The ferry industry encounters growing initiatives in creating environmentally friendly and efficient travel solutions. As urban areas are expanding, efficiently employing waterways is getting more attractive for government bodies wanting to tackle issues such as overcrowded city-living space, traffic congestion and connectivity to rural areas. In firms it is also being recognized that environmental and social impact should be considered to create durable and responsible business models. Connecting business models to industry innovation and sustainability creates a high level of complexity and strategic potential for business development. Therefore, the aim of this thesis was to investigate and drive the connection between water transit systems and sustainable business model innovation and leverage it for highly innovative sustainable initiatives.

The Double Diamond design method was used to structure the project. The first phases, Discover and Define, covered an empirical case study at Damen Shipyards. The second phases, Develop and Deliver, included the design phase. The case was the Waterbus fleet that at the time of this thesis, was operational in the Rotterdam-Drechtsteden area for public transportation. The Waterbus was built and owned by Damen Shipyards and operated by Aqualiner. Within the water transit system, the operation faced business model challenges. The existing water transit business model was investigated and a tool for driving sustainable innovation of it was developed: the Pyramid Toolkit. The generalized toolkit contains a pyramid-shaped model, innovation cards, and a co-creation method for organizations wanting to create an innovation strategy for deploying or developing a water transit system. The Pyramid Toolkit was applied at Damen Shipyards, which yielded the Waterbus Strategy, containing recommendations to overcome the current challenges.

The thesis makes the following theoretical contributions. Firstly, it explains the complexity of the water transit system client structure and how it influences (financial) responsibility within the stakeholder network. Secondly, the profit formula of water transit systems was investigated. Income that is dependent on route design, ship passenger capacity, fare structure and subsidies must together cover total costs, which include maintenance and operating costs, capital investments in the ships, and potential penalties from the government. Thirdly, water transit systems are inherently sustainable. However, regulations and subsidies are essential to reduce cost barriers. Lastly, the shipyard can take a leading role in the maritime sustainability transition, as it has the advantage of technological knowledge and capabilities for building and financing hybrid and electric vessels.

Practically, this thesis contributes to the ferry industry with a tool for systemic, holistic overview of water transit business models. It provides a structure to analyze current practice and strategy. The Pyramid Toolkit highlights sustainability as a fundamental part of water transit systems – how it is present, how it can be introduced, what difficulties arise, and how it can be improved or leveraged for stakeholders. Furthermore, the Pyramid Toolkit, as a methodological model, can be crossed over to other industries with adaptations. Lastly, the Double Diamond process, design strategies, gigamapping, visualizations, participatory design and design roadmapping in this thesis are contributions to strategic product design theory and practice.