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Rail travel has enjoyed something of a renaissance in recent years.
New high-speed rail lines are springing up across the world and the rolling stock used on existing routes is also being upgraded. While this is all good news, what is almost as important is the work going on behind the scenes.
Unlike airlines, which have had their ticketing standardized for decades, rail transport remains fragmented and it has been left to individual companies to attempt to declutter the data and pull it all together.
UK-based Trainline, the leading rail-bookig site in the UK, is one of those businesses. Just like with Sabre and Amadeus, Trainline was originally developed by a transport operator before being spun off. In 2015, private equity firm KKR bought the company for an estimated $756.5 million.
Since the acquisition, Trainline has expanded, buying Captain Train in 2016. The deal not only improved its in-house technology, but also gave it greater access to European markets.
This looks to have been a shrewd move given that rail travel continues to grow. In 2015, rail passengers increased by 2.1 percent to 9.4 billion, compared with the previous year.
Trainline has also spent a great deal of time and money developing tools to improve the overall user experience. The latest of these is what it claims is the rail industry’s first price prediction tool.
The person who has driven this expansion is CEO Clare Gilmartin. We spoke with her about rail’s ability to compete with air, the evolution of rail ticketing, and why there are so few female tech CEOs.
Note: This interview has been edited for length and clarity.
Skift: Could you, for an international audience, explain how Trainline works and a little bit about its history?
Clare Gilmartin: Trainline was started in the late ’90s because the rail network was starting to fragment in Europe.
We’re now operating across 24 different European countries, serving customers in 173 different countries, and we have 137 carrier partners, so Trainline is one place where you can come – single app, website – and buy all of rail.
Our mission is ultimately to create the world’s single biggest rail platform, just making rail a lot more accessible for everybody, making it easy to compare across carriers, making it easy to buy and giving people a lot more travel information on the go through mobile specifically.
Skift: In terms of your revenue stream, you get your money from commission from the train operating companies?
Gilmartin: Train companies pay us a commission for every ticket that we sell. That’s good because it means we’re only successful if they’re successful and vice versa. We also partner with many global travel brands, B2B and B2B2C, we provide rail for them. Then the third piece of our business is white label where we provide the online retailing for many of the train companies, and that’s both giving them an app as well as mobile web and desktop.
Skift: I guess the benefits of using you, rather than the operating companies themselves, is that you can compare fares, because you charge a booking fee and some people don’t. Why do customers go to you and not direct? What’s making them come to Trainline.com as a platform?
Gilmartin: Well there are a few things. As I said, we are the place where you can combine different carriers and you can compare across carriers where multiple carriers compete on the same route. We have a world class app and website, so it’s one click to make a purchase with all your familiar payment methods, languages, all that sort of stuff.
We have created, over the last few years, data driven features specifically because we believe customers want real-time travel information and they want predictive machine-learning driven travel information.
Consumers wouldn’t say it that way, but things like predictive congestive information, predictive price information, predictive delay information, all that sort of stuff. We’re both the single place to buy everything and cross-compare by multi-carrier journeys, but also a real-time travel companion on the go.
Skift: It seems like in the past, maybe 10 years ago, Trainline was mainly transactional. Now you’re trying to get people to use you more for other things as well, making it more of a full-service proposition.
Gilmartin: Yeah, I think that’s fair. We’ve invested heavily in our technology team over the last three or four years. We have 250 rail tech engineers now, which I think is the single biggest technology team in rail probably globally. We’ve invested a lot in mobile very specifically because it’s such a natural mobile category.
Over 77 percent of our visits today are through mobile to give you an example, which seems a lot higher than many travel players. We’ve invested in data science, leveraging our scale and our data to translate that back into helpful features for travelers on the go. I think there’s so much more potential in that quite honestly.
Skift: You’ve also grown your geographical reach in the last couple years. Can you tell us a bit about that and how you’ve gone into Europe and how it all kind of fits together for Trainline?
Gilmartin: Yeah, absolutely, so in early 2016, we acquired a company called Captain Train, which we rebranded quickly to Trainline, and what they had done is they’d built out the European partnerships in rail and the combination, therefore, of the two means we’re now present in 24 different countries supply-wise, and we have over 137 different supply partners.
And I guess the market dynamics in Europe are similar to what they were in the UK 20 years ago in the sense that the market is liberalizing and fragmenting. You now have multiple players operating in most markets and indeed the European Commission has been on a journey to open the market up further by 2023, all the domestic markets will be open to private tender and private competition.
