatta. It will debut at Cheltenham Races next month. We’re excited about it as it shows how we can be adaptable.

“A broader range of major events will also be a focus this year, along with the commuter aspect, which we plan to start in early Spring. If it’s successful, we hope to quickly roll it out to other locations in the country – the focus being on major business parks and out of town offices.

“Once we’ve reached our passenger number target this year, we’d like to look at overseas markets. We’re currently sizing up the market opportunities across mainland Europe and the USA. We’re looking at parts of Africa too, where due to the lack of infrastructure, finding ways of getting more work for operators in those areas is fascinating. That will probably be in 2019.”

Barney concluded: “Our focus is now on the UK market and making sure that works well.”
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