Special report: The evolution of
mobility services
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PuBlishED: FEBRuARY 2017
CoPYRighT sTATEMEnT
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Cover courtesy: Daimler
2
Special report: The evolution of mobility services
Table of contents
The (r)evolution of city mobility
New mobility concepts are one of the four most important trends with potential to disrupt the automotive
industry’s current business models, writes Dr. Wolfgang Bernhart, Senior Partner at Roland Berger
4
Evolution of mobility services reflects changing demand
New services have an important role to play in the future of mobility, says CAR, but they form only a part of
a wider, gradual mobility evolution
10
Moia is starting small, but VW has big ambitions for its mobility brand
Moia, Volkswagen Group’s 13th brand, is starting out with a single focus, but as CEO Ole Harms explains,
it hopes one day to democratise mobility and bring its services to the masses
13
geely’s ride-hailing brand aims to become king of electrified trips
Caocao is another example of how serious the Chinese OEM is about the shift from manufacturer to service
provider. Automotive World talks to Jack Liu, VP of Zhejiang Geely Holding Group and Head of Caocao
16
Mutual benefits: on-demand mobility keeps oEMs on trend
Car-sharing service car2go has not only grown to become the world’s largest, but now represents a key part
of Daimler’s strategy. Automotive World talks to its Chief Executive, Olivier Reppert
19
Automated mobility services require vehicle design rethink
Safety, maintenance, tech and comfort - just some of the factors the industry needs to consider for cars used
by automated mobility services. Automotive World talks to the American Center for Mobility (ACM) about the
need for a possible vehicle design rethink
22
interview: nat Parker, Chief Executive, moovel north America
Daimler was among the first OEMs to start offering shared mobility services. Automotive World talks to
Nat Parker about the challenges and opportunities of operating in the mobility services space
25
Vehicle interior designers prepare for car-sharing and ride-hailing
Mobility service users and vehicle owners will have very different expectations of their ride, and
suppliers are now exploring options
28
Car-pooling – an enriching social experience?
BlaBlaCar has risen to become the world’s largest car-pooling community, and is an example of how
trust is shaping today’s mobility market
31
splitting the difference: innovation essential for car-pool success
Michigan-based Splt is a car-pooling service that has eschewed a business-to-customer service in favour
of a close, business-to-business approach – and it’s paying off, says CEO Anya Babbitt
34
automotiveworld.com
3
Roland Berger
The (r)evolution of city mobility
New mobility concepts are one of the four most important trends with potential to disrupt the
automotive industry’s current business models, writes Dr. Wolfgang Bernhart, Senior Partner
at Roland Berger
A
ccording to figures published by Crunchbase and
PitchBook, new mobility business models have
attracted nearly US$30bn in equity investment since
2009.
Nearly 90% of this was invested in new ride-for-hire
services. Uber, Didi, MyTaxi are well known examples
of companies in this sector, as well as VIA and
UberPOOL for ride-pooling, where individuals share the
same vehicle for parts of their journey. The remaining
10% has mainly been invested in sharing concepts,
such as car-sharing (e.g. B2B services such as ZipCar
and ReachNow, or P2P services such as Drivy) or inride sharing services (e.g. BlaBlaCar).
In contrast, other business models providing an
alternative to individual car ownership, such as coownership or new mass transport systems, received
Fig. 1: MADE – the four trends that may disrupt current automotive business models
Geographic
shift
Mobility
solutions
Automated
driving
1. New Mobility
Low cost
brands
Changing customer behavior
(sharing vs. owning)
Urbanization changes
traditional mobility and logistics
concepts
New mobility mix and new
business models/
players
Strategy
How to position?
Emissions
regulations
Lightweighting
Technology and
regulatory progress
High customer value and
improved safety
Consequences for current cars,
small vehicles, LCVs
Aftersales/service
impact
Automotive
disruption
4. Electrified
Compliance with future
emissions regulations
Electrification
landscape incl. infrastructure
Profitability challenges
China as a benchmark
Fuel
cells
2. Autonomous
Powertrain
electrification
Alternative
fuels
ICE
advancement
3. Digitalized
Connectivity
AI
Evolution of digital
technologies and culture
Full integration of the
connected vehicle into
customers' everyday life
Non-traditional
entrants
Transformation
How to transform?
Start-up
OEMs
New
retail
Connectivity
Source: Roland Berger
4
Special report: The evolution of mobility services
Roland Berger
Low
Fig. 2: Mobility business models of innovative companies, schematic and selective
Information
provider
Agent
Asset-intensity
High
Service
provider
Vehicle
provider
infrastructure
provider
nearly no venture funding. Flixbus is one of the few
exceptions, providing a cheap, alternative long-range
travel solution.
In fact, new mobility concepts are seen as one of the
four most important trends with potential to disrupt the
automotive industry’s current business models, which
have not changed significantly since the introduction
of the Ford Model T roughly 100 years ago.
This article provides an overview of current business
models, and cites examples of the specific concepts
of selected platforms and providers for vehicle-sharing
and ride-for-hire services. It finishes with an overview
of recent activities in the race towards a fusion of new
mobility concepts in automated mobility and
transportation-as-a-service solutions.
New mobility business models vary significantly –
from asset-light models providing information, acting
as agents or platforms or aggregating offerings of
third parties (either individuals or companies), to
asset-heavy models, providing the vehicles needed,
or even the infrastructure.
automotiveworld.com
“
New mobility concepts are
seen as one of the four
most important trends with
potential to disrupt the
automotive
industry’s
current business models
If we take a closer look, these business models can be
further differentiated into vehicle-sharing business
models and ride-for-hire services (see business models
1 to 8 and 9/10 in Figure 3 and Figure 4 respectively)
according to vehicle ownership (agent or provider
model), payment schemes for the user and what other
mobility models are primarily substituted or targeted.
5
Roland Berger
Fig. 3: Classification of new mobility services i
B2C Roundtrip Car
1 sharing
B2C Free
floating Car
3 sharing
B2C One-Way
2 Car sharing
B2B Fleet
B2B Fleet
4 sharing (PC)
5 sharing (Vans)
Vehicles rented and returned Vehicles rented and dropped Vehicles rented and dropped Vehicles rented and returned to companie's location
to same location (stationoff in fixed different location off anywhere in a specified
(station-based)
based)
(point to point journey)
area
Vehicle
ownership
Provider
Provider or service company on behalf
Refueling/
Washing
Vehicle
positioning
Providers' station or public parking within
operation sub-area
Possible
trip types
Round trips
Substitute
Mainly replacing car
ownership and rental
Payment
One-way trips
Public parking within entire
operation sub-area
One-way and round trips
Mainly replacing public transportation
Standardized fees & usage calculated by time or km
Companie's private parking
Round trips
Mainly replacing fleet and off-fleet costs (e.g taxis)
Free for business trips
Predefined fees on week-ends
Source: Roland Berger
station-based car-sharing
Free-floating car-sharing
Station-based car-sharing evolved as an alternative to
car rental (1 – ‘B2C round-trip car-sharing’) and public
transportation (2 – ‘B2C one-way car-sharing’). Due to
a relatively weak value preposition for end customers,
its success so far has been much lower than
anticipated a couple of years ago, also due in part to
the introduction of free-floating car-sharing services.
While stationary services require users to bring back
the vehicle to a specific station, free-floating carsharing (see model ‘3’ in Fig. 3) allows users to park a
vehicle anywhere within the zone of operation. In
addition, users do not need to pay additional charges
or take care of refuelling. This is a much more
convenient type of service, and has been pioneered
“
While stationary services require users to bring back the vehicle
to a specific station, free-floating car-sharing (see model ‘3’ in
Fig. 3) allows users to park a vehicle anywhere within the zone
of operation
6
Special report: The evolution of mobility services
Roland Berger
by Daimler with car2go. Introduced in Germany in
October 2008, it was first tested exclusively by its
employees, but as of October 2016 it operates over
14,000 vehicles in eight countries and 30 cities
worldwide, with over 2 million customers. Other OEMs
such as BMW (DriveNow, ReachNow) followed with
similar concepts.
Studies show that customers accept a maximum
walking distance of 300-400 metres to pick up a car.
Therefore, depending on the density of the city and the
number of active users, a minimum of around four to six
vehicles is needed per square kilometer to ensure a
sufficient vehicle density and availability. This also limits
the maximum vehicle utilisation rate of between 30%
and 40% during the day, and calls for sophisticated IT
to anticipate vehicle demand and to deploy them within
the operating area accordingly.
Specialised service companies such as RideCell and
Vulog provide the necessary technology platforms for
booking, planning and fleet management, typically as
‘white label’ solutions. In addition, other specialists
take care of cleaning, refuelling and maintaining the
vehicles, allowing the providers to focus on marketing
and interaction with the cities.
B2B fleet sharing
B2B fleet sharing (for cars, model ‘4’, and for vans,
model ‘5’) is more a niche solution. However, because
of their number, they are an interesting market for
platform and service companies.
P2P car sharing
Peer-to-peer rental has seen huge success as an
alternative to hotels and traditional vacation rentals –
companies like Airbnb have become something of a
synonym for the practice. P2P car-sharing or carrental (model ‘6’, Fig. 4) applies this concept to cars
and vans as an alternative to commercial car rental.
In 2008, RelayRides was founded in Boston, and
became a pioneer of the service. Originally focusing
on short-term, hourly car rentals, the majority of its
growth was driven by longer duration rentals of one
day or more. In 2015, the company rebranded as Turo
to reflect its focus on long-term rentals. As a platform,
Fig. 4: Classification of new mobility services ii
P2P Car
6 Sharing
Renting private individuals'
own vehicles
P2P Urban
7 Ride Sharing
P2P Intercity
8 Ride Sharing
Sharing a ride in mid/long
Sharing a ride in short
distance travel, eventually on distance travels (intercity)
a daily basis (going to work)
B2C Ride
9 Hailing
Hailing a professional driver
from location with specific
app
Vehicle
ownership
Private individual (renter)
Refueling/
Washing
Customer (hirer)
Vehicle
positioning
Owner's parking space or
public parking near owner
Defined between driver and user through app
Mainly round trips
One-way trips
Possible
trip types
Substitute
Payment
Mainly replacing car rental
Fees specified by car
owners
automotiveworld.com
Private individual (driver)
Mainly replacing ownership
Professional
driver
Mainly replacing intercity
train and plane
Provider
Mainly replacing taxis
B2C Ride
10 Pooling
Sharing a ride in a city by
using a professional
company, free routes
Professional
driver
Provider
Mainly replacing public
transport
Standardized fees & usage calculated by time or km
7
Roland Berger
the rental price (which the company claims is, on
average, 35% lower than with commercial car-rental
companies) is set by the car owner, using Turo’s
dynamic pricing platform. Turo matches demand and
supply and covers vehicles with liability insurance,
charging 25% of the rental fee for its services. In
Europe, Drivy applies a similar business model, also
partnering with insurance companies to reduce the
risks for people renting out their cars or vans, as
JustRide has done in India since 2015.
