Smart, sustainable, connected: The evolution of public transport

The term Intelligent Transport Systems (ITS) refers to information and communications technology applied to transport infrastructure and vehicles. Berg Insight’s definition of ITS for public transport includes systems installed in public transport vehicles as well as at terminals, stops, depots and similar. Included are also back-office IT systems which ensure that public transport services can be planned, scheduled and managed to achieve efficient operations. An important part of ITS for public transport further comprises solutions providing travellers with updated information about routes, departure times, possible disturbances and connecting services. The history of these different types of solutions dates back several decades and current state-of-the-art solutions include for example real-time intermodal and multi-operator journey planners, automated fare collection systems using contactless cards or NFC-enabled handsets for account-based ticketing, and advanced mobility analytics software.

Public transport plays an increasingly important role in societies as a result of continuing population growth in cities and shifting consumer preferences. Approximately 60 billion and 12 billion public transport passenger journeys were carried out in Europe and North America respectively each year before the COVID-19 pandemic. During the pandemic, the numbers dropped significantly and recovery has been slow in North America. In Europe, some countries are already back at pre-pandemic levels while others lag behind. Public transport modes include for example local and regional buses and trolleybuses, regional and suburban rail transport, metros and trams, and local waterborne passenger transport services. In 2023, the number of registered buses and coaches in Europe and North America reached 0.85 million vehicles and 1.1 million vehicles respectively. The economic value of public transport services in Europe is estimated to around € 160–175 billion per year, while the corresponding number in North America is around € 100–115 billion.

Berg Insight is of the opinion that the market for ITS in public transport will continue to grow in the coming years. Challenges such as urbanisation, climate change and traffic congestion continue to spur investments in public transport ITS, contributing to a positive market situation. Individual markets may however experience temporary fluctuations depending on the political climate, austerity measures and local developments. The total market value of public transport ITS for buses and trams in Europe is forecasted to grow at a compound annual growth rate (CAGR) of 5.3 percent from € 2.55 billion in 2025 to reach € 3.30 billion by 2030. The penetration of on-board computers with GPS location functionality and wireless communications in buses and trams in Europe is estimated to increase from 90.3 percent in 2025 to 93.9 percent in 2030, however varying considerably between regional markets. In North America, the total market value of public transport ITS is forecasted to grow at a CAGR of 5.0 percent from € 1.22 billion in 2025 to reach € 1.56 billion in 2030 and the penetration rate is estimated to increase from 91.9 percent in 2025 to 94.1 percent in 2030.

A group of international aftermarket solution providers have emerged as leaders on the market for public transport ITS. Major providers across Europe and North America include Canada-based Trapeze Group and Germany-based INIT with significant installed bases in both regions. Clever Devices and Conduent hold leading positions on the North American public transport ITS market, and the latter is also an international provider of fare collection systems. Additional companies with major market shares in North America include Cubic Transportation Systems and Avail Technologies. Siemens Mobility is also a prominent vendor of software in both Europe and North America. Examples of companies with major market shares on national markets in Europe include Equans and RATP Smart Systems which hold leading positions in France. Vix Technology, Flowbird and Ticketer are moreover major providers on the UK market, while IVU is a dominant player in the German-speaking part of Europe. Other significant players include the Spanish groups GMV, Indra and Grupo ETRA; French Thales; Atron in Germany; Scandinavian FARA, Pilotfish, Icomera and Consat Telematics; and the Austria-based companies Swarco and Kontron Transportation. Volvo Group and Daimler are moreover notable players from the vehicle OEM segment, while companies such as Scania, Iveco, Gillig and New Flyer also offer some conventional OEM telematics features for their buses.

The outlook for the public transport ITS market is positive, as several developments encourage increased investments in such technologies. The ITS market is positively affected by international public transport-related initiatives such as the ITxPT Association as well as APTA’s standards programs for public transport vehicles and ITS. The development of ITS has in recent years focused on increasing the level of integration and utilising technology advancements in fare collection solutions. Standardisation efforts are beginning to yield results as an increasing number of market players choose to comply with them and procuring organisations see the benefits in the form of lower costs. Another major driver is the ongoing global developments related to the concept of smart cities, where ITS in general and public transport ITS in particular constitute key elements to enable sustainable smart mobility.

This report answers the following questions:

• How is public transport organised and managed?
• What is the geographical structure of public transport fleets in Europe and North America?
• Which are the leading providers of aftermarket public transport ITS solutions?
• What impact will standard installed OBUs from the OEMs have on the market?
• Which drivers and barriers are affecting the market for public transport ITS solutions?
• What offerings are available from vehicle OEMs?
• How are the regulatory developments affecting the public transport ITS industry?
• How will the public transport ITS industry evolve in the future?