‘Public transportation is an important industry that affects many people around the world,” says Amos Haggiag, CEO and co-founder of Tel Aviv-based Optibus, “but it lacks technology.
“Many cities and public transit operators around the world still plan everything by hand – routes, timetables, vehicles, drivers – everything is done using Excel files and legacy systems.”
In 2014, Haggiag, while working as a programmer for Microsoft Israel, founded Optibus, along with co-founder Eitan Yanovsky, toiling nights and weekends, developing a software platform for cities and public transit operators to plan and run public transportation systems efficiently and smoothly. Today, Haggiag is the company’s CEO, providing overall guidance and vision, while Yanovsky is the company’s CTO (chief technology officer).
Optibus’s software enables planning and scheduling of routes and timetables, vehicle and crew scheduling, rostering, and predicting on-time performance. The software allocates the use of vehicles efficiently, minimizing what the industry terms “deadhead” trips, meaning when a vehicle operates without carrying or accepting passengers, such as exiting a garage to begin its first trip of the day.
The company’s first clients were Israel’s public transportation companies, but founders Haggiag and Yanovsky soon realized that managing and planning mass transportation systems was a global problem.
“What made the difference,” says Haggiag, “was when we understood that it was not just an Israeli problem. When we started, we thought it was only an issue for Israeli companies, and we were sure it was being solved worldwide. What gave us the confidence was that we saw it was a worldwide issue.”
The decision to expand to become a global company was critical to the company’s development, says Haggiag. Many start-ups begin on a smaller level, first in Israel, and over time expand to larger markets, such as the United States.
“For us,” he explains, “public transit is a very unique type of industry. It’s actually quite small in the US compared to other regions, such as Latin America, Asia and Europe. For us, it was important in the life cycle of the company that Optibus needed to be in all of these places. It’s really hard to do this when you are a small company.”
Cities around the world still plan everything – routes, timetables, drivers – using legacy systems
Today, Optibus has a large customer base in Europe, including the largest public transit companies in the UK. The company operates 70% of public transportation systems in the UK, including systems in London and many other cities around the country.
Haggaig adds that Optibus maintains a significant presence in the US, Italy, Germany, Spain, the Nordic countries, and South America. Optibus business units operating in individual countries are akin to autonomous units within each area. “Had we focused on one region,” he says, “we wouldn’t be where we are today.”
Optibus began with a staff of two working out of a garage, then increased to 15 workers in Tel Aviv. Today, the company has a team of 400 employees, with offices in 25 countries. It is, developing solutions that provide better service for passengers, increased driver satisfaction, and lower operational costs. Companies that use Optibus have eliminated several million tons of CO2 emissions annually. Optibus is the first unicorn (a privately held company valued at over $1 billion) dedicated to the public transportation sector.
Optibus software powers public transportation systems in 2,000 global cities – with 2.5 billion passenger trips per year
Haggiag explains that the company’s unique culture attracts workers who want to make a difference. “Many employees come to Optibus because they want to make a real-world impact. They like to see that their work affects the passenger, who is now taking a better route, or his bus is on time, and vehicles are driving through the city because of the code they are writing.”
He adds that many of the people at Optibus are what he terms “transit geeks,” who have a strong passion for public transportation and believe that designing better public transportation systems will help cities become more sustainable and more efficient, with lower toxic emissions and fewer traffic jams.
While workers at Optibus are motivated by measurable goals, such as reducing the carbon footprint generated by public transportation vehicles, reducing deadhead runs and idle times, Haggiag suggests that there are two other factors that they find even more meaningful – switching large bus fleets to electric, zero-emission vehicles, and bringing efficient public transportation systems to areas that did not have them before.
Electric vehicles require special planning factors not present in buses that run on gasoline or diesel fuel, such as charging times, location and battery levels.
Introducing public transportation to cities can also make a dramatic impact. Haggiag cites Kampala (pop. 1.68 million), Uganda’s capital, which did not have any formal public transportation system. Most people either spent an hour and a half walking to their workplace or took unsafe, unregulated taxis, which were frequently late. Using Optibus’ software, Kampala is now building a public transportation system for the first time.
Says Haggiag, “A person working for Optibus wakes up in the morning and says, ‘I am working on a project that will deliver a public transportation system to millions of people that didn’t have it before.’ That has so much impact.”
Interestingly, Haggiag says that the pandemic, rather than causing a decline in business, actually led to an increase in usage of the Optibus platform. “At first, COVID-19 was a huge crisis for the world of public transportation,” he recalls. Within one day, everyone stopped taking public transportation, and ridership went down by 80%-90%. We thought it would be impossible to add customers in 2020 and that it would be difficult to maintain the current base.”
Instead, he reports, Optibus more than doubled the number of its customers in 2020. What accounted for this dramatic increase? Haggiag explains that the pandemic brought rapid change almost every day. On the one hand, there were lockdowns, and schools were canceled. On the other hand, public transportation companies had to add transit lines to hospitals and vaccination sites, create new routes and change existing ones – in an industry that was not used to the need for rapid change. “Suddenly, we received many inbound requests about making changes. This accelerated our business in an unexpected way,” he says.
Where will Optibus be five years from now? Before discussing the future, Haggiag mentions the present and states that the company’s software currently powers public transportation systems in 2,000 cities around the world, including London, New York and Rio de Janeiro, and is responsible for 3 billion passenger trips per year.
“This is just the beginning,” he says. “The best cities are growing, and we need to reduce reliance on private cars because it is not scalable and sustainable. Cities are making huge investments in sustainability and building infrastructure to move people much more efficiently than by private car. If we do our work correctly, it can lead to transportation that is much different than today.”
Optibus is taking an industry that technology neglected and bringing it up to scale at a breathtaking pace. “There is so much data available about mobility – where people live and work, and their daily patterns,” says Haggiag, “that we can use the data and technology to create a public transportation system that will be so much better.“By creating a better public transportation system, cities can be much different than they are today.”
Amos Haggiag, CEO and co-founder of Tel Aviv-based Optibus, was featured on the first episode of the No Limits Podcast, launched by New Era Capital Partners and The Jerusalem Post. The six-part podcast series features in-depth interviews with CEOs of Israeli start-ups who share the experiences and challenges of developing successful companies in today’s fast-paced and demanding business environment.
This article was written in cooperation with New Era Capital Partners.