P2P Intercity ride-sharing (model ‘8’, Fig. 4) websites are
commonly used for one-off long-distance journeys with
high fuel costs. BlaBlaCar is a well-known example in
Europe. A differentiating feature of this service is that
users define whether they want to be talkative or not –
and BlaBlaCar matches people with similar interests for
a longer trip.
Being a cheap alternative to public transport, P2P
Intercity ride sharing now faces strong competition from
privately operated long-distance buses.
P2P urban and intercity ride-sharing
Ride-sharing began life as car-pooling. Originally, it was
promoted in the US as a rationing tactic during World War
II, and became popular once again during the 1970s due
to the oil crisis and the energy crisis. Companies such
as Chrysler and 3M organised the first employee
vanpools at that time. Falling gas prices and other factors
saw its popularity decline heavily, until the rise of smart
phones. This has helped car-pooling to expand again as
ride-sharing, enabling people to offer and find rides
thanks to easy-to-use online transport marketplaces.
In contrast, P2P urban-ride sharing (model ‘7’, Fig. 4)
has proved less popular. Expansions were announced
recently after the acquisition of Israel’s map and
navigation community Waze by Google, which
launched the Waze Carpool pilot in the Bay Area in
2016 as an alternative to Uber’s B2C ride-hailing and
ride-pooling services. Riders and drivers share the cost
of fuel for the trip with a suggested rate that is set by
Waze in advance. Money is transferred from riders to
drivers automatically. Unlike Uber and Lyft, however,
Waze will not vet participating drivers (or riders);
Fig. 5: Activities of oEMs and new mobility players related to fully-automated
mobility services (January 2016 – January 2017, selected)
Established OEM supplier
11.03.2016 17.03.2016 07.04.2016 11.04.2016 26.06.2016 17.08.2016 23.08.2016
31.01.2017
GM acquires BMW presents Toyota opens
self-driving car autonomous third institute
startup Cruise driving as key forautoAutomation forpillar of i
nomous
USD 1 bn
NEXT strategy driving near
University of
Michigan
Daimler
announces
partnership
with Uber to
provide self
driving cars
Volvo will test BMW teams
100 automatedwith Intel and
vehicles in
MobilEye to
Chinese cities developautonomous
driving
technology
Ford acquires
machine
learning firm
SAIPS to
boost HAD till
2021
Delphi forms
alliance with
Mobileeye &
Intel to make
autonomous
driving
affordable
04.01.2016 21.03.2016 07.04.2016 07.04.2016 08.04.2016 29.04.2016 13.05.2016 01.08.2016 18.08.2016
GM invests
USD 500 m in
Lyft to secure
partner for
robotic taxis
Uber
interested in
acquiring
100,000
autonomous
cars for ride
sharing
Uber hires top Google is
Ford exec to expanding
help develop tests of selfself-driving
driving Lexus
cars
SUV to
Phoenix, AZ
Tesla Motors Google
develops next
- partners with
generation
Fiat Chrysler
autopilot with to use
team of
autonomous
chipmakers driving
technologies
Apple invests Uber sells
USD 1 bn in Chinese
Chinese ride
- operations to
sharing serviceDidi Chuxing
Didi Chuxing and becomes
shareholder
Uberacquires
self driving
truck start
-up
Otto for USD
680 m
New players
Source: Press research, Roland Berger
8
Special report: The evolution of mobility services
Roland Berger
“
In order to justify their high valuation, ride-hailing companies
are racing towards autonomous vehicles
instead, users rate each other. The Waze terms of
service clearly state that drivers and riders are
essentially on their own, liability-wise, and this may
become a safety issue in the future.
B2C ride-hailing and ride-pooling
B2C ride-hailing is by far the most important new
mobility service. It started with the founding of Uber (as
UberCab) in March 2009 and went live in July 2009, in
San Francisco. National expansion started in summer
2011 in New York, going international in November 2011
in Paris. Since then, the company has continuously tried
to develop new business models. In 2012, it went
beyond the original limousine services and launched
the first taxi rides in Chicago. Meanwhile, a broad
variety of services have been commercially launched
(incl. chauffeur services, goods and lunch/dinner
delivery etc.) or are being tested. In August 2014,
UberPool was announced. As a B2C ride-pooling
service (model ‘10’, Fig.4) it lets riders share rides
based on proximity.
The core technology is basically the platform with a
user-friendly
application
for
all
common
smartphones, and iPhones used by the drivers with
pre-installed Uber software to accept rides and to
communicate with Uber and the costumers. Uber
develops and manages all back-end software and
performs key data analytics such as critical user
demand. All software analysis is managed in-house.
Drivers are charged a commission for each ride they
get through the platform.
But the business model is not unique, and Uber faces
tough competition in various markets, mainly by the
‘G.O.L.D. Alliance’. Uber competitors GrabTaxi
(South-East Asia), Ola Cabs (India), Lyft (US), and
Didi Kuaidi (China) announced this global technology
and service alliance in December 2015. All of them
have Softbank as an investor and, with the exception
of Lyft, are market leaders in their respective regions
of focus.
automotiveworld.com
While ride-hailing mainly substitutes taxi services, as well
as to a certain extent short-time car rental (especially
from airports) and private ownership, ride-pooling
operated by providers such as Israeli-founded ‘Via’ in
New York or public transport provider Transdev’s
subsidiary Abel in Amsterdam have established
themselves as an attractive alternative to conventional
public transport. Instead of operating large buses on
fixed routes, Via picks up customers at street corners,
and small buses (vans) drive an optimised route to
minimise travel times of all customers. The driver is
guided through an app from stop to stop on a free route.
The importance of B2C ride-hailing compared to other
new mobility business model cannot only be seen in the
venture capital it has attracted, but also in the number
of users. While for example in China there are roughly
3.9 million car-sharing members, representing
approximately 1.2% of the 390 million license holders,
Didi alone has 14 million registered drivers, representing
7% of the overall Chinese car parc.
But finding drivers is also the limiting factor to the growth
of ride-hailing. In order to justify their high valuation, ridehailing companies are racing towards autonomous
vehicles. Consequently, Uber announced plans to launch
a test-service with self-driving cars in Pittsburgh,
Pennsylvania, in August 2016. The cars are modified
versions of the Volvo XC90 equipped with Uber’s selfdriving technology. Drivers act as back-up, as required
by law, but passengers do not have to pay for the ride.
This move is seen as the first step in Uber’s goal of
replacing its conventional fleet with autonomous vehicles.
While car manufacturers such as Daimler and Tesla have
recently announced plans to provide automated,
driverless cars to the Uber platform, there is still an
ongoing race between new mobility players and the
established OEMs towards a fusion of mobility services
in fully-automated mobility- and transportation-as-aservice- (MaaS and TaaS) solutions.
Who will win, remains to be seen.
9
CAR
Evolution of mobility
services reflects
changing demand
“
New services have an important role to play in the future of mobility, says CAR, but they form
only a part of a wider, gradual mobility evolution
E
volution, not revolution – that’s the conclusion of a
2016 report from the US-based Center for
Automotive Research (CAR), The Impact of New
Mobility Services on the Automotive Industry.
Change may appear to be all around us, but as CAR
Transportation Systems Analyst Adela Spulber
suggests, this change has by no means been sudden.
Car-sharing, she points out, arrived in the US in 2000
with ‘zipcar’, and some real-time ride-sharing services
arrived even earlier in the 1990s. Even ride-hailing, the
youngest of the bunch, is now a mature market; this
month, Uber will celebrate its eighth anniversary.
It is important, however, to not overstate their impact to
date. The growth of car-sharing and ride-hailing in builtup urban areas is undeniable, but to put it in context,
car-sharing service membership in the US now totals
around 1.8 million, in a population of over 324 million.
For now, private ownership remains the cost-effective
choice for most Americans, and this is not due to
change in the mid-term.
“The cost structure of new services is such that very
few people are able to use them for things such as their
work commute,” says Spulber. “If you look at how many
people use a car to commute to work in the US, it’s
more than 85%. This is a country dominated by lowdensity urban areas and suburban areas, where
commutes are getting longer.”
What will drive change is population growth within dense
urban areas. Spulber suggests that mobility services in
10
If you look at how many
people use a car to commute
to work in the US, it’s more
than 85%. This is a country
dominated by low-density
urban areas and suburban
areas, where commutes are
getting longer
the US are effectively tied to areas where public transit
is widely used. Services such as Lyft and Uber will
increasingly be used in combination with public
transport, and some authorities in the US are already
partnering with mobility service providers to offer first
and last mile solutions as an integrated offering. Growth
in cities is happening, and has been since 2009, but the
process is still slow. Furthermore, whilst populations in
markets such as China are moving directly into city
centre areas, the US is experiencing something different.
“In the US, increasing urbanisation really means
increasing suburbanisation,” says Richard Wallace,
Director at CAR Transportation Systems Analysis. “It’s
true there were brief spells of city centre growth right
Special report: The evolution of mobility services
CAR
“
The mobility sector is, to some degree, imitating the app world.
Apps are highly fragmented, and micro-sliced such that many
perform one, narrow thing, and I’m not surprised to see
mobility service companies growing within such a rich app
environment
after the recession, but now the US has reverted to a
historical pattern which sees growth in the suburbs. We
hear talk of millennials moving to Detroit, but the
population of the City of Detroit itself continues to drop.”
“
Thus, whilst demand for mobility services will rise,
suburbanisation means demand for private vehicles
will not drop. This gradual change is good news for
OEMs, who will be able to keep pace with
developments and adapt accordingly.
In the US, increasing
urbanisation really means
increasing suburbanisation
Right here, right now
form a multi-modal platform. Spulber predicts growth
for all in such use cases, but one area that could see
substantial growth is micro-transit – a mode which falls
between taxi and bus, with variable stops and routes
adjusted to demand.
“They have the greatest potential to transform mass
transit,” she explains. “There are already examples,
such as Bridj and Chariot, which provide a flexible
shuttle service, and this could be an interesting solution
for supplementing mass transit, perhaps as a first and
last mile solution. It also solves the question of
providing public transportation in areas with lower
densities, in more suburban neighbourhoods. It’s very
cost effective in these cases.”
Chariot, acquired by Ford in September 2016, operates
in the San Francisco bay area with 15 shuttles, and is
planning to expand to at least an additional five
markets over the next year. “I think Ford’s approach is
the most interesting,” says Spulber. “It’s multi-modal
and very diverse. The experiments they launched
around the world two years ago have identified
problems, and in turn they’ve come up with solutions
which haven’t necessarily focused on the vehicle first.”
Wallace agrees. “They’re testing every possible service
model across different locations – a global experiment
to see what works and where.”
Even in US city centre areas, however, private
ownership remains high. Part of the reason, says
Wallace, is the US market’s attitude to public transport,
which is less favourable than in Europe. “The disdain
for waiting is the number one predictive reason why
people won’t use transit,” he says. “Whether it’s 20
minutes at a bus stop or five minutes waiting for a lift, it
makes people’s skin crawl. When someone wants to go
somewhere, they want to go now. This will remain the
issue for some time.”
