Market share optimization: How Valerann can help road operators grow

Competition is a constant in all walks of life, and that’s no different for toll roads where drivers can choose whether to pay to use certain roads or use an alternative. In this blog, we explore how the competitive market for toll roads is evolving and how operators can increase market share through the use of the latest software technology.

Like any business, managing a road network and its associated infrastructure – such as toll roads – has to have the ultimate aim of generating revenue and operating profits for the companies or government organizations that run them. But there is competition here, and drivers don’t necessarily have to use toll roads and can instead use other means to get from A to B.

The percentage of users that choose a toll road for their journey represents the road’s ‘market share’ of relevant journeys travelled.

Demonstrable benefits for users

Smooth traffic flows, reduced journey times, better maintained roads, and increased safety, can all be reasons why a person would choose to pay money to use a road and be satisfied with that transaction, and importantly do that multiple times, i.e. as a commuter.

In the past, many drivers may have used a toll road out of habit rather than use any kind of digital data, and they would choose that option to avoid uncertainty, rather than actually saving time.

But road users have far more tools at their disposal today than ever before, and they can plan their trips and weigh up the options when it comes to paying tolls using a range of mobile apps. Google Maps, for example, is rolling out options of providing drivers with detailed journey information, such as toll pricing for a selected route and give users the option to go via a non-toll route using an "avoid tolls" option.

Data at your fingertips

With this type information at the fingertips of everyday drivers, toll operators can no longer rely on habit alone to gain marketshare. Road users have far more choice, and that means there is the increased likelihood of drivers not using a toll road at all. Users can also make an informed decision as to whether the cost of the toll translates into a tangible benefit that is worth that cost.

From a road user perspective, if costs are too high, then people will opt for alternative ways to travel rather than pay toll charges that can put additional strain on monthly outgoings. This is especially true in times when there are concerns about personal finances, and where car ownership is declining in some countries.

Road operators therefore have to be able to demonstrate that they provide a higher value to their users: the drivers that travel on those roads every day.

Leveraging the proliferation of data

It’s not all bad news for the operator, as this data explosion can have a positive impact and present opportunities for them as well. With advanced software tools such as Lanternn by Valerann, operators are able to collect and fuse different real-time data sources – be it floating or connected vehicles, social media, or weather forecasts – to better understand user behavior and the decisions made as to why their roads are used versus competing routes.

They can even see how an event or certain conditions have impacted a driver’s decision to use or not use the toll road. Take, for instance, areas where snowfall is prevalent; an operator can gain market share by clearing snow first and getting traffic flowing again ahead of other roads.

If operators can show the benefits of using a specific tollroad – particularly with data - then it is likely to be a winner when it comes to gaining “market share”, which is effectively more road users.

Market share optimization system

For Valerann, it is important to work closely with road operators to help optimize their networks – including toll roads – and solidify their competitive advantage in these markets. Lanternn by Valerann provides the world’s first "market share optimization management system" for road operators.

It allows them to see what events or conditions will gain or lose an operator market share, providing relevant tools to help maximize their share.

Lanternn by Valerann is assisting road operators by providing actionable data that helps them make effective operational decisions. This software seamlessly fuses data from available ITS sources – including radars, loops, sensors, satellite data, social media, and floating cars – and integrates into existing infrastructure, which presents combined data in a comprehensive and fully customizable overview empowering road operators to detect, prioritize, and clear events quicker.

By using advanced technologies, such as artificial intelligence and machine learning, along with historical data, Lanternn by Valerann can even serve as a comprehensive predictive analysis tool.

Supporting operators

With such powerful software capabilities, road and toll operators can gain competitive advantage through increasing efficiency of their operations, and importantly show the benefits of their network over other alternatives and competitors in the market, including different modes of transport.

This is particularly important for operators that are routinely under scrutiny for road charges, and this has been even more pronounced during the current cost of living crisis.

While costs of using toll roads are still at the forefront of users’ minds, if the road is well run and provides better value over alternatives, then it is more likely to be used, and revenue can be assured for paying debt or investing into future projects. The issues that come with underperforming toll roads can therefore be avoided.

This is just one example of how rolling out AI-driven software for road infrastructure can transform operations and improve overall business performance through gaining market share.