Why the future of multimodal mobility is ‘micro and active’
The article puts to context the micro mobility sector in the recent history of transportation and goes on to explain the value of micro and active mobility. It concludes with the author’s views on future of mobility and upcoming trends in the multimodal and micro mobility sectors.
The Urban Mobility sector is booming with innovation right now. Things today are transformed from what constituted the mobility sector in the early 2000s- i.e. some archaic transport companies, running buses, trams and metro rails, an odd jetty service etc. and even more archaic and tired taxi cab services for those who could afford them, completing the modal mix with personal vehicles. The choices were limited and people had little confidence to shun that personal car, even in cities where public transport was generously available.
The first real step towards multimodal networks:
Car hailing/sharing companies deserve all credit for bringing the first wave of excitement to the sector and establishing the tenets for sharing economy in mobility. The UBERisastion of cabs has made them more ‘accessible and available’ in most cases.
I like to illustrate sharing economy in mobility through the dual perspectives of:
1. Available: a shared vehicle is available when you need it, in places where you need it the most, and often in situations you will not find convenient to take your personal vehicle.
2. Accessible: Technology allows you to share the car that someone just left a few meters away, a few seconds back or a bicycle that has infinite number of discretely priced keys so that the whole city can access it for a nominal amount.
More importantly, the last mile gap was bridged with flexible and omnipresent options, all of them sharing the shared economy genes. Amazingly, the added optionality in the system is deeply correlated to, if not the cause of, millienials shunning car ownership!
However there has been a problem – you can’t take ‘a gun to a knife fight’, or in this case, a car to do a bicycle’s job.
While the car sharing/hailing model further evolved into pooled rides, and disparate attempts at on-demand buses — the citymapper bus, the Oxford experiment, Via and Chariot amongst others, and the thin line between pooled maxicabs (e.g. Uber Pool Express) and on-demand buses keeps getting thinner- they all are of no use in penetrating peak hour gridlocks, unreasonably long traffic diversions (often to counter those gridlocks in the first place) and the resulting state of haplessness that an individual faces while stuck in the confines of the car/maxi-cab/bus. A solution to this problem has to be more granular, solving for the problem where and as it happens.
Granularity- a term borrowed from urban geography that roughly connotes the level of detail — zoom/scale/ ‘grain’- is the way I like to explain the understanding and reach of transport modes. Greater the granularity, deeper the insights and opportunities for postively reinforcing ‘network effects’ .
The micro & active mobility revolution:
Active mobility — the author uses the term in the broader sense of ‘user controlled’ vehicles, and therefore it includes powered vehicles, electric or otherwise.
First came the bicycles, ‘docked bikesharing’ to be precise. The idea was good but lacked scalability because of the very ‘docks’ that tied its ‘degree of freedoms’ to service varying needs of mobility of people- where, when and in what numbers they wanted them. Docks were also expensive to erect, run and maintain, oftentimes costing nearly 10 times the cost of a bicycle that would go into such a dock. The fungibility of docked bicycle projects, hence, was always factoring for and depending on public funding and advertisement revenues. In some parts of the world, motorbike taxis (non-active micro mobility) are still prevalent but it sometimes takes longer to have a rider reach you than to traverse the last mile- the dependence on a rider adds a constraint to the instant gratification and control over one’s commute that a last mile commuter usually seeks. Active mobility which is readily available, is infinitely more desirable!
Then came the dockless revolution, lead by the likes of ofo and mobike that changed the shared bicycle footprint of the world from merely a million to 10s of millions of bicycles, serving nearly 100 million users a day in its peak. The benefits- free floating so you can pick and leave them anywhere, and there are hundereds, if not thousands of them in a square mile, in an ideal deployment. They become as finely distributed as the corners on every street, essentially converting the finest of the city grains into a mobility nodes.
But dockless bicycles weren’t enough and possibly not as exciting! What started with the veteran of docked bikeshare — Bixi- getting bankrupt in 2014, has followed with the shut down of dockless players like Bluegogo and Gobee, and scale down from the likes of oBike, Mobike and ofo in several key markets. However, almost at the same time, the electric scooter (or electric kicks, as they are called in Europe and many parts of the non-US world) startups — Bird and Lime(now a multimodal service with bikes, e-bikes and e-scooters) have gobbled up unicorn valuations within a year.
While I remain suspect of the value chain multipliers that have created an excitement around the venture capital valuation of e-scooter and e-bicycle companies, their fresher offerings are definitely a boost to the sector. They are indeed bringing more attention and younger users to their fold.