Finding a niche
New mobility services not only offer a replacement for
public transit, but an opportunity to enhance it, for
example by eliminating the inconvenience of a lengthy
walk to the nearest station. Combined, the two could
Also of interest, says Wallace, is the future potential for
hyper-specific mobility offerings, some of which are
already emerging. Detroit-based SPLT, for example, is
an app dedicated to commute-based car-pooling. A
automotiveworld.com
Elsewhere, Volkswagen’s new mobility brand, Moia, is
planning to roll out a ‘dynamic route’ shuttle service in
a major European city towards the end of 2017.
11
CAR
company can take on this service to create a database
of origins and destinations for its workers, and identify
pooling opportunities. Along with making life easier for
staff, this has benefits for the company – it lowers its
carbon footprint, helps expand its reach for talent, and
reduces worker fatigue.
“The mobility sector is, to some degree, imitating the
app world,” says Wallace. “Apps are highly
fragmented, and micro-sliced such that many perform
one, narrow thing, and I’m not surprised to see mobility
service companies growing within such a rich app
environment. They build their services around them,
and look to provide something different to what
anybody else is doing.”
Other examples include See Jane Go in Southern
California, a ride-hailing app exclusively for women
which addresses security issues for female passengers
concerned about getting into a male stranger’s car, and
for women drivers who want to work, but are
uncomfortable with letting male strangers into their car.
Then there’s GoKid, which enables neighbourhoods to
set up safe and effective car-pooling for getting
children to school. GoKid’s app compiles schedules
among a trusted groups of parents, and can quickly
revise them to allow for new drivers, optimise routes
and send out reminders.
That said, giants such as Uber, Lyft and zipcar
continue to dominate the mobility services markets,
and this in turn raises a potential concern for smaller
mobility providers. “It seems to me that if a big
company felt any threat whatsoever, they could
probably buy up a company, or even simply tweak
their own app to offer the exact same service – it’s just
another button on their app. Competing in this market
will become increasingly challenging.”
sculpting the city
Although change will be gradual, nothing can rule out
the possibility of sudden, revolutionary change in
future, says Wallace. The combination of sharing
services with full automation and electrification could
mean a rapid change in transportation preferences. It
could also impact on the very way cities are built.
“If you combine mobility as a service with automation,
the high value land in city centres becomes the last
place you would ever want to maintain parking
provision,” says Wallace. “Parking will probably start to
disappear. This could take decades, but the point is,
12
shared vehicles can move elsewhere once they’ve
dropped you off. They’ll always be looking for their next
ride – that’s the only way they’ll be able to stay
economically viable.”
Instead, pick-up and drop-off zones will become more
important than parking. These could take numerous
forms, but the objective would be to build them in a way
that does not influence the flow of traffic. These could
potentially take the place of parking spots.
“
If you want to be in that
business and you’re not
willing to throw in with
everybody else, customers
will never even know you’re
an option, and you’re going
to be forced to step up
“Urban planners view this as an opportunity to
transform mass transit stops, such as bus stops,”
says Spulber. “There could mobility hubs where you
can wait not only for a bus, but also a ride-hailing
vehicle, or car-pooling, or micro-transit. There will be
a multiplication of multi-modal mobility hubs, which
could feature boards where you see how many
minutes away you are from the different modes, and
what services are available.”
Ultimately, the CAR analysts conclude, the multimodal approach is where true change lies, and not
in the individual services themselves. For now, there
remain degrees of separation between the modes,
but Wallace is sure the signs are all pointing to a
unified offering. “Someday,” he suggests, “if you want
to be in that business and you’re not willing to throw
in with everybody else, customers will never even
know you’re an option, and you’re going to be forced
to step up.”
Special report: The evolution of mobility services
Moia
Moia is starting small, but
VW has big ambitions for
its mobility brand
“
Moia, Volkswagen Group’s 13th brand, is starting out with a single focus, but as CEO Ole Harms
explains, it hopes one day to democratise mobility and bring its services to the masses
T
he first offering from Moia, Volkswagen’s new
mobility brand, will be its own take on a microtransit
model, which in effect is a hybrid of the services one
might expect from a bus and a taxi. A fleet of electric
shuttles will drive what Ole Harms, Chief Executive at
Moia, refers to as ‘dynamic routes’. Users can either
jump on a shuttle at a pre-determined destination, or
hail the shuttle to divert from a standard route and pick
up the user at a specified location. Moia’s aim, says
Harms, is to combine the cost advantages of public
transit with the individual, end-to-end experience of a
private car or taxi.
This will offer potential users ways to overcome the
setbacks that come with public transport. “We are
talking about on-demand services that can be joined
in real time, or hailed in advance, so there’s real
flexibility,” says Harms. “We want to get rid of some of
the disadvantages of the public transport system, for
example the fixed routes or the strict time schedules.
Our shuttles can drive routes determined by specific
needs, such as where the demand is, and these can
obviously change throughout the day.”
But herein lies the challenge. Flexibility could
potentially lead to too many detours, says Harms. This
could be extremely off-putting for service users, who
may feel they’re being driven in the wrong direction.
Algorithm quality will be key to meeting this challenge,
says Harms – if users do not save time compared with
public transport, the service will fail.
automotiveworld.com
We want to get rid of some
of the disadvantages of the
public transport system, for
example the fixed routes or
the strict time schedules.
Our shuttles can drive
routes determined by
specific needs, such as
where the demand is, and
these can obviously change
throughout the day
These are early days for Moia, which began work in
earnest less than two months ago. The current
timescale suggests the service could go into
operation in one or two major European cities around
the end of 2017 or the start of 2018. “We want to
13
Moia
“
Our talks with the key decision makers in urban environments,
such as mayors, reveal that what they lack is space because of
too many private cars. The idea of freeing up some space, and
driving down congestion and noise in turn, is very appealing
develop the business model end-to-end,” says
Harms. “A community approach in testing will be very
important, so we can figure out how it works, what
needs to be adapted, and so on. Once ready, we will
scale up quickly, but we can only do this once we
have a reasonable feel for the business, and how it
operates.”
Power to the people?
The potential benefit for service users is clear, but like
many looking to the future of mobility, Moia has
greater ambitions for its shuttle service. “In the end,
we need to use public space more efficiently,” says
Harms. “Our talks with the key decision makers in
urban environments, such as mayors, reveal that
what they lack is space because of too many private
cars. The idea of freeing up some space, and driving
down congestion and noise in turn, is very
appealing.”
Bringing more people into a single car could help to
tackle all of these issues – currently the average
number of people in a private car per trip in the US is
1.5. But whilst Harms identifies pooling as an
important lever, another is needed to make an impact
specifically on congestion and noise, and for Moia,
this is the electric drivetrain. Electric vehicles (EVs),
he says, are clearly suitable for short, inner city trips
at low speeds.
Anything to boost the public profile of EVs is good
news for Volkswagen – the OEM has previously said
that by 2025, it hopes that one in every four vehicles
it sells will be fully electric. “We’re steepening the
learning curve for EVs,” says Harms. “If we can find
out how to operate this service with EV requirements,
such as charging, that can feed back into the group.”
14
Cities would expect no less than EVs, says Harms,
which as he points out are an available technology.
Understanding these expectations and working as
closely as possible with city officials will be imperative:
“We regard cities as partners, and our first discussions
with authorities have revealed they feel the same. They
have the data which we need in order to understand
“
We’re steepening the
learning curve for EVs. If
we can find out how to
operate this service with EV
requirements, such as
charging, that can feed
back into Volkswagen
the real issues, and we want to develop things together
for specific environments. Mobility is very city-specific.”
This data is what could help Moia make the difference
it wants to, and achieve what others have failed to.
Whilst ride-hailing has undoubtedly rocketed in
popularity over recent years, Harms suggests it has
done little yet to reduce private vehicle use in major
cities. He puts this down to the fact that ride-hailing and
car-sharing is beyond many people’s means.
There are two very opposite choices, he suggests:
“Expensive and flexible, or cheap and inflexible.
Without resources, you cannot afford certain types of
Special report: The evolution of mobility services
Moia
mobility, and so there’s clearly something missing here.
We want to draw on Volkswagen’s heritage. We believe
mobility is a basic need, and that many people should
have access to services which, when done right, are
just as flexible and individualised. We believe we can
achieve this sort of democratisation.”
one step at a time
This message of societal benefit is what seems to
preoccupy Harms the most, and the way forward to him
seems clear. “It’s common sense to assume that the
urban mobility of the future is shared, connected,
electric, and some day, autonomous,” he asserts.
“We’re totally convinced of this. And if you ask me
where I see this company in 2025, that’s a very long
way down the road, but our objective is to develop
Moia into one of the most successful operators of an
autonomous fleet.”
“
but the future will require partners. Tech companies, for
example, will play an increasingly important role in
mobility.
What kind of expertise gaps might need to be
plugged? “There are a couple of things. First, we might
need to improve the digital experience of our services.
Then, as we get bigger, we might need partners on the
operating side, for fleet management issues. We
already have one partnership with Gett, and this is a
part of our vision for the future. We see close
collaboration with a few selected partners, in certain
regions of the world.” Gett is a ride-hailing service
which some predict Moia could use to plug gaps in its
coverage, or in instances where a journey includes only
a single passenger.
Lofty ideals of smart city mobility and sustainability will
sound appealing to many, but whether they’re enough
It’s common sense to assume that the urban mobility of the
future is shared, connected, electric, and some day,
autonomous. We’re totally convinced of this… our objective is
to develop Moia into one of the most successful operators of
an autonomous fleet
Volkswagen’s support, including access to its
resources, technologies, engineers and platforms, will
doubtlessly help. “This is one of our key differentiators,”
says Harms. “We are fairly independent, as we are a
tech company, not a car manufacturer, but combining
these two correctly allows us to achieve something
that’s by no means easy, and that’s end-to-end control
of the service. The customer interface, the algorithms,
the back-end, the vehicle and its specific design – all
of this will come from one hand, and I think this will
prove key to our success.”
That said, co-operation will remain important to the
company as it scales up, and seeks to bring its vision
to cities worldwide. For now, Harms wants Moia to
develop its own full understanding of fleet operation,
automotiveworld.com
in the short term to get people to break with an
established routine and, in the case of avid public
transport users, possibly part with more money, is
another question. For now, the razor-sharp focus on the
shuttle service will help Moia and Volkswagen to
establish themselves in the on-demand mobility sector,
in Europe and beyond.
As Harms concludes, improving on private and public
transport requires intimate knowledge of the city, and
Moia’s knowledge will only increase over time: “What’s
important for us as company is urban life. We need to
be in a major city, and learn its defects, its challenges,
the things that go wrong each and every day across its
different transportation modes. Experience is
everything.”
