SWAT Mobility provides new mobility solutions to Japan
Enriching society by transporting more people and goods with fewer resources. With this vision, Singapore’s start-up SWAT Mobility has been providing new transportation solutions to society, mainly in Southeast Asia since its founding in 2016. After expanding business into the Japanese market in 2020, the company has developed tailor-made systems to address social issues unique to Japan. Starting with a demonstration experiment in Kitakyushu City, SWAT Mobility has continued to conduct demonstration experiments throughout Japan, including Nagano Prefecture and Osaka Prefecture. Using algorithms and technology to provide on-demand vehicle delivery services, SWAT Mobility is contributing to digital transformation (DX) by Japan’s local cities.
We interviewed Jarrold Ong, CEO and Co-founder of SWAT Mobility, Masashi Suehiro, Head of SWAT Mobility Japan, about how the company gained credibility in the Japanese market as an overseas startup and the significance of developing a problem-solving business in Japan.
Update : 2023/05
Solutions to keep Japanese communities moving
According to a recent global survey by the the United Nations, more than half the world’s population is living in urban areas. With so many more people living in the heart of the city, mobility management has become a top priority for almost every city.
In cities that have developed around the idea of each individual resident using their own personal vehicle, traffic congestion routinely brings major access routes to a standstill, parking takes up valuable land, and emissions have severely degraded air quality while contributing to global climate change. On the other hand, while traditional mass transit greatly reduces traffic pressure and emissions, it can often require difficult trade-offs when deciding which areas to operate in, and a miscalculation in planning can result in expensive routes being under-used.
Singapore-based SWAT Mobility provides demand-based transportation services based on advanced AI technology called a Dynamic Routing Algorithm. This system has been designed to provide solutions to essential vehicle allocation and routing problems, such as how many people or goods can be moved within a limited time, in the most efficient manner. “Using this technology, we provide systems for efficient transportation of people and goods,” says Masashi Suehiro, Head of SWAT Mobility Japan. “In the transportation of people, we offer on-demand transportation operation systems for public transportation and ride-sharing systems for businesses. In the transportation of goods, we provide a system to find the most efficient route for pickup and delivery with the fewest number of vehicles.”
Developing flexible solutions for changing urban needs
Launched in 2016, SWAT Mobility was started with the idea of how to enrich society by moving more people and goods with fewer resources. To realize that vision, they have been working with companies and transportation providers to enable them to transport more people and goods at lower costs by using SWAT Mobility’s unique technology. In only a few years, the company has put its technology to work throughout Southeast Asia, and has recently achieved success in Japan.
SWAT Mobility’s system derives optimal routes based on transportation demand and provides drivers with the latest route information. In the case of people, at the focus is where the greatest numbers of people are travelling to and from throughout the day. When users reserve rides on the app, the SWAT Mobility’s system can find the optimal route for available vehicles to pick up multiple passengers in the shortest amount of time. This allows users to reach their destinations in less time than a conventional fixed-route bus would require, and for less expense than hiring a taxi. The company also offers a software of route optimization for logistics, optimizingroutes to enable more freight deliveries with fewer vehicles.
Turning to Japan
Expansion into Japan holds many advantages for tech startups like SWAT Mobility. “First, Japan is simply a big market with a lot of potential,” says Jarrold Ong, CEO and Co-founder. “Second, Japan also has many strong businesses which are looking to partner with start-ups which have new ideas to offer. Third, for a startup, it is vital to build up your reputation, and Japanese clients are known everywhere for their high standards. If you can succeed here, it’s a big boost to your reputation not just in Japan, but also worldwide. And finally, start-ups need investment, and Japan has a vibrant start-up economy with many investors looking for new companies to invest in.”
Japan also presented unique challenges. While most of the nations ofSoutheast Asia are going through a period of strong growth, both in terms of their economies and populations, Japan has reached a stage of economic maturity and an overall graying of society as the population begins to contract. “As a start-up, you hope to find major problems that you can solve,” explains Ong. Currently, the problem that many companies are focusing on is social mobility, particularly for the elderly. “In ASEAN, there is a strong demand for pick-up and drop-off services for companies, carpooling services, etc.,” says Suehiro. “In Japan as well, SWAT Mobility has introduced new mobility concepts to public transportation, which is something we have done as much in ASEAN. The nature of demand here, however, is different.”
