Ride-hailing: The Great Disrupter — Thinking Highways, February 2019

Startup Alto has launched a ridehailing service that uses a private fleet, professional drivers, and that allows users to select the “vibe” they want for their vehicles — music, lighting, even scent. The company believes the big ridehailing businesses are missing a tranche of users, especially women, who want a safer, cleaner, more bespoke experience. The company’s message to its customers is, “you drive us.”

BMW introduced ReachNow Ride in Seattle, a professional (its own vehicles, with professional drivers) service to complement its ReachNow care sharing service. “Ride is a great option for those times when you don’t want to drive yourself, like going to the airport, or when you need a safe alternative after a night out,” Laura Gonia, a representative from ReachNow, said.

“The ridehailing industry is booming, and while it is marked with well-recognized brands, it is also ripe for disruption by savvy tech brands that have seen the gap in vehicle efficiency and rider experience and safety, and can fill that with innovative new services,” said Roger Lanctot, Director of Automotive Connected Mobility at Strategy Analytics, at Alto’s launch.

“While the incumbents have captured at most about two percent of vehicle miles traveled in the US,” Lanctot said, “newer services entering the field are poised to capture and capitalize on the customer experience and improved vehicle management, something that riders and cities continue to demand.”

Working with Cities, Not Against Them

Where today’s ridehailing services work independently of transit operators, public transit utilization has decreased, as it has across the board in the US (down 2.9 percent in 2017). A University of California Davis study of ridehailing usage found that 49–61 percent of passengers used the service in place of public transit, corroborating Schaller’s findings that 60 percent of ridehailers use the service in place of public transit or other non-auto mode of travel. A subsequent study of 1,000 ridehailing users in Boston found that 42 percent of the users used the services in place of public transit.

Professional ridehailing services that work with cities will coordinate with public transit to smoothly deliver the first-mile/last-mile services that make longer-haul transit options like buses, trains, and ferries more convenient than driving. This is another area where cities will be able to make overall mobility more convenient by working with accountable service providers to manage the vehicle distribution scheduling.

Issues are the Same for Autonomous and Driven

While many predict that the wide-scale adoption of electric autonomous transit will make the problems created by peer-to-peer ridehailing services disappear, it’s not likely because some of the challenges are the same. If multiple robotaxi or autonomous shuttle businesses enter the same markets and target the same high-demand areas and routes, congestion will remain.

What is likely to happen is that cities will transition to professional ridehailing services to similarly managed autonomous alternatives, with some measure of control over how many robotaxi or shuttle services will be allowed and where they will provide services. A transition period of hybrid autonomous and driven fleets will also need to be accommodated.

Various predictions have been made about the impact of new mobility services on cities. Some say there will be chaos in the streets, while others present visions far fewer vehicles in cities, cleaner air and more open space on land that was previously dedicated to an auto-centric infrastructure. While many stakeholders in the mobility industry promote the latter scenario, how fast and how smoothly that future arrives will depend on how well services are managed and distributed. Achieving the vision of full vehicles and sparsely used streets, and the improved quality of life promised by this vision, will require city-wide mobility management with cooperative, accountable partners.

Anne Mellano is Co-Founder and VP of Operations EMEA at Bestmile.

Originally published at http://magazine.h3bconnected.com.