15
Caocao
Geely’s ride-hailing brand
aims to become king of
electrified trips
“
Caocao is another example of how serious the Chinese OEM is about the shift from manufacturer
to service provider. Automotive World talks to Jack Liu, VP of Zhejiang Geely Holding Group and
Head of Caocao
C
hina has embraced new mobility services with the
same enthusiasm as the North American and
European markets, and competition within the different
segments is just as fierce.
China is home to players such as Didi Chuxing (Didi),
the world’s largest ride-sharing service which offers
ride-hailing and chauffer services. The company has
more than 300 million users across 400 cities, and in
2014 claims to have completed more than 1.4 billion
journeys. To put this in context, Uber, whose operations
in China Didi recently acquired, took six years between
2009 and 2015 to complete a billion journeys.
China holds some of the biggest growth potential for
services such as ride-hailing and car-sharing. Air
pollution, already intolerably high in some cities,
continues to increase, and gridlock remains a problem
in many population centres. Major cities in China,
including Beijing, have restrictions in place on licence
plates for vehicles, and are only available through
lotteries. Data shows that in June 2016, there were over
2.7 million applicants, whilst the total quota for the whole
year was 90,000. Drivers seen moving through
applicable districts without local license plates face fines.
One company that has been especially active in
embracing new mobility services is Geely. In October
2016, the company unveiled a new brand, Lynk & Co,
along with a new model, the 01 SUV. The vehicle will
be manufactured in China but sold in major export
markets, including the US. The brand is pushing easyto-use ride-sharing capabilities as a major feature, in
16
One of our main concerns
when running Caocao is
operational costs, which
naturally have a direct
impact on the operation’s
turnover. Our main costs
come from the vehicles, the
fuel consumption costs,
driver costs and promotion
costs. NEVs mean we can
reduce fuel costs to
extremely low levels
an effort to reach out to younger groups with little
interest in performance cars.
In China, one of Geely’s latest ventures into the new
mobility services space is Caocao, which began
operation in January 2016 in Geely’s HQ city of
Hangzhou. Research conducted in the city suggests
Special report: The evolution of mobility services
Caocao
“
China needs more time to accept NEVs. People may not
understand what an NEV is, and not want to purchase one.
Customers require training, and we need to nurture the market.
NEVs need a new business model
that 30% of car-owners would prefer mobility services
to using their own vehicles, due to parking difficulties
and congestion.
Since starting, Caocao has spread across six cities in
the country. “The Caocao app is a travelling platform
providing on-demand tailored taxi services,” says Jack
Liu, VP of Zhejiang Geely Holding Group, Head of the
Geely New Energy Automobile Sales Company, and
the Head of Caocao. “It is just one step along Geely’s
path in transforming itself from a traditional car
manufacturer into a service provider.” Mobility service
users, says Liu, are potential customers, and Caocao
is a way for Geely to show off the convenience and
comfort levels in its vehicles.
The manufacturer’s advantage
Liu acknowledges the competition is tough – Didi is a
force to be reckoned with, and local taxi providers are
still an option for China’s hundreds of millions of urban
residents. But as a manufacturer, he believes Geely has
some huge advantages. “This allows us to greatly
reduce cost, but we can also leverage Geely’s
expertise for better management of both the fleet, and
drivers,” he explains. Caocao could also benefit from
Geely’s existing infrastructure in China – the OEM has
over 325 dealerships across major Chinese cities,
including Volvo dealerships.
In addition, with Geely behind it, Caocao will be better
positioned to put cars on the road which respond to
market demand more quickly than its competitors. As Liu
points out, there have already been examples of this. At
one point, Geely was providing Caocao with models that
featured electronically-controlled driver’s seats, whilst
passenger seats were manually adjusted. Feedback
suggested this should be switched, and Caocao
believes it is in a much easier position to effect changes
like this than its rivals. This could prove especially useful
when it comes to improving connectivity technology in
ride-hailing fleets, resulting in smarter travel options.
automotiveworld.com
But there’s another big selling point about Caocao that
could prove very effective in the Chinese market.
Caocao’s fleet of 6,000 vehicles is completely made up
of new-energy vehicles (NEVs), including electric
vehicles (EVs). As Liu explains, the benefits of NEV
fleets in China are many.
“
We want to become the
number one provider of
NEV travelling services. We
believe NEVs will be a trend
in the future, and hope that
Chinese customers will
come to associate NEVs
with us
“One of our main concerns when running Caocao is
operational costs, which naturally have a direct impact
on the operation’s turnover,” he says. “Our main costs
come from the vehicles, the fuel consumption costs,
driver costs and promotion costs. NEVs mean we can
reduce fuel costs to extremely low levels. EVs can
eliminate that cost entirely, replacing it with charging
costs, and electricity costs are a third of standard fuel
consumption costs.”
Maintenance and replacement costs are also greatly
reduced, compared with gasoline and diesel models.
With the Chinese government as keen as ever on
electric vehicles (EVs), Caocao also benefits from
purchase subsidies. Along with incentives, there’s the
threat of future targets – by the year 2020, it is thought
17
Caocao
that light vehicles will need to be achieving a fuel
consumption rate of less than five litres per 100km.
Accordingly, Geely will increase production of EVs and
hybrids, but as Liu points out, “China needs more time
to accept NEVs. People may not understand what an
NEV is, and not want to purchase one. Customers
require training, and we need to nurture the market.
NEVs need a new business model.”
Caocao is useful here. “Our users are very happy to
accept a ride in an NEV,” says Liu. “They get to
understand the benefits. Not only do EVs produce zero
emissions, for example, but they also make very little
noise. It gets people attention, which is good for
promotion. Advocating our app requires considerable
investment from us, but use of NEVs means we have both
the government’s support, and the media’s attention.”
travelling services. We believe NEVs will be a trend in
the future, and hope that Chinese customers will come
to associate NEVs with us.”
Like many mobility-service providers, Caocao’s longterm vision is autonomous, and highly connected.
Caocao’s app is the only one of its type in China that
allows users to directly communicate with their driver
via the app, but in the future, users could talk to the car,
and vice-versa. This could solve numerous problems,
particularly for fleet of NEVs.
“
“For instance,” says Liu, “if you’re hailing an electric
car, the driver may realise he doesn’t have sufficient
range to reach you and your destination, and he tells
you to cancel the order. This will not happen with the
Caocao app. Cloud services can monitor variables
such as electricity, pressure and range of each car in
standing out
real time. This information will be readily available,
allowing us to deliver vehicles which meet the range
requirement.”
If you’re hailing an electric car, the driver may realise he doesn’t
have sufficient range to reach you and your destination, and he
tells you to cancel the order. This will not happen with the
Caocao app. Cloud services can monitor variables such as
electricity, pressure and range of each car in real time
Caocao is a relative latecomer to the ride-hailing
market, and this creates challenges when attempting
to win customers over. This requires product
differentiation. Already Caocao has said it will position
itself as a provider of more upmarket services than its
competitors. Liu also suggests that Caocao’s businessto-customer model also differentiates it from Uber’s,
which he identifies as customer-to-customer. Caocao’s
investment in its assets, such as paying drivers and
offering incentives, creates costs, but could also
ensure levels of quality.
This data also improves fleet management – drivers in
cars with under 25km of range remaining, or batteries
under 10% charge, will stop receiving orders and be
told to charge their cars. In addition, better connectivity
will give an insight into driver behaviours, such as
sharp braking and aggressive cornering. Owning this
data, Caocao could understand where its drivers are
encountering problems, and where the company might
need to educate its workforce.
However, there is no doubting the company’s optimism.
“The travelling services market in China is huge,” says
Liu, “and we expect to become the second largest
platform for these services in the cities we enter into,
in terms of weekly and monthly user volumes. We also
want to become the number one provider of NEV
Anything Caocao discovers can also be fed back to
Geely, and Liu does believes that needs and
expectations in the Chinese market do not differ
significantly from those in Europe or North America;
lessons learned in the Chinese ride-hailing space, he
suggests, could be applied worldwide.
18
Special report: The evolution of mobility services
Car2Go
Mutual benefits: On-demand
mobility keeps OEMs on trend
“
Car-sharing service car2go has not only grown to become the world’s largest, but now
represents a key part of Daimler’s strategy. Automotive World talks to its Chief Executive,
Olivier Reppert
S
ince first appearing in 2008, Daimler’s car2go has
gone from strength to strength. The car-sharing
service has evolved from a test-programme used
exclusively by Daimler employees into a market leader,
operating over 14,000 vehicles in 30 cities across three
continents worldwide. During 2016, the company’s
vehicles were rented over 22 million times, a 21% rise
compared with 2015 meaning that a car2go vehicle
was rented every 1.4 seconds.
“So far as the long-term strategic importance of carsharing goes, I think the numbers tell their own story,”
suggests Olivier Reppert, Chief Executive at car2go.
“Consequently, car2go is a cornerstone of Daimler’s
mobility eco-system, and car-sharing is one of the four
pillars we envision for future mobility, the others being
connectivity, autonomous driving and electrification.”
Indeed, the numbers suggest that the future looks
bright for the whole car-sharing sector. Figures from
Frost & Sullivan suggest the global market is set to
grow from 7.9 million members and 111,846 vehicles
in 2015 to 36.37 million members and 427,129 vehicles
by 2025. The megatrends sustaining this growth, says
Reppert, are clear – growing urbanisation, digitalisation
and the shifting priorities of younger generations, who
instead of owning a car would rather pay only for what
they use.
A two-way street
At this stage, nearly all OEMs have established their
own presence with the mobility services sector, but
Daimler was among the first. The backing of an OEM
automotiveworld.com
So far as the long-term
strategic importance of carsharing goes, I think the
numbers tell their own story.
Consequently, car2go is a
cornerstone of Daimler’s
mobility eco-system
gives it some advantages over services such as zipcar,
the most obvious being direct access to Daimler’s
technical knowhow and to well-known brands such as
smart and, more recently, Mercedes-Benz. But, says
Reppert, it’s important to recognise that the relationship
works both ways.
“Car2go has benefitted from Daimler in many ways, but
if you consider things the other way round, Daimler also
benefits from car2go,” he suggests. “22 million rentals
a year corresponds to 22 million ‘test drives’, giving all
kinds of interesting target groups the chance to
experience the smart and Mercedes-Benz brands.”
And users are not only being exposed to brands, but
potentially new types of vehicles; for example, options
19
Car2Go
“
Car2go has benefitted from Daimler in many ways, but if you
consider things the other way around, Daimler also benefits
from car2go. 22 million rentals a year corresponds to 22 million
‘test drives’, giving all kinds of interesting target groups the
chance to experience the smart and Mercedes-Benz brands
for users in cities such as Amsterdam, Stuttgart and
Madrid include electric vehicles. Reppert estimates
that on average, car2go’s electric vehicles are being
rented out an average of 10,000 times a day.