Demographic trends in Japan show that many people are flowing into urban areas, and the population is declining in most rural areas. This in turn means that existing bus networks frequently suffer from low ridership, making them unprofitable and unsustainable. Shutting them down, unfortunately, would leave elderly residents without mobility options for shopping, going to hospitals, socializing, etc. At the same time, existing service providers have not been taking full advantage of the technological possibilities that are available. “While Japan is an advanced country with a large population and an economically advanced economy,” says Suehiro, “it is also characterized by the fact that it has continued to follow the traditional ways of doing things for a long time while not fully improving its productivity and efficiency.” Recent initiatives by the Japanese government have encouraged an accelerated adoption of digital transformation (DX) throughout the country, particularly to improve accessibility in rural areas. As a result, many municipalities are starting to look to new approaches that promote DX, through demonstration experiments. “Japan has hundreds of cities with such problems,” says Ong. “Our hope is that new mobility solutions like ours, using our algorithms and tech to run on-demand transportation service can help.”
Kitakyushu – a city in need of a solution
One of SWAT Mobility’s early projects in Japan was a demonstration experiment in Kitakyushu, a city in southern Japan. The city was experiencing a problem improving its municipal bus services; ridership was low, and about 95% of the city routes were in the red. The Kitakyushu Municipal Transportation Bureau, which operates city buses, has attempted to revise timetables and routes in response to actual usage, but the analysis process, which relies on the expertise of veteran staff, takes an enormous amount of time and is not fully visualized. The public transit organization in Kitakyushu was very experienced, but the adjustments being made to timetables and routes were having little effect. SWAT Mobility took part in an experimental demonstration to analyze the full situation in Kitakyushu City Bus based on the data, and propose operational improvements.
SWAT Mobility’s approach was to conduct a thorough data analysis of the city’s bus service. “We found that improving the operation using our service would be likely to reduce costs. We also found that it would be possible to improve the frequency of service (how many buses run every hour) to match the demand of customers. In addition, we were able to provide an automated analysis tool, which has reduced the amount of time required for analysis,” said Suehiro. As this was just an experimental project, the results of SWAT Mobility’s analysis have not been put into practice, but they were able to propose changes that could lead to considerable improvements and provided the city with tools for future decision-making. “We created a tool that enables the operation improvement process, which used to take several months, to be executed with a single click,” he added.
The Kitakyushu project provided SWAT Mobility with an opportunity to apply their services to city bus systems. “This is something unique to Japan, which was not available in overseas markets,” says Suehiro. “This customized service was created for Japan after the company entered the Japanese market.” At first, the city government in Kitakyushu had not considered opening the demonstration project to overseas startups, but the introduction from the Japan External Trade Organization (JETRO) convinced them to give it a try. The results have been beneficial to both sides, with SWAT Mobility gaining experience and a valuable highlight for its portfolio, and the city gaining unique insights and new business connections that may lead to future investment. An official of the city’s Transportation Bureau says, “We would like to continue to work with SWAT Mobility to provide safe and comfortable services and ensure the sound and efficient operation of the bus business, which is a means of transportation for the citizens of the city.” For foreign companies that have no business experience in Japan, the demonstration experiment is an effective support system that introduces them to collaborators in addition to subsidies, according to an official of the city’s Startup Promotion Division. “For Kitakyushu City, we believe that adopting a foreign start-up for this program will stimulate other adopted companies, as well as provide an opening for overseas companies to enter Kitakyushu City and enter the Japanese market. Then, we will continue to work with JETRO and others to introduce this program to a wide range of foreign start-ups.”
New challenges and opportunities
The path to success in Japan has not always been a smooth one. “Communication was initially a big challenge,” says Ong. “We had no Japanese speaking staff at first, but once we were able to establish a Japanese office with local staff, things became much better.” An additional hurdle SWAT Mobility faced in Japan was the amount of work and preparations that was necessary to forge new business relationships. “In other countries,” he continues, “most of the businesses we work with are family-run, so networks are very important. Japan, on the other hand, is much more merit-based. The companies and organizations we present to are very careful about evaluating us against local and foreign competitors, making sure our solutions meet all their requirements.”
It was not easy, but it was worh the effort.The benefits of the Kitakyushu project have been far-reaching. SWAT Mobility’s successful results here have helped to establish their reputation when approaching new potential clients. “For municipalities, one of their first priorities is often whether other municipalities have done this before,” says Suehiro. “Thanks to the experience of Kitakyushu, we were able to start a demonstration experiment in Takatsuki City in Osaka Prefecture, as well as with other local governments and bus companies. Rather than asking us for the specific details of our proposals, they will often say ‘do the same thing you did in Kitakyushu’. What we accomplished there has had a huge impact.”
The project has also helped overseas projects outside of Japan. “Japanese companies are well known for demanding high standards, and for selecting vendors carefully,” says Ong. “In addition, Japan’s public transportation is considered some of the best in the world, so having success in mobility tech here carries a lot of weight when meeting clients in other countries.”
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