We saw the same opportunity in a way across Europe as we have seen in the UK all that time ago. That is to bring it all into one app, one website, deliver a world class online experience, not just world class for rail but world class in general, and layer in all this machine learning and artificial intelligence by way of helpful data driven features on the go to encourage people to take the train more because rail is such a better way to travel than short-haul air.
Today, there are 10 times more rail journeys in Europe than there are air journeys, so I firmly believe that rail needed a great travel companion, that it needs to be more accessible online. It needs to be more transparent and that’s the job that we’re doing.
Skift: There’s a new route opening from London to Amsterdam and you can go to the South of France, you can go to Belgium and as long as you can connect all these different journeys up, it’s going to make it easier for customers.
Gilmartin: Exactly. It’s not just the fragmentation of the supply base, and you know there’s now over 300 different rail carriers in Europe, which is probably 50 percent more than there were 10 years ago, so it’s fragmented fast.
But it’s not just fragmentation, it’s also the fact that the high-speed network is growing massively in Europe. I mean it started in France in the late 80s, but now most major governments across Europe are investing in high-speed rail, and if current plans are followed through on, the high-speed rail network in Europe will quadruple over the next, say, 10 years, up to 30,000 kilometers.
Every time a major artery or a major line converts to high speed, we see a dramatic share shift from air to rail. I mean London-Paris is probably the best example, but Berlin-Munich has opened, there’s a whole host more, Madrid- Barcelona, Milan-Rome, all of those have seen a dramatic shift from air to rail and it’s because it’s a much better customer experience.
Whether you’re traveling for leisure – people see it as part of the destination experience, the café style experience – or whether you’re traveling for work, it’s just much more productive time.
You don’t have all the stop-start friction that you have in air, so all of that together with the fact that it’s so much better for the environment than traveling by air. I mean one twentieth of the CO2 emissions. I think if you stand back, the right thing for us to be doing as a society is to be encouraging people to take the train more instead of air, but also instead of road.
Skift: Do you think it’s realistic in say the next 10, 20, 30 years’ time that these journeys that were done maybe by flying or driving will be replaced by rail, or at least rail will have a greater chance to take those customers from cars and from planes?
Gilmartin: Yeah, yeah, I do. I think our customer research suggests around four hours is the journey time, anything four hours or less is when people will typically choose rail over air and yes, as services get better, as more and more journeys become high speed, it brings more of those air routes into contention for a rail.
I think people have a growing awareness of the detrimental environmental impact of transport as well. I think that will be a consideration factor of the medium to long term.
Skift: You mentioned before about the EU’s influence and the EU has had a massive impact on the air industry. It liberalized it and made it easier to fly. Train travel within Europe, until recently has been left behind. Do you see a bright future for it?
Gilmartin: We’ve seen a dramatic change in terms of the number of carriers operating in the market over the last 10 years. In Italy you have Trenitalia and Italo competing head-to-head on many of the major lines, and that’s been great for customers. In Germany, you have HKX competing against Deutsche Bahn but also many regional players also operating in the network. In France, you have Trenitalia and SNCF competing on some lines, so across Europe really, we’re seeing the market fragmenting and multiple carriers competing and I think that’s great for customers, better service, better punctuality, more choice.
Skift: In terms of you accessing the tickets from these European players, do you just plug in to the direct feeds from these companies. How does it work?
Gilmartin: Rail is a data scientist or a technologist’s dream because it is not standardized at all. The data isn’t standardized. There’re 35,000 train stations in Europe, there’s only 2000 airports, ish.
And there’s no standardization for station names, for ticket types, for adult versus child, nothing, so we’ve had to create our own proprietary data standardization and equally we’ve had to create our own proprietary journey search, so we’re the only operators, to the best of our knowledge, that combines multiple carriers in the same journey. Be that outbound with one, return with another or be it multiple carriers delivering different journey lengths.
All of that we’ve had to create from scratch quite frankly because it didn’t exist in rail. What you had before was quite siloed train carrier inventory systems.
Skift: In terms of the future, how far ahead are you looking because there’s blockchain and the threat it poses to intermediaries like Trainline. Are you worried about it?
Gilmartin: I’ve been in technology now for 15 years. I think there will always be new technologies and new innovations. What we do, is stay incredibly close to our customers and as I said, we have with the 250-strong rail tech engineering group, we have probably the biggest engineering and development team in online rail globally and our job is to continue to listen to customers and tailor what we do exactly for them.