This could prove effective in further turning the tide of
public perception in favour of electric vehicles, and this
in turn could prove useful for Daimler, as its efforts to
electrify its models continue. A recently published letter
to smart dealerships in North America revealed that the
smart brand would be going all electric in the North
American market, with sales of gasoline models being
cut in September 2017.
“
“Car2go could play a decisive role in the breakthrough
of electro mobility in the private customer sector,”
suggests Reppert. “We’ve also developed technologies
which can be used for new, innovative services like smart
ready to drop.” Developed in co-operation with DHL,
Use of cars in existing cities
increased by 41% over
2016, and so we’ll continue
to follow this growth in
both new and existing
locations with new fleets,
offers and products
20
smart ready to drop allows delivery drivers to deliver
parcels directly to the trunk of smart vehicles through
one-time keyless access, as well as take return parcels.
Through developing and investing in car2go, Daimler
has gained considerable experience in digital access
and app development, making ideas like smart ready
to drop a possibility. To enable unlocking of the car, a
connectivity box similar to what car2go models use is
installed in the vehicle. OEMs will be keen to develop
similar convenience features that can further integrate
vehicles into hectic urban environments.
stepping out
In summer 2016, car2go introduced Mercedes-Benz
models to its range, including the CLA, GLA and BClass models. This follows trends from across mobility
service providers; Uber, for example, offers numerous
premium services worldwide, such as UberBLACK and
UberLUX. Cadillac announced an even bolder idea in
January 2017 with Book, a subscription service which,
through an app, allows users to have bespoke models
from the manufacturer delivered to a location of their
choice and left in their possession – a ‘white-glove
service’ for US$1,500 a month.
Car2go’s decision to add the Mercedes brand, says
Reppert, came as a result of customer demand, and
Mercedes models are currently available in Germany, the
US and Canada. Elsewhere, other options are emerging
– in Italy, for example, car2go is introducing the smart
forfour, a four-door version of the popular city car.
“The decision on how fleets are composed not only
varies from country to country, but from city to city, and
is a result of intense research and customer feedback,”
explains Reppert. This research has yielded some
Special report: The evolution of mobility services
Car2Go
interesting conclusions – in some cities, for example,
car2go predicts it will have more Mercedes models in
operation than it will smart cars. Of course, a premium
offering comes at a premium price, but in Reppert’s
opinion, the pricing is not so different that fleet makeups are determined by the amount of disposable
income. In Vancouver, for example, the hourly rate for a
Mercedes model is US$17, compared to the smart
fortwo’s US$13 rate.
“
“The smart cars will continue to outnumber our
Mercedes-Benz models in 26 of our locations
worldwide,” says Reppert, “but in some, it’s the other
for a successful free-floating system is to have
enough cars at spots with high demand at the right
time,” he explains. “Usually, the demand is high in
densely populated areas and major traffic junctions,
which you can find in big cities.”
Growth remains a priority for car2go as it looks to
expand its coverage further. The company will hope
to repeat its performance in 2016, which saw its
customer base rise 43% to 2.2 million.
For Reppert, one of the most interesting growth
markets is Asia, and in April 2016 the company
The smart cars will continue to outnumber our Mercedes-Benz
models in 26 of our locations worldwide, but in some, it’s the
other way around – the price per minute varies only slightly
between different models, and so the customer’s choice isn’t
primarily motivated by price, but by current needs and use-cases
way around – the price per minute varies only slightly
between different models, and so the customer’s
choice isn’t primarily motivated by price, but by
current needs and use-cases.” A fortwo may suffice
for a quick solo trip across town, whilst a leisurely
drive with friends at the start of a night out may call
for something a little flashier.
inner city pressure
The success of car2go in the car-sharing industry,
suggests Reppert, is down to its efforts in predicting
and responding to user needs. For today’s car-sharers,
flexibility in where a vehicle can be picked-up and left
is essential, as it helps in getting from A to B as quickly
as possible, and helps to deal with the urban
environment. The current model allows users to leave
cars in any public parking space within the service’s
zone of operation, along with exclusive spots in citycentre car-parks and airports.
“We paved the way for free-floating car-sharing in
many cities around the globe,” he says. The system
is complex, requiring careful analysis of user
behaviour and traffic patterns. “The main challenge
automotiveworld.com
began operations at its first Asian location in the city
of Chongqing, a Chinese metropolis of 30 million
people.
Moving to new locations requires careful planning.
“There are several factors to take on board when
looking
to
establish
yourself
somewhere
successfully,” says Reppert. These, he suggests,
include the size of a city, the number of inhabitants,
the city density and the local public transport. In May
2014, car2go withdrew from the cities of London and
Birmingham in the UK, citing the UK’s ‘Strong culture
and tradition of private vehicle ownership’. What
works for many does not always work for everyone.
But whilst new cities provide new chances, growth in
recent years suggests that even in existing markets,
plenty of opportunities exist. “Use of cars in existing
cities increased by 41% over 2016,” concludes
Reppert, “and so we’ll continue to follow this growth
in both new and existing locations with new fleets,
offers and products. The key challenges vary from
city to city, but the main target for all of our locations
remains a high customer ramp-up, which we measure
in registered customers and actual usage.”
21
American Center for Mobility (ACM)
Automated mobility services
require vehicle design rethink
“
Safety, maintenance, tech and comfort - just some of the factors the industry needs to consider
for cars used by automated mobility services. Automotive World talks to the American Center for
Mobility (ACM) about the need for a possible vehicle design rethink
T
here is little doubting the power of automotive
megatrends such as mobility services and
autonomous driving to provide societal benefit.
Combined, the two could reduce both congestion and
fatalities on the road. But before tomorrow’s services
can be rolled out, they will need to prove their roadworthiness, and this will require rigorous testing and
validation.
One group that could play a decisive role in this field is
the American Center for Mobility (ACM). The group –
headed by John Maddox, President and Chief Executive
– is currently constructing a purpose-built facility at the
Willow Run Manufacturing Complex in Michigan, a
former General Motors powertrain plant, and an aircraft
manufacturing facility prior to that. In January 2017, the
site was designated one of the country’s first proving
grounds for autonomous cars, selected by the US
Department of Transportation (USDOT).
Maddox is in no doubt that mobility-as-a-service will
increase significantly, both over the short and the long
term, and that this will go hand-in-hand with increased
automation. “We could see big changes over the next
two to three years,” Maddox suggests, “and could
potentially become fully evolved over a ten-year time
frame.”
But, he adds, no matter how far these changes go,
there will always be a need for a physical vehicle to
move people or goods. These vehicles will all require
validation in line with requirements, and with mobility
services being used by more and more customers,
new requirements could arise.
22
Every major OEM and Tier 1
working today has survived
only because they have been
able to hone a validation
process. Nobody accepts a
vehicle that doesn’t start
every morning, or doesn’t
drive straight
“Every major OEM and Tier 1 working today has
survived only because they have been able to hone a
validation process,” he says. “Nobody accepts a
vehicle that doesn’t start every morning, or doesn’t
drive straight, and there is no reason to believe that
future customers will expect any less in a hailed or
shared vehicle.”
Toughening up
From a physical point of view, OEMs might need to
heighten robustness in their vehicles. An automated
ride-hailing vehicle, for example, could be almost
Special report: The evolution of mobility services
American Center for Mobility (ACM)
“
The more people who become accustomed to these services,
the higher the expectations will be. This will be an opportunity
for some companies to differentiate the whole process. If I were
leading a ride-hailing service, I would invest considerable time
in figuring out how to precisely locate a person
continuously on the move in the search for
customers, in order to maximise profits. By contrast,
the average privately-owned vehicle spends around
95% of its lifetime parked.
“Increased use will definitely prompt a change in the
way that OEMs and suppliers trade off,” says
Maddox. “Right now, for example, OEMs will test their
vehicles to survive around 150,000 miles, over an
average life of ten years. But there are different tradeoffs that can be made between mileage and time. I
would definitely expect OEMs to quickly adapt higher
mileage targets for some vehicles, for example
around the 250,000 to 300,000 miles mark, but with
lower time-in-service target of perhaps eight years
instead of 15.”
“
OEMs, he adds, have mastered accelerated testing
of this nature, and adjustments could be made
quickly: “I think that’s where those in the traditional
automotive industry has a significant advantage –
they know how to do that already, whereas new
In order to achieve
commercial vehicle levels of
service in a passenger car,
monitoring capabilities will
need to be far more precise
automotiveworld.com
entrants, or those whose only focus is on the IT side
of mobility services, won’t have an existing
knowledge base.”
Beyond that, users of ride-hailing and car-sharing
services are not using their own vehicles, and
accordingly, some aspects of vehicle design could
take a back seat. Unlike when buying a vehicle, users
may not be particular about things like colour, look or
feel, but one factor that will remain important is
comfort. “You can well imagine that if a user is
sharing an automated vehicle en route to the office,”
suggests Maddox, “they will want a smooth ride with
good connectivity, heating and lighting, making it a
good place to work. Our facility will be built in such a
way that we can test all those different levels for a
service offering.”
Digital considerations
Beyond physical aspects however, Maddox suggests
that just as important will be the validation of front-end
services, and back-end IT systems. These will need to
be able to work at scale, says Maddox, and ACM
believes that additionally, unique forms of validation will
emerge, along with self-certification requirements. As
such, ACM is designing its facility to act as a proving
ground for both the physical and digital aspects of a
mobility service.
Overall, says Maddox, the quality on the digital side of
today’s ride-hailing services is good, but clear areas for
improvement remain. One well-known issue is the use
of GPS for locating users, drivers and locations. This is
particularly the case in dense, urban areas where the
technology can lack the precision required to pick out
a specific person, car or building.
23
American Center for Mobility (ACM)
“GPS location issues within cities will translate to the
front-end of a mobility service,” he says, “and the
more people who become accustomed to these
services, the higher the expectations will be. This will
be an opportunity for some companies to differentiate
the whole process. If I were leading a ride-hailing
service, I would invest considerable time in figuring
out how to precisely locate a person. In rural or
residential issues, GPS is clearly good enough, but in
urban areas a driver may end up at the wrong corner,
or fail to find you at all.”
“
Technologies such as predictive maintenance, in
which a truck can predict when it could experience
failure prior to a breakdown, could be incorporated.
More mobility services, more
autonomy
At the core of the ACM’s validation work will be safety.
Over the long-term, says Maddox, increased mobility
services will mean more automated cars on the road,
the potential safety benefits of which are already well
If, as suggested, vehicles wear out sooner and are used up in a
five to eight-year period, newer vehicles could get put on the
road even quicker… a quicker turnover of the total fleet could
translate to speedier deployment of new, life-saving technology
Along with improvements to existing requirements,
new digital requirements will emerge as mobility
services’ fleets grow. Factors such as exact vehicle
location, condition and status will become very
important for ride-hailing firms, who will want to know
which vehicles are on trips or picking up customers,
and which vehicles are waiting, re-fuelling, reaching
the end of a shift or out for repair. Remote vehicle
monitoring systems will require validation, to prove
they function like the company believes they will.
