3 Ways Ground Transportation Can Benefit From AI

Artificial intelligence has quickly become a top priority of the travel industry, with 92 percent of executives saying it would be important to driving business value for their organization over the next three years, according to a 2024 Skift and AWS Report. From revenue optimization to enhanced personalization, improved customer service, and operational efficiency, AI has already begun to transform the travel industry. 

Ground transportation, including intercity buses and trains, stands to particularly benefit from AI adoption.  

“There’s a huge opportunity in day-to-day operations. AI really shines when there’s a human in the loop and can dramatically increase safety, effectiveness, productivity, and profitability,” said Mike Gradek, co-founder and CTO of Busbud, a ground transportation online travel agency (OTA).

SkiftX spoke with Gradek to discover how ground transportation companies can leverage AI to build intelligent, scalable systems across their entire businesses. Historically, the sector has primarily operated offline, with many operators held back by legacy tech infrastructure and data silos. By embedding AI into its operations from end to end, the sector can seamlessly migrate online and become more efficient, effective, and profitable.

Real-Time Monitoring Improves Fleet Efficiency

AI can help travel providers offer a more sustainable way to travel, whether cross-border, cross-country, or cross-city. Using AI to optimize routes and improve fleet management, ground transportation companies can reduce fuel consumption and, therefore, fuel emissions.

For example, machine learning algorithms can monitor the performance of buses and other vehicles. By giving operators real-time notifications when maintenance is needed before a breakdown occurs, smart use of the technology can make the fleet safer and more efficient.

“By tracking vehicle data and maintenance work and using that data to make recommendations to staff, maintenance crews can focus their efforts on the highest risk areas and even do so proactively, preventing issues, reducing costs, and ensuring customers have a great experience,” said Gradek.

Improved Communication Increases Customer Satisfaction

Though ground transportation has traditionally been a mostly offline sector, its customer base is eager to search and book online, using websites, mobile apps, emails, social networks, and other channels. All of these interactions provide data, which AI can use to accelerate and improve customer service — via chatbots and virtual assistants, for example. Used effectively, these systems can help travelers book tickets, access real-time schedule updates, answer questions, and request post-travel feedback.

Busbud has been combining retrieval-augmented generation (RAG) and large language models (LLMs) to automate and accelerate the work of customer support agents, crafting accurate and timely responses to customer questions.

Even for companies that perform most of their sales in person, Gradek still sees AI playing a large role in making customer service more efficient.

“Even though the bookings are handled in person at a counter, the systems powering these transactions are often online, and for the systems we provide to our customers, they most definitely are, and we can leverage the full power of AI to help staff with their day to day,” he explained.

Demand Forecasting and Dynamic Pricing Drives Revenue Up

AI can also analyze huge amounts of historical and real-time data to predict demand and optimize pricing. Airlines and hotels have been using AI-powered revenue management tools for years. Now, ground transportation is also getting on board.

By analyzing data on special events, seasonal trends, and competitor pricing, AI can dynamically price each route segment to ensure operators present the optimal price. This can also help prevent overbooking, as more price-sensitive travelers will look to book off-peak travel.

“We’ve seen impressive results with operators using our revenue management software, which forecasts demand and can be used in a multitude of ways to improve operations,” said Gradek.

Busbud’s revenue management tool offers demand forecasting, dynamic pricing, fleet, and driver management, leading to double-digit revenue growth.

AI also enables ground transportation operators to better leverage their staff, allowing pricing managers to focus their attention on areas that will yield the most impact.

In addition, recommendations for right-sizing vehicles for specific schedules based on forecasted demand or redistributing customers across multiple schedules using pricing to ensure higher asset utilization are unique ways operators can leverage the technology.

Looking ahead, the Busbud development team is looking at more ways it can utilize AI to improve profitability for its customers.

“AI will continue to advance, with improved data utilization playing a crucial role in maximizing network revenues. We anticipate an increase in personalized pricing and offerings for passengers,” said Gradek.

AI is already making significant advances in reshaping intercity travel by optimizing operations, improving the passenger experience, and contributing to sustainability. As the technology continues to evolve, its role in transforming transportation will only become more pronounced, offering a more efficient, personalized, and seamless travel experience for both operators and travelers.

Platforms such as Busbud are leading the way. However, Gradek said further market adoption hinges on understanding the added value and building trust in the process, particularly regarding forecasts, while addressing the apprehension around change.

“Implementing a structured internal change management program to clarify pricing management adjustments is essential, but ultimately, witnessing increased revenues is what will persuade even the most skeptical critics,” he said.

Busbud is a global mobility platform that connects travelers with intercity bus and train tickets across more than 3 million routes in over 80 countries. In addition to its consumer-facing marketplace, the company provides B2B software solutions that support ground travel operators worldwide. To learn more, visit https://www.busbud.com/en.

This content was created collaboratively by Busbud and Skift’s branded content studio, SkiftX.