I mean it’s certainly served me well over the last 15 years. Of course, we stay tuned to advances in technology, be they through payments or voice or whatever it is. We have multiple R&D projects on most of those.
Skift: How difficult or challenging would it be to add the U.S. or Asia to the overall Trainline experience?
Gilmartin: Not difficult at all.
Skift: Are there any competitors over there who are doing something similar?
Gilmartin: Not especially, not especially. As I said, to the best of our knowledge, we’re the biggest online independent rail platform in the world. I mean in essence, customers are, the customer’s needs are quite similar, globally. You know, I need complete transparency on all my options, I need to be navigated to the cheapest or the fastest journey, I need to be able to buy in one click, and I need real time travel information and data and journey information along the way.
That’s the same regardless of what country or the complexity is often in the carrier connections and the interfaces and harmonizing the data and you know, all the backend stuff, but that’s what we’re here for.
Skift: It just seems at the moment, it seems there’s quite a lot of change going on because Voyages-SNCF bought Loco2, Expedia bought SilverRail. Does this mean people are catching on to what you’ve been doing?
Gilmartin: We have a bunch of things happening I think. Rail is a huge vertical within the overall travel landscape. It’s $230 billion, so it’s huge, and as I said, 10 times more rail journeys than air journeys, so it’s a big vertical.
Yet today still 70 percent is offline, and clearly, we’re blazing a trail to convert more of that offline into online by aggregating everything up and doing all the things I described. I think others are taking interest because it’s a huge opportunity. It doesn’t surprise us that there’s activity in the space. We’ve long believed that this a huge opportunity. It seems, you know, finally others think the same.
Skift: Expedia obviously see the benefit of having rail holidays, rail travel integrated within the wider travel landscape, which makes me think that there’s plenty of untapped potential for rail.
Gilmartin: Yeah, yeah. I mean I started at Trainline nearly four years ago now, and I couldn’t get over how much of rail was still bought offline.
That horrible queuing experience where you look at people in front of you, they’re stumbling at the ticket machines, and this happens right the way across Europe. You’re worried that your train’s about to leave, I mean, it’s possibly the most stressful, horrible situation imaginable, and technology can solve it.
Ticket machines, much as they did serve a role in the past, they get updated every two years and we change our UX 200 times a week. So clearly, a more mobile and online driven user experience can deliver so many more benefits to customers, it can be personalized, amongst other things. It was the vertical that I think probably has the biggest online upside from where we sit today
Skift: There’s also the potential, as we’ve seen with apps like CityMapper, in multimodal, so you know, rail to taxi or rail to plane, and bringing the whole system together. Is that something you’ve thought about?
Gilmartin: Yeah. We have, we’ve built out our long-distance coach offering across Europe, it’s not as big obviously as rail overall, but there are many examples of journeys where coach can fulfill the last leg, or in times of disruption, coach offers an alternative.
Skift: Do you feel that the travel and tech industry could do more to support female leadership?
Gilmartin: I think we have far too few female CEOs in general, not just in travel and tech, and I don’t think travel is particularly better or worse, but yes, in general I don’t think we have enough women in leadership roles, be it business, politics, healthcare, whatever it is.
I see is as my generation, our generation’s job to change attitudes, to change how work gets done, to encourage more women to go further in their careers, and I’m quite bloody-minded about that. I work incredibly hard. We’re very focused on results here, but I equally get to see my kids in the evenings and at weekends, and you know, that’s what I mean.
I think a lot of the policy changes were made by previous generations to help women continue in careers, but a lot of the more subtle attitudinal changes need to be driven now by us.
We try to do that. We’ve created a Women At Trainline group, which is really a network so that women can share stories and in a way, derive confidence from the things that others have done. That’s hugely helpful. We have a mentoring program to help both women and men actually learn from those that are five or ten years ahead of them, which has always helped me. We’re reaching out to Code First: Girls and others to just encourage more women into tech.
Skift: Are you optimistic or do you still think it’s a long way away?
Gilmartin: I mean, many people before me have been asked that question and I have as well and I’ll be asked I’m sure many times again. I am really hopeful to be honest with you. I think you know we’ve hired some great women at Trainline over the last few years, and they are thriving, women and men.
I think it’s up to us to share stories and to help make leadership seem achievable together with the other priorities women have in life.