This particular digital requirement, says Maddox, is
closely related to the question of new physical
requirements of vehicles which will do more miles and
subsequently wear out faster. For a car to run 250,000
miles, an owner needs to be aware the minute a
warning light comes on, or an oil change is due, or
when a recall needs to be performed.
“Of course, many vehicles already have some of these
capabilities, and vehicles with high connectivity are
performing active monitoring,” says Maddox, “but in
order to achieve commercial vehicle levels of service
in a passenger car, monitoring capabilities will need
to be far more precise.” Mobility services might mean
sections of the light-vehicle sector adopting the
heavy-duty sector’s approach to asset maintenance.
24
established. The US National Highway Traffic Safety
Administration (NHTSA) estimates that 94% of
crashes in the US are the fault of human error. What’s
important, he adds, is that every safety benefit needs
to be validated. “If we’re going to rely on a safety
feature, we need to know it works,” he says.
Increasing mobility services could also bring another
benefit: “If, as suggested, vehicles wear out sooner
and are used up in a five to eight-year period, newer
vehicles could get put on the road even more quickly.
As safety technologies develop over time, they are
offered on new vehicles. And a quicker turnover of the
total fleet could translate to speedier deployment of
new, life-saving technology.”
However, he concludes, automated vehicles will bring
their own challenges. Recall procedures, for example,
will need to be analysed, particularly in the case of
mobility service fleets. “With most recall processes,
the federal government oversees the notification, but
doesn’t really force the owner or operator to update
the vehicle, even with matters of safety,” he says.
“Mobility services using level 4 autonomous vehicles,
which can operate without a driver, must check the
vehicles to ensure they’ve received any critical
updates.”
Special report: The evolution of mobility services
moovel
Interview: Nat Parker,
Chief Executive, moovel
North America
Daimler was among the first OEMs to start offering shared mobility services. Automotive
World talks to Nat Parker about the challenges and opportunities of operating in the mobility
services space
D
aimler’s moovel mobility brand began life in July
2012 as pilot project in Stuttgart. The flagship app
performs much the same function today – moovel is a
mobility platform which allows users to find, compare,
book and pay for the most appropriate way of getting
from A to B across a number of modes, including
public transportation, and Daimler’s own shared
services, which include car2go and MyTaxi.
“
Moovel arrived in North America in April 2016, following
the acquisition and merger of ride-sourcing company
RideScout and mobile-ticketing service GlobeSherpa.
When we prevailed upon
cities in 2013 to use mobile
tickets, they had no idea
what that meant. Today, we
have to race to keep up with
the demand of cities who
want an app to navigate their
system and pay for the ride
automotiveworld.com
According to Nat Parker, Chief Executive of moovel in
North America, part of the group’s role is to assist
Daimler as it transforms from traditional OEM into a
mobility services company. Growing urban
populations, and the resulting increase in congestion
and traffic management mean that people are
becoming increasingly comfortable with transportation
options other than outright ownership of a vehicle.
Technological advances also mean that new services
are easier than ever to use, and appearing thick and
fast. Over the long term, this switch from manufacturer
to provider will prove imperative.
Here, Automotive World talks to Parker about the
challenges and opportunities of operating in the
mobility services space.
Moovel
now
provides
more
than
transportation recommendations. What do
you think are some of your most important
offerings?
The flagship product now allows smartphone users to
find, compare, book and pay for the best solution for
them. What’s critical is that we connect journeys
involving public transportation – after single occupancy
vehicles, journeys involving public transportation make
up the bulk of how we move people in an urban core,
so we can help someone to find which bus or train to
take, offer them a mobile ticket purchase through our
app, and then once they’re off at their stop we can
connect them with a ride provider like car2go or
MyTaxi, for example.
25
moovel
“
We believe cities will remain a critical stakeholder in future
mobility, and moovel’s job is to be the most trusted partner and
provider of those services to enable a city’s vision
In addition to this, we have a suite of other important
products. One of the largest of these is moovel Transit,
in which we’ve emerged as one of the largest providers
of applications and solutions for public transportation
agencies across the world. We help people to navigate
a trip, and reduce the burden of needing to go to a
kiosk or to find change for a ticket. We’ve found that for
many customers, this isn’t just a nice-to-have – it’s a
must-have, and along with convenience for the end
user it’s also improving efficiency for the service
provider, i.e. the city or transportation district. We’re
saving them money in collecting fare revenue, and
providing Big Data intelligence on how their system is
being used.
Finally, there’s our platform RideTap, an aggregation
technology in which we acknowledge that although we
are Daimler, our value will be derived not just from our
own solutions but through giving people a choice. With
RideTap, we expose the user to different transportation
options including Lyft, zipcar, and bike share.
Your work must involve extensive work with
city authorities. What are the challenges you
face here?
Firstly, cities are risk-averse entities. They have a
mandate to manage finite taxpayer resources in a
responsible manner, and much of what we do is
disruptive to some of the traditional businesses that
they are familiar with. Helping them to understand that
investment in mobility solutions like ours can de-risk
their future operations is a challenge, but it’s one we’re
taking on quickly. When we prevailed upon cities in
2013 to use mobile tickets, they had no idea what that
meant. Today, we have to race to keep up with the
demand of cities who want an app to navigate their
system and pay for the ride. I have seen a marked shift
in the attitudes of public officials from being somewhat
hesitant to truly embracing moovel as a partner.
26
Another key challenge is that some cities look at this
as a ‘co-opetition’ type of engagement. Moovel can
bring in interesting and compelling solutions, such as
bringing rides to transit centres at the end of the line
where people struggle to make that last mile. Does that
portend to a future where we might cannibalise some
of their core business in public transportation? It’s a
dichotomy, and depends on the city, but some are very
concerned. They’re asking, what does this mean for
us?
If moovel is suddenly right at the heart of
keeping a city moving, does that put Daimler
in a position of much greater responsibility,
or liability?
Daimler is over 100 years old, with a history of
innovation, sustainability and success, so in terms of
risk management, I think we have the track record to
stand by. I think it’s important to note that we are not
simply moving in and saying we are the be-all and endall. Rather, we will be trusted partners in cities. We
believe cities will remain a critical stakeholder in future
mobility, and moovel’s job is to be the most trusted
partner and provider of those services to enable a city’s
vision.
Mobility services will remain tied to areas
with public transportation. What do you
predict for the future of public transportation?
There is no question of an uptick. Typically, in our core
markets in the US and Germany, we’re seeing a strong
compound annual growth rate in public transport use,
year over year. Worldwide, over 100 billion trips are
taken every year on public transport, and it’s growing
because no matter how fantastic a car you can offer,
nor how many lanes of traffic you can build, increasing
urban density remains the most efficient transporter of
masses of people.
Special report: The evolution of mobility services
moovel
We’re bullish on public transportation. The question is,
can we rely on that but then offer the solutions which
plug the gaps that we know are there, often the first and
last mile connections? Rather than drive myself to the
station, can I have moovel provide me a quick, easy
ride via carpool, or through renting a nearby vehicle?
More critically, can I rely on moovel to help me when
there’s an unexpected disruption to services? This
remains extremely common in public transport. So
there needs to be service alerts, traffic jam and
accident alerts and overcrowding alerts. One thing
we’ll do is point the user to the occupancy level of a
train. It might be that two minutes behind the crowded
train coming up is another that’s nearly empty – wait
two minutes and save yourself the hassle of being
crammed up against a neighbour. That situational
“
Facebook Messenger is just an example – you can also
do it through Slack, an enterprise collaboration tool.
We’re allowing people to use a moovel bot to check
when their next train is arriving, and so if like many I’m
using Slack on a day-to-day basis at work, I no longer
have to pull out my phone and fire up the app, or switch
apps.
Is it nerve-wracking for a giant in the
automotive industry, which is traditionally
very conservative, to approach a sector like
mobility, which is very disruptive?
I think moovel embodies the forward-thinking values
of Daimler, a company which recognises it simply
must embrace change. If we don’t, we risk the fate of
large suppliers who’ve come before us. Consider the
Worldwide, over 100 billion trips are taken every year taken on
public transport, and it’s growing because no matter how
fantastic a car you can offer, nor how many lanes of traffic you
can build, increasing urban density remains the most efficient
transporter of masses of people
intelligence will become a must-have for someone who
is already having a stressful day, and wants to get from
point A to point B with as little pain as possible.
Moovel recently added functionality for
Facebook Messenger. Some see a trend away
from apps and towards in-app chatbots – do
you see the same?
Apps continue to proliferate, and we continue to
invest in them. That said, we don’t see them as the
ultimate solution in providing services, and with the
rapid proliferation of artificial intelligence and natural
language processing, you’re seeing the Alexas and
the Siris of the world take on new roles. They are
fantastic interfaces, and it’s important for us to deliver
our services through multiple channels, including
chatbots.
automotiveworld.com
telecom business – Nokia used to enjoy a market
share of over 70%. Within the space of 12 years, that
was reduced to a single digit. It just didn’t it see it
coming. Then there are companies in the computing
space like Foxconn, who have a huge book of
business, but are essentially pigeonholed as a
supplier.
Daimler has enlisted the help of moovel to create new
technologies, and to endear it and its services to a
whole new swathe of customers for our business.
Millennials are an example – young people who may
not aspire to own an S-Class, but who are quite
comfortable and perhaps even enjoy using a smart
fortwo in our car2go business. These are important
customers for us in the future, and what’s required is
multiple approaches to help them meet the different
urban mobility challenges.
27
Yanfeng Automotive Interiors (YFAI)
Vehicle interior designers
prepare for car-sharing and
ride-hailing
“
Mobility service users and vehicle owners will have very different expectations of their ride, and
suppliers are now exploring options
C
ar-sharing is almost certainly guaranteed a role in
the future of mobility, but it’s important to recognise
how well-established it already is. Brands such as
Daimler’s car2go and BMW’s DriveNow are widely
recognised in markets such as Germany, whilst ZipCar
dominates the US market. Over time, these service
providers have matured, adding more model choices
and payment options.
As a result, says John Vincent, Principal Designer at
Yanfeng Automotive Interiors (YFAI), it’s important not
to make assumptions about car-sharing moving
forward. One example is its main target audience,
generally thought to be younger people between 20
and 34 years old. Some studies suggest that compared
with previous generations, younger groups have
neither the interest nor the purchasing power needed
to own a car. Millennials, suggests Vincent, have
different priorities, such as technology, and wavering
enthusiasm for car ownership may partly explain the
decision of most major OEMs to launch their own
mobility brands.
That said, research by YFAI suggests that in fact,
demand for car-sharing services is increasing across
all age ranges. What’s more, the ways people use carsharing are also developing. Vincent identifies four
types of user. One is perhaps the most typical example
– a driver in a big city who wants to spontaneously
jump in a car for a 15 to 20-minute trip from point A to
point B as quickly and easily as possible. Similar to this
group are ‘light functional’ users, who might take a
round trip to collect and carry large objects. This may
be applicable to people without cars, or people whose
own car is too small.
