Improve yield in public transport - A focus on ICT capability

Critical to a public transport operation is the effective use of its inventory (e.g., seat capacity). However, so far most of the public transport operators have difficulties in bringing more yield into reality, while the airlines are enjoying the tremendous success with revenue management. What makes the difference? How can the public transport operators approach revenue management in an innovative way? Using the case of smart card adoption in Dutch public transport, this article makes an attempt to answer this question. Our finding suggests that the customer heterogeneity and the product heterogeneity alone do not qualify public transport operators for a revenue management. Instead, we argue that enhanced ICT capability and flexible pricing policies play an important role. The objective is to demonstrate the viability of revenue management and furthermore to advocate the yield improvement for the service operation and management, focusing on the customer-centric viewpoint.