Value chain multiplier- the premise that a costlier and more attractive product can demand higher prices and margins at the end of the value chain-i.e. the consumer
The sector is continiously evolving and expanding, and there will be winners and losers in this game while micro and active/e-assisted mobility options continue to be the constant trend.
The network effect: why is it a win-win-win?
Last month, I was having a very interesting partnership discussion with the CEO of a major cab based ride hailing company. My understanding of the problem being that their service was concentrated in and between major job centres and transport hubs, and his ability to convert such rides constrained by the peak hour gridlocks that are typical of such locations, globally. This often meant a very low turnaround on the rides and unually long waiting times for those customers on the rides and those waiting for their ride to arrive. My solution, therefore, to have bicycle integration on the platform was instantly accepted, both from the perspective of bicycle sharing feeding into their system and their customers taking to the last/initial and diffcult mile on a bicycle, if congestion constraint was imminent.
Talking from a value perspective, a truly multimodal and truly granular system like public transport+cabs+bicycles is the most judicious use of available resources. It saves time and money for the end users, brings more rides to the public transit /regional trasit system and most importantly, helps cab hailing platfoms reduce their turnover time while improving their number of rides per cab- with incremental fares being highest for the first mile or km on such cabs.
Demonstrably, it is a win-win-win: savings in time and money for end users, more money for cab hailing services, and more possibilites for the network to keep personal cars at bay, instead expanding the overall transport network, especially in cities with traditionally low public transport penetration.
What is in store for the future?- the emerging mega-trends :
- More modes, faster disruption:
As the disruptor dockless bicycles have become disrupted by a new wave of e-scooters and e-bicycles, it is abundantly clear that the focus on the sector will continue and newer solutions will be tried, sometimes in conjugation and sometimes at the cost of others. Keep your eyes peeled on what the manufactuers like Segway are up to- this is a supply driven game, right now!
2. New intgrations and new value propositions (MaaS 2.0)
As Mobility-as-a-Service keeps evolving, we often see the evolution from a simple link to full integration of services and their payment option.
The next wave, to me, is about real time intutive and active insights (releavnt and instant push notifications for my product manager friends) that will tell you, for example that it is best to abandon a Bus stuck in gridlock and take that e-scooter instead.
On the payments part, dynamic enough systems that can factor for surge pricing at the network level, in real-time and bring to use unutilised assets (e.g. a bicycle lying unutilised at the corner can be put on a ride for an attractive price when fares on all alternates are surging).
Overall it is a progression from seamless integration to what makes sense, at what moment and how it can be creatively priced to maximize win-wins.
3. Intermodal 2.0 will be well beyond bicycles on buses and metro
As the diversity of modes increase, so will the possibilites for intermodal compatibility. Even today, the conveniece of carrying your own bicyle on public transport is helping many with the certainity of micro transit availability, especitally at the terminal ends of transport networks. We have already seen prototypes of cars with a neat integration of a motorbike, and cars being the dock for a life size drone — the possibilities are endless.
4. More capital and bets on the multimodal game:
As investors increasingly see transport networks as an interconnected value creation platform, more capital is expected to flow and more hedging plays may result, even in cannibalising segments (e.g. Uber’s strategic investment in Lime and acquisiton of Jump).
As MaaS evolves and allows financial engineering on top, a further flow of money and financial products is expected. My bet is on something as simple as monthly use plans, with the addition of a cheaper plan with select service level and brands (e.g. how you can specify your cellphone data, calling plans and roaming)
As these bets mature, a consolidation and pruning cycle may also result, based on portfolio considerations of the big betters in the game.
5. Micro-mobility going asset light- and it is a great thing!:
As we keep seeing companies fail in an otherwise low-cost asset space, there are constant doubts about scalablity of a company owned fleet in operation.
What I strongly believe is that the sector can benefit from a sophisticated asset offseting strategy that may involve reflecting true cost of use and depriciation to users and part-owners respectively-more on that in my next article.
And here it is: https://medium.com/@MobileRajarshi/how-to-build-asset-light-shared-mobility-hint-blockchain-6f22a979b75
“He said one man’s trash is another man’s gold
If it’s thrown away it’s free to take
A little oil, she’ll be good to go
So I rode that bicycle home”
Songwriters: Dean Brody / Jason Barry; Another Man’s Gold lyrics © Ole Media Management Lp
About the author:
Rajarshi is strategy professional with expertise and experience in urban development, energy, transport/mobility, public policy, business strategy, new business development and business management.
He has had leadership roles in the largest bicycle sharing platform of the world— ofo and with a pioneer in MaaS- TRAFI. He has previously been a business strategy, smart city and international development consultant, serving a range of donor organisations, local and national governments and large private sector clients. He has recently moved to Amsterdam and is available for consulting and full-time roles.