28
In some cases, companies
are already sending their
employees on business
trips where, for example,
they’ll travel by train from
Cologne to Munich, and
then pick up a car at the
station from a car-sharing
service for the last mile,
rather than drive for the
whole distance
Another group consists of those who have decided
against car ownership. Users in this group, says
Vincent, tend to be older, and each will have their own
reasons. Some will be acting on environmental or
sustainability concerns, whilst others will have
concluded that mobility services in their area cover all
their needs at a reasonable price. The growth of this
group may sound like a dream for car-sharing
companies, but for now the two biggest user groups are
the quick city user, and a fourth group – business users.
Special report: The evolution of mobility services
Yanfeng Automotive Interiors (YFAI)
“
If you’re using a car for only 15 to 20 minutes, do you really
need such a complex seat? These can be heavy, and require
adjustment. They might still prove necessary for drivers, but
for passengers, slim, fixed lightweight seats similar to those
used on buses or budget airlines could do the job
“Business users are interesting,” says Vincent, “and we
see growth here. Demand and expectations in this group
might even prove higher than with the big-city quick
users. In some cases, companies are already sending
their employees on business trips where, for example,
they’ll travel by train from Cologne to Munich, and then
pick up a car at the station from a car-sharing service
for the last mile, rather than drive for the whole distance”
This gives suppliers plenty to think about – car-sharing
will prove as much of a game-changer for them as it will
for OEMs and drivers. What’s needed now, says Vincent,
is a clear understanding of what people want from the
service, and research from YFAI to date suggests that
car-sharing users are not necessarily as interested in the
car as they are in the service – and critically, the cost.
no thrills?
“Higher on people’s priorities are things such as low
cost, and ease of accessibility,” says Vincent. “People
don’t want to open up their phones and look for a car,
only to find the closest option is still a tram-ride or a 20minute walk away. Free-floating schemes offer a big
advantage in this respect.”
It is only further down people’s wish-list when matters
turn to the car itself, and even then the focus is on
matters such as cleanliness and robustness: “This isn’t
so surprising, and designers and brands entering these
schemes need to understand that these vehicles should
help answer these priorities that end-users have around
seamless and comfortable service, as well as having a
cool-looking interior. You need both and can’t have one
without the other. In some ways vehicle design is
becoming a bigger story than just the product itself”
How, then, might an end-user’s pre-occupation with
cost influence interior design within vehicles? Over
the mid-term, vehicles used in service-run car-
automotiveworld.com
sharing schemes will be modified versions of
production models, but YFAI is already giving thought
to how a model specifically designed for car-sharing
might look.
First off, shared car interiors will need to be intuitive,
particularly in the case of services that charge for time
used as opposed to monthly costs. If a consumer is
paying by the minute, the last thing they’ll want to do is
spend ten minutes learning how to use the car and
setting up its functions. Controls will need to adapt to a
passenger. “Users want to be able to get in the car, be
recognised by the car, and have the seat, controls and
mirrors move into the correct position,” says Vincent.
Space for modular, plug-in features and multiple
seating modes (e.g. one that provides floor space for
larger items) also feature in YFAI’s concept.
Things like door pockets and glove compartments
could disappear, as quick users often hesitate to use
them for fear of forgetting personal items. “A see
through box may be more appropriate,” says Vincent.
Over the long-term, we could see increased
crossover between car-sharing and what we now
associate with public transport. This could mean cost
reductions for OEMs.
Vincent cites seating as an example. “If you’re using a
car for only 15 to 20 minutes,” he says, “do you really
need such a complex seat? These can be heavy, and
require adjustment. They might still prove necessary for
drivers, but for passengers, slim, fixed lightweight
seats similar to those used on buses or budget airlines
could do the job.”
getting the message across
Future car-sharing models will see increased interest
from service providers to bring branding inside the
vehicle. “At the moment, they use standard cars,”
29
Yanfeng Automotive Interiors (YFAI)
explains Vincent, “and branding is little more than a
logo stuck to the outside of the car. But they could do
more. For example, could it be flexible? Could we have
cars that aren’t fixed to one particular service? We
could perhaps see situations where a car starts its
week being run as a Flinkster car, for example, but
later in the week, it transforms into a DriveNow vehicle,
depending on the needs of the service providers at
that time.”
Possible options could include use of decorative
materials on door panels, or removable backlit door
covers. Smart screen surfaces could also provide
options, not just for branding but perhaps even for
advertising. The possibilities are many, but it also raises
another potential option – that of tiered pricing. Some
car-sharing services are already adopting this. Car2go,
for example, is offering members the option of driving
Mercedes CLA and GLA models, as an alternative to
smart models.
“
what people will expect in the cabin of a self-driving
car. Multiple seating modes allow front and rear-seat
passengers to face each other, and relax in a loungelike setting.
“Autonomous driving is clearly going to happen,” says
Vincent. “Once we reach level four and beyond, where
the car can truly drive itself, we could see car-sharing
merge with ride-hailing models.” The signs are already
there, with Uber and Volvo announcing an autonomous
vehicle development partnership. “These vehicles,
whether low-cost or premium versions, will be able to
pick you up from your location.” The merging between
the different types of service will be gradual, as
autonomous cars are rigorously put through their
paces, but Vincent seems convinced that this is the
direction in which the industry is heading.
In the meantime, this also means YFAI will be following
what’s required of ride-hailing users. In many ways,
If you’re using a car for only 15 to 20 minutes, do you really
need such a complex seat? These can be heavy, and require
adjustment. They might still prove necessary for drivers, but
for passengers, slim, fixed lightweight seats similar to those
used on buses or budget airlines could do the job
“At the budget end, you might have a service that
appeals to students with little money,” explains Vincent.
“The cost of the service is low and could be
supplemented with in-car advertising and services. For
many though, this would be the last thing they’d want
and so they’d opt for a higher level of service instead,
with a premium, calm and relaxing interior atmosphere
for a completely different end-user experience.”
says Vincent, the expectations are similar (storage is
important and people still do not want to lose their
items, for example), but there are some differences.
Importantly, the passenger or passengers will often sit
in the back, and so whilst vehicles are normally
designed from front-to-back, models optimised for ridehailing may choose to pay more attention to the rear of
the vehicle.
sit back and enjoy the ride
“People will also be looking for seamless connectivity
with their mobile phones, as well as charging
capability,” he says, concluding that these are
convenience features one would find at any airport or
coffee shop: “That’s just how people live these days,
and what sticks in people’s minds is what keeps them
coming back. The hospitality side of things will become
increasingly important.”
Over the long-term, Vincent predicts there will be
considerable interplay between mobility service trends
and increasing levels of vehicle automation on the
road. YFAI’s XiM interior concept, unveiled at the 2017
North American International Auto Show (NAIAS),
showed how seriously the company is considering
30
Special report: The evolution of mobility services
BlaBlaCar
Car-pooling – an enriching
social experience?
“
BlaBlaCar has risen to become the world’s largest car-pooling community, and is an example of
how trust is shaping today’s mobility market
T
he benefits of new mobility services are by and
large restricted to built-up urban environments. For
long-distance trips, private vehicles remain one of the
most viable options. One mobility company has built a
business around this – BlaBlaCar is a car-pooling
service where vehicle-owning users can input details
on trips they have planned, such as route and time, and
offer empty seats in their cars to other users. The
company suggests a price based on fuel costs and
vehicle-wear, which a driver can then adjust within a
50% range to account for variables such as vehicle
type. A passenger pays that price, along with
BlaBlaCar’s commission, and the driver is reimbursed.
The French company was founded in 2006. Since then,
it has expanded operations to 22 countries, including
India, and boasts over 40 million members worldwide.
On average, around 12 million members take
advantage of services every quarter. Verena Butt
d’Espous, Head of Corporate Communications at
BlaBlaCar, suggests that alongside its long-distance
use-cases, what sets BlaBlaCar apart from other
mobility offerings is its people-powered infrastructure.
“Our platform exists to connect people travelling in the
same direction, allowing them to share the cost of a
journey,” she says. “Our members are looking to
optimise idle assets – that is, empty seats. And I think
that’s what differentiates us from other mobility players.
Our users are only sharing the costs. The driver isn‘t
selling a service, nor responding to demand, because
he chooses where the car is going. He’s simply filling
up seats, and in doing so he’s making the trip cheaper,
as well as more pleasant.”
automotiveworld.com
We are not a transport
provider. We do not own
fleets – we are connecting
peers. What we provide is
convenience features such
as the app, as well as trust
tools, insurance, and
reliability. This is what
defines us a mobility service
This, she adds, also assists BlaBlaCar in navigating
legal issues. Because a driver is simply sharing cost,
much like they would with friends and family, BlaBlaCar
does not represent a challenge to professional
services. “We are not a transport provider,” she
continues. “We do not own fleets – we are connecting
peers. What we provide is convenience features such
as the app, as well as trust tools, insurance, and
reliability. And this is what defines us a mobility
service.”
31
BlaBlaCar
“
That’s what differentiates us from other mobility players. Our
users are only sharing the costs. The driver isn’t selling a
service, nor responding to demand, because he chooses where
the car is going. He’s simply filling up seats, and in doing so
he’s making the trip cheaper, as well as more pleasant
These trust tools are essential for BlaBlaCar in helping
potential users to do something which may ultimately
feel counter-intuitive, i.e. getting in a stranger’s car.
Along with verifying drivers, the company’s platform
offers users options to make the experience as
comfortable as possible. For example, women riders
can opt to ride exclusively with other women. The
company has also received much press for one
feature in particular, which allows visitors to set how
much conversation they’d be comfortable with, using
a scale from ‘Bla’ (minimal) to ‘BlaBlaBla’ (plentiful).
“
Cars, which cause pollution
and take up space in our
city
centres,
require
optimisation, and one way
to do this is to fill empty
seats, and whether these
cars are self-driving or not
doesn’t matter – the
rationale for sharing them
is the same
32
Attitudes towards trust, says Butt d’Espous, have
changed, and companies like BlaBlaCar are driving
this by creating strong mobility communities which
can identify with what the company is doing. “Once
a member feels part of something bigger, it opens up
considerable opportunities moving forward,” she
says. “These people are loyal, and for us that means
an immediate distribution channel. We are already in
discussion with OEMs about certain ideas,
particularly around the issue of insurance.”
Whilst these ideas remain at an exploratory stage,
technological developments within the connectivity
sphere will present opportunities for BlaBlaCar.
“Advances in technology linked to our app mean we
will have opportunities to make the user experience
as frictionless as possible,” she says, “and much of
our efforts over the short-term go into giving our
products a more natural feel. Users are demanding a
quicker, more convenient service than ever, and this
is where most innovation is happening across
mobility apps.”
Meanwhile, the company will also keep a close-eye
on automotive trends. In 2016, BlaBlaCar made its
first appearance at the Salon de l’Automobile in Paris.
A presence among members is important, says Butt
d’Espous, and now that the company is a part of the
light-vehicle eco-system, it is important that
BlaBlaCar monitor developments closely.
