02/12/2020 Technological advancements in the past decade have allowed us to shop, work and communicate more simply. So why should the mobility sector be any different? In fact, the sector is already undergoing a transformation to do just that, with the rise of ‘mobility as a service’ offering passengers smarter and simpler ways to get around.
‘Mobility as a service’ describes the ability of passengers to plan, book and pay for several forms of transport using a single service. It promises less stressful planning because a passenger only has to consult a single service (a smartphone application for example) to access multiple modes of transport to get from A to B. It also promises a smarter, greener mobility future because of the data than can be collected and shared with mobility providers and users alike.
To provide greater understanding on mobility as a service, we have created a series of articles dedicated to the topic, which is part of our Reinventing the wheel campaign. For a preview of each article in series 2, read below.
Petrol tanks to data banks
As the priorities of automotive consumers accelerate towards sustainability and mobility as a service, companies that want to be ‘future-ready’ will have to form strategic partnerships, make the best use of data, and be imaginative about how they can improve the overall experience.
Grégory Derouet, Global co-head of Automotive Sector, Mazars, explains: “The automotive industry is undergoing a major transformation in operations and mindset once again. It is moving from the ‘heavy footprint’ model of the twentieth century, characterised by mass produced, carbon-intensive manufacturing and asset ownership, to the ‘light footprint’ model of the twenty-first, characterised by personalised systems, shareable mobility technology, and more sustainable technologies.”
For this light footprint model to work, manufacturers must increasingly compete on their ability to capture and analyse data. For example, a car that uses voice tone recognition technology to gather data from subtle signals in a driver’s tone of voice, which may be able to provide useful information about customer preferences. Derouet adds, “Manufacturers already capture extensive types of data such as parking times, distance travelled, and on individual components within car. However, a large part of the value of the data comes in the ability to identify it, analyse it and tailor the next generation of cars accordingly.”
Learning to carshare
Data similarly underpins the increased uptake of carsharing – a mobility trend that has stalled because of Covid-19 but is set to fully restart in 2021. Carsharing is on the rise due to growth in smartphone usage, concern for sustainability and the uptake of electric vehicles. Some 43.7 million people are likely to have used a shared car worldwide in 2020, according to Statista, and that figure is expected to rise to 53.7 million by 2025. Global revenue in the sector has risen from $8.3 billion in 2017 to $9.6 billion in 2019 and is expected to hit $14 billion by 2025.
In the coming years, this is likely to alter how manufacturers and car rental companies operate, namely in pushing them to speed up their adoption of data and analytics capabilities. “Data from customer rating systems and keyless locking or unlocking via apps can be useful to analyse customer behaviour patterns and build lifetime value models,” says Abhijit Pal, Partner, Mazars. “It gives them access to real time insights on metrics relating to journey and parking times, distance travelled, speed, and more.”
Original equipment manufacturers (OEMs) can use this data to adapt their marketing activities, improve customer relationships and accelerate their research and development. It can, in other words, help OEMs work more like technology companies and play a crucial role in the growing mobility as a service ecosystem.
Bundling in the city
The widespread rollout of mobility a service depends, in part, on the sophisticated integration of transport services, or ‘bundling.’ One approach to bundling is to have a single interface that makes it easier to plan trips by offering data on multiple modes of transport in a joined-up way. Another involves mobility operators integrating many modes of transport and supplying them as a single service, which users can pay for using one account. Users might, for instance, have the option to purchase subscription plans that include a certain amount of time using each mode, such as public transport, bike sharing, carsharing, taxis, and so on, per month.
“I see great opportunities to shape the long overdue transformation of the industry towards meaningful ecologically sustainable mobility,” says Karsten Pech, Director, Mazars. Peter Cudlip, Partner, Mazars, agrees, referring to how the government in Israel “worked with companies to introduce on-demand transit, routed by an algorithm which identified the most efficient journeys for essential workers.” Data-driven initiatives, such as this, are a natural fit with bundling services.
Designing the blueprints for future cities
Data, evidently, holds the key to making mobility as a service a widespread reality. And the benefits of that evolution could shape a greener planet. Cities make an outsize contribution to greenhouse emissions and in the coming years urban mobility will have to play a greater role in reducing them.
One way for cities to reduce emissions, and travel times, is by adopting artificial intelligence: engineers at Carnegie Mellon University and Pittsburgh City Authority have developed an AI system to enable traffic signals to communicate with each other, which has reduced average travel time by up to 25%.
If city authorities can inspire technologists, entrepreneurs, campaigners, and citizens to contribute ideas and innovations, there is no reason why they cannot show how sustainable mobility can truly be. “Integrated multi-stakeholder collaborations like the Smarter Together project, supported by EU Horizon 2020, suggest that the right balance can be found between innovative technologies, citizen engagement and institutional governance to deliver smart and inclusive solutions,” says Michael Dessulemoustier-Bovekercke, Partner, Mazars.
Where mobility goes next: lessons from ride pooling
Ride pooling is another smart solution, which could reduce carbon emissions, while also making people’s commutes and lives easier. With smart technology and green credentials that rival established public transport, it offers a vision for the future of mobility. If it can meet its potential, ride pooling offers a number of advantages.
Ease and cost - ride pooling can be as easy to use as the carsharing services already established in many cities, and by having passengers share journeys, it can be a cheaper option than both individually owned cars and traditional car sharing.
Network efficiency – it could also make urban transport systems more efficient on aggregate; there is evidence that when used to complement other forms of urban transport, it improves the efficiency of the network as a whole.
Emissions reduction – And it could reduce emissions as it has the potential to enable the same number of journeys with fewer cars. It also has the potential for cars to be used more efficiently as privately-owned cars sit empty 95% of the time.
Yet it faces roadblocks like public sector buy-in and passenger preferences. Nevertheless, Olivier Guillot, Partner, Mazars is optimistic: “Many pragmatic partnerships between public and private actors are already on track. Whenever there’s a chance of a win-win agreement that optimises the transport experience and captures revenues, a deal is always possible.”
Adopting a mobility as a service mindset will require imagination to rethink fundamental assumptions about what a car might do, the data and analytics capabilities to validate those assumptions, and the ability to transform processes to deliver them effectively. To find out how all of that is coming to life, see series 2 of our Reinventing the wheel series here.