Finding a Path to the New Mobility
At Pathfinder, we are beginning a series of talks on how the future is shaped in several industries. The first one on Mobility was held on September 26th. Mobility is a hot subject : the automotive industry, transports and infrastructures are now evolving on a big brand new value chain under the Digital Age.
The next one, about Real Estate, will take place on November 21st and will gather top handpicked players from the industry (corporates and startups).
Here is what we learned during Path to mobility and our vision on how to create the future mobility leaders.
At our first event, we decrypted the advent of the mobility era before challenging participants to phosphore on new business solutions to be launched by existing players. On stage Nicolas Colin exchanged with Grégoire Olivier from PSA (car manufacturers, dominating the space nearly forever and now facing new trends affecting people’s mobility habits), Louis-Arthur Jacquier from Lime (the e-scooter behemoth, representing the new entrants rapidly expanding, thanks to technology, data, and important funding) and Nick Black from Cloudmade (operating system embedded in the cars, as one of the softwares eating up the industry).
Mobility : the land of theory, where everything would be possible …
The mobility value chain is firmly attached to the territories upstream and the end users downstream. It is an industry in which there has long been a huge gap between what everybody assumed was possible in theory and what effectively existed in practice.
Territories is a good example of that. Nicolas Colin explained how the issue of opening data from local government authorities to provide city inhabitants with innovative solutions has been in discussion for 10 to 15 years, without any progress at implementing actual solution. We had to wait for large tech companies to build the appropriate infrastructure and educating the users on the idea that data could make their mobility experience more seamless. Google maps for example, with the exhaustivity of its mapping of all territories has become a critical infrastructure. Thanks to GPS, data and user generated content (even more since the purchase of Waze in 2013), Google maps offer a precise real-time mapping of the world like never before in history. This effort comes with a price. And this price, for Google, is the ability to target ads directly to the users. The world is totally mapped, but it’s totally monitored and marketable too.
Today’s mobility is fueled by this use of data, both by the info at the disposal of general users and commuters for a more efficient mobility but also by the trail they are leaving that is used by advertisers. That’s basically Google’s strategy and the whole rationale behind its whole mobility play.
On the other hand, other players have other incentives, like Apple’s which is to sell products that are going to be the best assistants to daily life or Tesla, to sell cars that are not only electric but maybe more importantly “digital natives”, whose value is mainly derived from the data ever-updating its operating system, making the transition, as put by Benedict Evans from Andreessen Horowitz, “from complex cars with simple software to simple cars with complex software”.
This use of data and the involvement of tech companies in it is critical in the evolution of the mobility value chain, requiring all players to reconsider their place in it and to move up or down the chain to grab value that is slipping from them. Newcomers, as exemplified by Lime and all its on-demand mobility competitors, were born thanks to data and converted to data means of transportation that have been around for ages.
Lime before data
While incumbents are playing catch up in this data race, they are all, through investment and internal innovation, trying to expand on the value chain. For example, through its more than 3M connected cars, PSA is able to gather and distribute provide anonymised data that is infusing the whole organization, from product development to spare parts supply chain.
The radical innovations take off : multimodality
More and more, and particularly inside cities, the traditional mobility model has totally changed, not only by data and tech but in the structure of it. For people entering adulthood right now, driving, let alone owning a car is out of their mind. And those who do possess cars are fed up with it.
While the world of mobility has long been focused on things (cars, public transportation infrastructure), it is now focused on the user, as a part of its daily life.
As said by Grégoire Olivier, 50% of car owners want to get rid of it and are fed up with the hassles of having to maintain it, to pay it and to pay the parking even when they don’t use it. Mobility is now inexorably going on-demand.
Lime’s stratospheric growth (they were founded in June 2017 and already raised 467m$), is the exact translation of the users’ change of focus from owning their modes of mobility to using it, exactly when and where they want it. And thanks to data, this use is being monitored and oriented in order to adapt to these uses. While initially focusing on bikes, Lime realized early on that users were way more attracted to e-scooters and that this product was way more profitable for the startup. Thus, the business model was totally switched to that segment.
A main remark, was that while the current urban mobility revolution is exactly that, urban. And while it is greatly affecting the lives of millions, 50% of the world population, especially in western countries, is still relying on its car on a weekly basis, in suburban and rural areas where new mobility services are not well suited.
The market has not yet addressed those millions of users, apart from some ridesharing solutions offering new collective transportation means. So, it’s critical, as highlighted by Nick Black from CloudMade, to imagine a future of car transportation suited to those needs.
Not exactly the interface Citymapper, Uber and others are developing, but you get the idea.
Also, the main challenge of this big mobility shift is the necessity for all these different mobility solutions have to find ways to work together, to ensure a seamless experience for the users, even if they use cars, scooters or public transportation in the same trip. While users want to benefit from an unlimited number of mobility solutions, they want to be able to choose easily, to mix those means and to find it all at the same place. Major players in the space, coming from ride-hailing (Uber) or from mapping (Citymapper) are nowadays trying to find this “interface to rule them all”. Uber’s new strategy to become the self-proclaimed “Amazon of mobility” is such an effort to unify all mobilities through an interface to end users. Nick Black, notably emphasized how new solutions are integrating several modes of transportations and creating new services (the ability to have your luggage delivered to your vacation spot.
A space wide open for startups, where the absence of incumbents is striking
As it is witnessing transformation, the mobility space is more than ever, open to broad startups initiatives. As most of the value is now displaced to software and data and incumbents are being challenged and weakened, numerous non capital intensive niches are open to startups, enabling decisive innovations to take place.
Incumbents could also benefit from this rise of innovations. Their brands, the trust users have in them and their high technical know-how are very strong assets that can be leveraged by new startup players to rewrite this new map of mobility. Their good relationships with regulators is also a major asset : they could be the real game changers.
The second part of Path to Mobility was dedicated to this work on leveraging those assets. How can mobility players, mostly incumbents, leverage some of their assets to ignite new businesses and to be part of this mobility revolution ?
For example, a team among participants imagined how a tech giant would be able to mobilize its assets and its skills to travel along the mobility value chain and conquer more and more value. In this case, the group from the audience working on it tried to imagine how this hyper connected player would be able to make the actual roads his own : by implementing truly connected roads, both for energy and data use, for the new era of autonomous cars and highly connected vehicles. And by helping the State and cities get rid of the costs.
So, how do we help that at Pathfinder ?
From this masterclass and workshop, we asserted one of our big convictions at Pathfinder, that all players, particularly incumbents, should broaden their views and embrace the digital transition by taking a look at other value chains and learning from the disruptive practices of corporates and startups.
Our motto at Pathfinder is to realign interests of entrepreneurs and big corps. Our clients ? Big corps. Our mission ? Create their new businesses to rule the digital transition of their value chain. In the startup mode. With entrepreneurs 🤟🏻
Stay tuned for our next episode November 21st at 6pm at The Family, in Paris, where we will focus on the future of real estate. With industry leaders and startups from the real estate world, we will break down the real estate value chain and understand how trends such as coliving, the use of data for predictive maintenance, eco-construction and others are affecting it and shaping the future of real estate.
