You’ve certainly heard the term, and chances are you use it every single day. But what exactly is SaaS , and how is it reaching beyond the Google Suites and Slacks of the world to improve public transportation? And how has SaaS helped cities and transit agencies deploy innovative transit services like on-demand microtransit, paratransit, and integrated first- and last-mile solutions?
Software-as-a-Service, or SaaS, is a concept that’s been around roughly 20 years, but which is experiencing its golden age today. With an estimated 15,000+ SaaS companies worldwide, it’s one of the fastest-growing segments in the IT industry. SaaS simply refers to a product or service that operates on a subscription-based model in which users pay for online access to software that is centrally-hosted in the cloud, rather than purchase and install the software on their own device.
SaaS is transforming nearly all industries: whether through sector-specific products in areas as diverse as education (“EdTech”) or finance (“FinTech”), or in sales-facilitation (e.g. Salesforce) or data storage and analytics (e.g. Snowflake) products that serve as the infrastructure of most modern businesses. Transit is no different: enter “TransitTech.”
Though software for managing some aspects of public transit has long existed, the current boom in TransitTech is made possible by the SaaS model. Legacy transit software had to be purchased and installed, was often complex enough to require in-house experts, and needed proactive patching and updating to stay current. Specific hardware — onboard ticket validators, guidance systems, digital signage — was often needed, adding to upfront expenses. This model slowed innovation, as agencies were reluctant to switch to a new provider due to sunk costs, and providers didn’t want to make transformative software changes if these were unlikely to sway entrenched customers.
With SaaS, transit agencies pay for their software (route planning, on-demand management, transit analytics) on a monthly basis and access a custom-configured instance of a centrally-designed and managed platform. Key benefits include:
- Solutions that can be launched quickly, without extensive debugging or trials, even when tailored to the transit agencies specific needs
- User-facing modules that are continually validated and improved through feedback from millions of riders, drivers, and dispatchers
- Fast innovation driven by competition between SaaS companies and the speed with which new tech can be deployed
- Iterative service design and refinement, driven by a fast cycle of analyzing service data and reconfiguring software parameters
