From Unprofitable to Revolutionary: How Autonomous, Pooled On-Demand Transport Makes Public Transportation Future-Proof

Autonomous on-demand vehicles
Innovation

03

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11

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2025

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The public transportation sector faces profound economic challenges. Rising operating costs, an acute driver shortage, and the unprofitability of serving rural or low-demand areas often lead to a vicious cycle of service cuts and declining ridership.

The PAVE Europe Working Group "Public Transportation and Shared Mobility," of which Padam Mobility is a member, has intensively addressed these current challenges in public transport. A Whitepaper, developed jointly with various industry experts, outlines important approaches to solving the sector's structural problems through technological openness. This article specifically examines profitability and demonstrates how the financing of public transport can be achieved in the long term. The full Whitepaper can be viewed here.

Greater Efficiency Through Autonomy: The Role of AVs in Cost Savings

The key to this transformation lies in the integration of autonomous vehicles and intelligent ride pooling. The high operating costs of conventional public transport are primarily due to two factors: high personnel costs, exacerbated by the acute shortage of drivers, and the unprofitability of fixed routes in areas with low demand.

AVs offer a targeted solution here: The transformation of the traditional driver's role on board to centralised remote monitoring fundamentally reduces the operating cost structure. At the same time, intelligent ride pooling minimises empty runs and maximises vehicle efficiency (reflected in higher occupancy, for example). These efficiency gains create financial leeway. Although the acquisition and maintenance costs for autonomous vehicles may be higher initially, the reduction in personnel costs quickly and sustainably compensates for these expenses in the long term.

In addition, transport companies can retrain skilled personnel for new positions – for example, as remote supervisors, fleet managers, or maintenance technicians – and thus create an attractive job transition. The available workforce can thus be deployed more effectively and profitably than is currently the case.

The Autonomy Upgrade: The Technological Core

The digital booking solution and the pooling software form the technological heart of the system. They dynamically control AVs, consolidate passenger requests in real-time, and thus prevent the inefficient empty runs that characterize traditional fixed-line services in peripheral areas. Autonomous, pooled On-Demand Transport must be understood as an extension of classic on-demand services, as the technology enables cost-efficient operation by utilizing existing resources significantly more efficiently.

For more than ten years, Padam Mobility has been working to improve access to the structural public transport network in remote areas with its turnkey on-demand technology. This extensive experience is now being transferred to the autonomous sector: In Linköping, Sweden, the "Ride the future" project—a cooperation between Transdev, Padam Mobility, and other research and industry partners—demonstrates the seamless integration of autonomous and on-demand technology into the urban environment. Driven by the vision of transforming urban mobility, the service utilizes electrified, autonomous minibuses that have been bookable via the Padam Mobility On-Demand App since September 2024. With over 50 virtual pick-up/drop-off points, the free service connects the University Campus with the Vallastaden district. The project's success, reflected in nearly 19,000 transported passengers and a 97% booking rate via the app, proves that intelligent booking systems are key to establishing autonomous services as an efficient, user-friendly, and effective supplement for the first/last mile.

Outlook: Future-Proofing Through Enhanced Profitability

The successes in Linköping and similar projects demonstrate that the technology is already capable of overcoming the economic hurdles facing public transit today. Autonomous, pooled trips are not just a technological experiment, but a strategic lever for scaling. The funds freed up by efficiency gains allow transport operators to sustainably invest in improving service quality and expanding their offerings across all service areas. In this way, the unprofitability of previous years is replaced by a flexible, accessible, and long-term financeable mobility concept that truly makes public transportation future-proof.

In the future, it will be essential for the public and private sectors to collaborate to mitigate financial risks while also ensuring the comprehensive and needs-oriented supplementation of existing public transportation, particularly in rural or low-frequency areas.

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