In this regard, many mobility services find their
biggest interest is in autonomous vehicles, but whilst
the subject is doubtlessly interesting, Butt d’Espous
says it will be important for BlaBlaCar to keep its
fundamental proposition in mind.
Special report: The evolution of mobility services
BlaBlaCar
“Over the long-term, the discussions around
developments in automotive technology, such as selfdriving cars, are of great interest,” she says, “but at
the end of the day, it does not affect what we have to
offer. Cars, which cause pollution and take up space
in our city centres, require optimisation, and one way
to do this is to fill empty seats, and whether these
cars are self-driving or not doesn’t matter – the
rationale for sharing them is the same.” Autonomous
driving may be exciting, but it will be improved
connectivity which helps.
Competition on the highway
BlaBlaCar might have found a niche offering in the
new mobility services sector, but it still faces
competition from any affordable long-distance
solution, including buses, budget airlines, and in
some markets, trains. Services like Megabus remain
a cheap, effective option for many when travelling
between cities, and some start-ups have become
“
particularly in places where public transport
infrastructure is lacking,” she says. “The majority of
our trips happen along routes where coverage is
poor.”
Compared with competitors, BlaBlaCar retains
obvious benefits, chief among them the convenience
of having a ride come to you. “Ideal car-pooling is a
completely different experience that allows for
bookings anytime, anywhere,” she says, “and with the
coverage and liquidity our platform has amassed, this
is a reality we’re approaching.”
In addition, she adds, the social dimension of carpooling shouldn’t be downplayed when considering
what really differentiates the service: “We think this is
one of the main reasons people come to us. Much of
our feedback suggests that users find the social
experience enriching, and we think these warm,
human experiences have created a loyalty and
attachment to our service.”
Much of our feedback suggests that users find the social
experience enriching, and we think these warm, human
experiences have created a loyalty and attachment to our service
involved in taking traditional models of mass transit
and using tech to innovate them further. One example
is Flixbus, which has achieved notable success in
Europe by connecting long-distance bus networks
across the continent, as well as other offerings such
as an e-ticketing system.
Butt d’Espous agrees that competition is tough,
particularly in recent years when the uptake in
connected mobility services has forced the hands of
public transport providers and other bodies to
innovate and start providing people with smarter
options.
That said, she also believes the demand for mobility
is such that there is room for several actors. “People
aspire to move more than ever, and in some areas,
this means we have a strong competitive advantage,
automotiveworld.com
Besides competition, what other challenges does
BlaBlaCar face moving forward? Butt d’Espous
suggests that whilst BlaBlaCar’s expansion clearly
demonstrates some success, the company is only
scratching the service of what it wants to achieve.
Around 80% of long-distance trips in Europe are done
by car, and the average occupancy rate hovers at 1.7
people per vehicle. Within the BlaBlaCar community,
this rises to 2.8, so considerable potential remains.
“We’re proud of what we’ve done, and we’re not
insensitive to the fact that our customers will expect
more value as time goes on,” she says in conclusion,
“but our challenge remains the same. We’ve already
reached those who were ready to make a change,
and now our prospects are those who haven’t been
convinced. Our goal is to effect behavioural change
on a large scale.”
33
Splt
Splitting the difference:
innovation essential for
car-pool success
“
Michigan-based Splt is a car-pooling service that has eschewed a business-to-customer service
in favour of a close, business-to-business approach – and it’s paying off, says CEO Anya Babbitt
I
mproved connectivity and access to app technology
has seen mobility services proliferate in recent years,
with many taking on relatively niche roles when
compared to industry giants such as Uber.
One particularly interesting offering to emerge is the
Michigan-based Splt, a tech-mobility company now
operating in both the US and Mexico which works
directly with groups such as corporations and
universities to create effective car-pooling systems for
employees, or students. By paying an annual license
fee, a company can gain access to Splt’s app, and
after that can also pay extra for custom feature
development.
it’s better to be B2B
As Chief Executive Anya Babbitt explains, Splt begins
with a thorough analysis of what she describes as a
client’s ‘mobility landscape,’ using an algorithm built inhouse. This uses anonymous data to track where
individuals in a company are travelling from, and where
to. This tells Splt which elements of the pre-existing
arrangement are working, and where Splt can add the
most value, which may be the first mile, the last mile,
or the entire commute.
The analysis may also produce an integrated
solution where Splt’s service is aligned with buses,
van-pools or even e-bikes. “It’s a flexible platform,”
says Babbitt, “which can really de-risk a customer’s
investment
into
additional
modalities
and
transportation options by helping them understand
34
Companies
here
are
working to reduce their
carbon footprint drastically,
to fall in line with commute
trip reduction laws. These
are active in six states, and
mandate that organisations
must find newer, cleaner
ways to transport employees
to work to reduce single
occupancy vehicles
how many people are travelling along a certain route,
and whether or not it makes sense to commission a
van-pool, or a bus, or Splt.”
Once a system is established, Splt works with
businesses to keep the employee-base educated and
energised. For example, says Babbitt, the group works
with senior management to create a custom rewards
Special report: The evolution of mobility services
Splt
“
There’s a graveyard of car-pooling companies out there, but
many of these were in the business-to-consumer world… for
us, partnering with corporations means that people will
continue to car-pool as we’re not taking a transaction fee from
the riders, or drivers. This model just doesn’t work
system for users, which might translate into reserved
parking spots, gas cards or a monthly cash bonus. In
Mexico, Splt is experimenting with a points system,
where for example users can earn extra points by driving
out of their way to fetch other users from fringe areas.
These points can then be redeemed with participating
groups, such as Starbucks, grocery chains and
cinemas. Such groups, says Babbitt, recognise the
value of a captive audience.
This continuous interaction with the business, and the
resultant two-way learning process, is at the core of
what makes an offering like Splt’s valuable, says
Babbitt: “We’re very much business-to-business, as
opposed to business-to-customer. We look at our
customers as partners, and engage with them on every
level, from senior to grassroots staff. Creating a better
commute for everyone involves much more than our
technology – it’s everything beyond our technology that
makes a campaign successful.”
“
Splt, she continues, is not the first of its kind. “There’s a
graveyard of car-pooling companies out there,” she
Creating a better commute
for everyone involves much
more than our technology –
it’s everything beyond our
technology that makes a
campaign successful
automotiveworld.com
says, “but many of these were in the business-toconsumer world. For us, partnering with corporations
means that people will continue to car-pool as we’re not
taking a transaction fee from the riders, or drivers. This
model just doesn’t work.”
Players such as UberPool and Lyft Line continue in their
efforts to make ground in the car-pooling market, but
Babbitt is convinced that Splt’s B2B approach will
mean the company’s proposition remains unique. She
points to a study released by the MIT Sensible City Lab,
which shows that without at least 100,000 people trying
to car-pool in the same city, it is extremely difficult to
guarantee matchability and run an effective service.
This is a challenge, even for Uber and Lyft, and
success depends on expertise within the area.
“Our relationship with our clients means we’re in a
position to change the behaviour of people who are
otherwise used to driving alone, and that’s what I mean
when I say it’s about more than just the technology,”
she says. “Companies such as Uber can’t just flick a
switch – they need the know-how, and we have this.”
What’s in it for them?
Why should a company invest in its workforce’s journey
to work? The commute, says Babbitt, is becoming more
and more a part of the work experience, and can affect
the condition in which a staff member shows up at their
desk, and their productivity throughout the day.
In some US states, however, there’s an even bigger
incentive: “Companies here are working to reduce their
carbon footprint drastically,” says Babbitt, “to fall in line
with Commute Trip Reduction (CTR) laws. These are
active in six states, and mandate that organisations
must find newer, cleaner ways to transport employees
to work to reduce single occupancy vehicles. There are
35
Splt
“
We’re very open to integration, and we believe partnerships will
define success. We want to create total mobility solutions for
people who are willing to leave their cars behind
companies in California, for example, which are fined
up to millions of dollars a year for not embracing
programmes like Splt.”
In addition, CO2 reduction and other green policies
will fall in line with company initiatives. This is
particularly the case for companies with a presence
abroad in nations where public transport links are
lacking, and commuting times can approach 90
minutes each way. Meanwhile, at home, many
workplaces are under pressure from workers to take
on greener policies and introduce greater benefits,
particularly in areas such as commuting. The millennial
workforce in particular, says Babbitt, is calling for ondemand mobility, which could help companies to
expand the areas from which they can search for
talent, and improve staff retention.
In short, says Babbitt, services like Splt’s are being
actively sought out. A large factor behind Splt’s launch
in Mexico was interest from Bosch. “What they love
about the service is that it’s agnostic,” says Babbitt.
“Everyone can benefit.” Splt was one of 12 companies
worldwide to attend Google’s Techstars event in 2015,
and following its pitch, Babbitt says the group was
immediately approached by Bosch Mexico, which was
actively looking for a commuting platform.
“What’s really interesting about Mexico is that it touches
on many value propositions,” she says. “First and
foremost, we want to improve safety and security,
taking people off public transport for example and into
safer modes such as co-worker vehicles. Then there’s
reducing congestion, improving sustainability, and also
the social impact of pairing people together in vehicles
and seeing how different departments can come
together to solve different problems.”
Congestion remains a huge problem in Mexico, and
certain approaches, such as banning specific licence
plates from the road at particular times of the year,
remain in effect. Babbitt believes this is not simply a
case of one company wanting to offer its employees an
36
easier ride to work, but part of a wider effort from all
nearby companies to understand their own mobility
landscape and to create smarter cities. More people in
fewer vehicles could eventually allow companies to
abolish costly bus operations, no longer needed with
car-pooling in effect.
Following success in Mexico, where Bosch employs
14,000 people, Splt is now preparing to expand
globally with the mega-supplier. Bosch currently
employs just under 400,000 people worldwide.
Branching out
Splt has also moved into a second vertical in
partnership with Lyft, namely non-emergency medical
transportation for the elderly and disabled, to move
patients between their homes and hospitals, dialysis
clinics and rehabilitation clinics. According to Splt, the
figures suggest that in 2016, 4.6 million people in the
US missed or needed to change medical appointments
due to unreliable transportation, or a complete lack
thereof.
Originally, Splt partnered with the ride-hailing company
to offer emergency rides home for anyone involved in
the car-pooling scheme whose ride home had
suddenly become unavailable, perhaps because it had
broken down.
By partnering with health centres, Babbitt argues that
the Splt-Lyft partnership will not only bring assurance
to patients, but also ease the stress on hospitals and
health centres by improving patient punctuality. The
company offers health bodies a dashboard, which can
be used to call on-demand rides for patients. Faster
response times, Splt suggests, can also be beneficial
for patient health, and slash readmission rates.
“We’re very open to integration,” says Babbitt in
conclusion, “and we believe partnerships will define
success. We want to create total mobility solutions for
people who are willing to leave their cars behind.”
Special report: The evolution of mobility services