In this short post, I am going to discuss the benefits and drawbacks of implementing cashback systems in public transportation. It comes as no surprise that the majority of the world uses public transport on a daily basis. According to recent statistics, the public transport market that was once valued at $212.80 billion in 2021 is expected to rise to a market value of $350.47 billion by 2030 (Straits Research, 2021). With the massive expansion of this market, there are also many new opportunities for innovation, such as targeted advertisements or implementing cashback systems. The latter will be the focus of this discussion.
Introducing cashbacks systems into the public transit industry can provide both the industry and the consumer with several benefits. They incentivize ridership by providing financial rewards, encouraging people to choose public transport more frequently, thereby reducing congestion and pollution. Additionally, these programs enable passengers to save money on transportation expenses through cashback on fares or on online purchases during their commute. Cashback systems also cultivate a sense of customer loyalty by rewarding regular passengers, leading to increased satisfaction and positive relationships with transportation providers. Moreover, the massive advantage it provides to the transportation, retail, and technology industries is that the data collected from these systems allows authorities to analyze travel patterns, optimize routes, and improve overall service efficiency. It can also provide them with information to understand customer interests and target them with more relevant advertisements. Thus, cashback systems promote ridership, loyalty, and data-driven enhancements in public transportation.
On the other hand, implementing cashback systems in public transportation comes with several risks. First, there is the financial burden on transportation providers, as the funding for cashback rewards needs to be managed, and it can strain limited budgets without proper planning and sustainability measures. Second, there is the risk of fraud and abuse. Additionally, the complexity and administration involved in introducing and managing a cashback system pose challenges. Companies or public transit administrators must handle system design, customer enrollment, cashback calculations and distributions, as well as address customer inquiries and complaints, which can increase operational costs and potentially lead to customer dissatisfaction if not handled efficiently.
Here at Enroute, not only do we partner with actual public transportation services, but we also have found a market that has not been exploited and revolutionized the way people commute and shop. After performing extensive market research, Enroute found that an astounding amount of online retail sales were being performed during consumers’ commuting hours. Subsequently, a personalized shopping platform was developed, which is integrated into and partnered with ride-hailing and mass transit applications as well as many retailers around the world. This way, our customers can ride for free (or reduced fares) through the cash back rewards as they shop and interact with their favorite stores. Through this new concept, Enroute is taking advantage of all the benefits of the cashback system in the mass transit industry while also mitigating the risk of the financial burden. We do this by bringing the cashback from the eCommerce/retail industries rather than getting paid by the public transport operators.