13/10/2021 Shared mobility and ride pooling took a backseat in 2020 and early 2021 because of pandemic-enforced social distancing. But as people come out of lockdowns having radically altered how they commute and travel, what is the potential growth and development of shared mobility solutions like ride pooling?
Robert Heinrich, CEO, MOIA, the ride sharing service of Volkswagen, and Christian Back, Partner and Co-head of the automotive sector, Mazars, discuss how new mobility offers could overtake private car use, the impact of growing sustainability expectations and the importance of partnerships.
Christian Back, Mazars: We read, hear, and see so much about developments in the mobility world that would reduce individual car ownership, encourage shared rides, and help people make more sustainable travel choices. Providing ‘bundled’ and easy-to-use alternatives would surely make private car ownership and use less attractive in certain areas, and for certain uses like short trips in big cities. This is especially true when considering the hassle of car insurance, maintenance and breakdown and accident cover. Ultimately, mobility as a service (MaaS) means more convenience for customers and more commercial opportunities for businesses. Yet progress on the ground seems relatively slow.
Is that a fair assessment? And where does MOIA fit into this?
Robert Heinrich, MOIA: Shared mobility can only truly take off if the infrastructure and appetite exist. At present, the vast majority of all urban travel, roughly 70%, is done by private car, while public transport accounts for around 20%. At MOIA, we offer a service that encourages city drivers to switch to ride sharing, providing them with a solution that makes travelling across cities easy - as well as one that makes a positive contribution to the urban area by reducing single-occupancy vehicle use.
Ride pooling through MOIA combines the advantages of private cars and public transport: offering users a ride on a journey that someone has ordered via an app. That means we can fill vacant seats to make each journey more efficient.
Considering the European market at large, few business models are relevant and established in the future transport field. MaaS is still in its infancy but that does not mean it lacks potential. From a customer and regulator standpoint, it is only growing in importance because of increased calls for more sustainability and more consideration for how we live and move in our cities.
What’s stalling progress?
Christian Back: It may be too early to know what kind of MaaS solution makes it into the mainstream and becomes part of the daily commute. I’ve seen a lot of new mobility offers hit the market and then falter. Meanwhile, every car owner knows the disadvantages of driving in urban traffic: constant congestion at peak times, hard-to-find and expensive parking and environmental pollution. It’s fair to say the ‘status’ attached to cars will likely decline over the coming decades because of increased commitments to reducing the use of fossil fuels.
In your view, why is it still difficult to get people excited about alternative mobility offers?
Robert Heinrich: We naturally get stuck in our routines and once we have our commute sorted, it’s difficult to change. In practice, that means very few people check what mode of transport is, on that day, the cheapest, fastest and most convenient for them. We make identical trips routinely and the decision we took months ago can be something we never think of changing - even if it is no longer the best way of getting around. That behaviour is further entrenched by how many of us pay for transport. We commonly have monthly and yearly season tickets for public transport and car leases that run over a fixed term, which mean commuters are going to use what they have already paid for. Up against that, providers of more flexible mobility solutions like ride pooling have to offer their product at an attractive price and ensure they can ‘link’ their products to other modes of transport so drivers reconsider their routine.
Policies to accelerate shared mobility
Christian Back: Policy at the local, regional, and national level is encouraging carsharing, including dedicated parking spots and special operating areas for shared vehicles. Much of that is in response to pressure to make cities more environmentally-friendly. In Europe we are also seeing tighter requirements on the vehicle producers – the original equipment manufacturers (OEMs) – which includes reducing emissions below a certain amount of grams per kilometre travelled, including substantial fines if they fail to comply. OEMs, in response, have been largely welcoming of new legislation and keen to show the public they are seriously interested in tackling environmental issues. A key next step for OEMs will be to make bold commitments that cover their whole supply chain and not just their immediate operations.
With policy measures differing city to city, what role do you think legislation plays in helping new transport methods be more widely used?
Robert Heinrich: Governments need to help make private car usage less attractive and shared usage more convenient. Regulation is crucial to create city-centre tolls, driving restrictions in the most built-up areas for the sake of pedestrians, and the closure of parking areas that take up space that could otherwise be converted into use by small business owners or for open spaces like public parks.
Cities with very high-density populations have the best chance of seeing today’s shared mobility services work effectively. Local governments need to work with mobility providers and app developers to restrict the dominance of cars and elevate the status of shared vehicles, bicycles, and pedestrian walkways. It may begin slowly but when people find ways to commute conveniently, and affordably at the same time as making their cities greener and generally more liveable, they will be unlikely to want to go back in time.
Providers need to create partnerships
Christian Back: In addition to legislation, we know technological innovation is crucial to the success of new mobility services. Providers have to be on top of new developments in order to give customers what they want, and they have to continuously collect and apply data to make getting around easy in real time and environmentally-friendly over the long term. How are shared mobility providers like MOIA approaching technology and what else are providers focusing on?
Robert Heinrich: Service providers have to develop top of the range user-friendly solutions that cover bookings and logistical issues at the same time as the user experience being seamless and giving no indication of the hard work going on behind-the-scenes. That requires providers attracting and developing people that have very advanced technical and digital skills. But, as you say, providers have to go further: they need to have teams that can offer financial advice, for instance. Providers are constantly looking for investment to take their new ideas to market, so investment advice and financial experience is always a top priority. At MOIA, one way in which we’ve approached this complicated landscape is by making the most of partnerships and finding ways to work with other organisations for mutually-beneficial gain. In the world of mobility and ride pooling in particular, co-operation is essential. Example partnerships could include working with landlords to install charging stations for electric vehicles and partnering with supermarkets and hospitals so that shared-use vehicles can drive up to the front door. Partnerships hold massive potential for ride pooling and shared mobility. Providers should keep one eye on building their own standout teams while keeping the other on opportunities for collaboration to ensure new mobility solutions can best serve as many people as possible.
This article is part of our ‘Reinventing the wheel: driving conversations’ series. You can read more conversations here.