On-Demand Shuttles — a new Way of Sharing
The usual ride hailing and ride sharing concepts for instance BlaBlaCar are now outdated. Ride pooling is promoted as a new solution.
This on-demand model not only transports one person from A to B, but also picks up other people on the way. The journeys are bundled, so several people with similar routes can share a vehicle and an algorithm calculates the optimal route. The big difference to local public transport is the on-demand factor: the journey times and routes are based on user requests, created dynamically and not fixed. The aim of the providers is to supplement public transport and replace their own cars.
Shared Mobility is becoming more and more popular
An ever-decreasing number places value on the possession of an own vehicle. Only 15% of Generation Y still value car ownership, whereas 30% do not want to buy a car in the near future, according to a study by investment firm Goldman Sachs. Nevertheless, reliability and comfort are desired when it comes to means of transport, says McKinsey. And the DAT Report also confirms that the main reasons for a car are individual freedom and comfort. Other types of mobility have to keep up with these aspects, an on-demand shuttle service certainly does.
Ride hailing and ride sharing have been successful in recent years — almost 40% of 18–29 year-old US citizens use ride hailing services — according to a study by the UCDavis Institute of Transport.
Forecasts predict annual sales growth of 13.7% in the ride sharing sector over the next few years. Similar developments can therefore be expected in the sector-related ride pooling.
Hamburg, Berlin, Hannover, … — The ride pooling shuttles are already in operation
In Germany, there are already several companies that are testing the model. The technology company Door2Door, of which former Uber manager Kevin Novak is a board member, sells software for on-demand services to cities and transportation companies. The ADAC has joined forces with Door2Door to operate the allygator shuttle in Berlin. Since February 2018, 20 minibuses have been on the road here. However, the availability is rather limited, only every Friday night from 5 p.m. to 1 a.m. the buses run in the eastern part of the Berlin railway ring. The service is direct door-to-door for only 5 cents per kilometre and payment is possible via the app or in cash.
The VW subsidiary MOIA is an alternative which does not offer door-to-door service but stops at virtual stations. These should be no more than 250 meters away from the customer’s location. A special vehicle was designed for MOIA: fully electric VW buses with a range of 300 km, single seats, WLAN connection, reading lamp and USB ports for charging mobile phones. Tested since October 2017, MOIA is now in regular operation in Hanover. By mid-2020, the city had approved the service with 150 buses, subject to a condition. Possible negative consequences for local public transport are to be investigated. Only if none are measured, the permit can be extended. The test operation was initially carried out with petrol engines, but the fleets are to be gradually converted to electric vehicles. In April 2019 MOIA will be launched in Hamburg and they plan to provide 1,000 buses in the city over the next three years. In the future, the service will be more expensive than public transport, but cheaper than the usual taxi price. MOIA is pursuing an ambitious plan to replace private cars without harming public transport — and this on an international level.
“With our Ride-Pooling concept, we are ready since 2018 to take off internationally and achieve our goal of relieving the cities of Europe and the USA of one million vehicles by 2025,” says MOIA CEO Ole Harms.
Also in Berlin, Berliner Verkehrsbetriebe (BVG) cooperates with ViaVan, a joint venture founded in 2017 between Mercedes-Benz Vans and the New York technology startup Via. Together they have been realizing the two-year pilot project BerlKönig since spring 2018. As with MOIA, the journeys start and end at virtual stops, however these are mostly BVG stops. The BerlKönig started with 50 vehicles and wants to expand to 300 shuttles, whereof 80% are currently fully electric. At the beginning it was only driving on Friday and Saturday night between 5 p.m. and 5 a.m., meanwhile the BerlKönig has already reached its first aim and drives 24/7. The price of the BerlKönig also lies between the public transport price and the taxi fare. It consists of a basic price of 4€ and a surcharge of 1,50€ per kilometre. If the customer books directly for several persons, the additional passengers only have to pay half of the fare. Also ViaVan wants to spread their concept beyond Germany just like MOIA, Senior Manager Shared Mobility and Transportation of Mercedes-Benz Dirk Reimelt says:
“We are convinced that the service will quickly establish itself in Berlin and soon also in other cities. Together we have the opportunity to continuously develop our concept — environmentally friendly and sustainable mobility in combination with intelligent algorithms and modern vehicle technology — and to establish it in Europe.”
Other companies pursuing this business model are amongst others ioki from Deutsche Bahn, which has been testing its shuttle buses in Wittlich with a maximum fare of 3€ and in Hamburg with an integration into the HVV tariff, Daimler’s subsidiary myTaxi, which has been on the road with myTaxi Match in Hamburg and Berlin since the end of 2017, and CleverShuttle, which offers the ride pooling service with electric and hydrogen cars in Berlin, Hamburg, Leipzig, Munich, Stuttgart and soon also in Dresden and Frankfurt.
Resistance from the taxi industry
The taxi operators feel threatened by the shuttle services and their lower prices. They criticize that the new mobility providers, such as MOIA in Hanover and Hamburg, are engaged in “unfair competition” because they have only chosen the areas and times with the strongest demand. As a result of an exception based on the test operation, the on-demand services are not subject to the Passenger Transport Act and, moreover, they do not have to follow any tariff obligation, which allows them to determine the fare themselves. In the test phase without a license, it is even forbidden to make profit from high prices.
The taxi companies feel discriminated. The Hannoversche Taxivermittlungszentrale Hallo Taxi 3811 GmbH is therefore already examining a lawsuit against MOIA. The ride pooling providers, on the other hand, are of the opinion that they supplement local public transport and taxis and do not want to harm them, the aim is to reduce the number of private cars on the roads.
Legal bureaucracy slows down implementation
It is obvious that the legal framework is not yet adapted to such new concepts, both in regard to the disadvantage of taxis and in regard to difficulties for on-demand services. Bureaucratic and legal hurdles complicate market entry for shuttles. The providers have to negotiate individually with each city, have to conduct test operations first, can only drive with official exemptions and, unlike taxis, have to drive the vehicles back to the depot immediately after each journey without a direct follow-up order. Without new forms of regulation, including new concession rules, it will be difficult to integrate unconventional mobility models into existing public transport systems. Politicians have already made announcements to this and have laid down in the coalition agreement that the legal regulations and framework conditions should be modernized, and that Passenger Transport Act should be adapted to the new forms of mobility.
Are the On-Demand Shuttles the Solution to the Problems?
The increasing population and corresponding traffic have been increasing in cities for years. The consequences are congestion, pollution and a lack of parking spaces. Motorized private transport is considered the main cause of nitrogen dioxide, noise and land consumption in metropolitan areas.
70% of urban air pollution is caused by transport & in Hamburg drivers spend more than 50 hours a year looking for a parking space — MOIA
The proclaimed goal of the ride pooling providers is to replace private cars with shuttles in order to reduce traffic and emissions. However, opinions differ on the actual impact of the shuttle services.
One party takes the view that it benefits the environment and that public transport is actually supplemented. Studies by the Shared-Use Mobility Center (SUMC) show that ride sharing is increasingly used in off-peak times where public transport is less available, such as late evenings and weekends, thus confirming the thesis in some ways. In addition, a study by the car-sharing agency flinc, which replaces the entire motorized private transport in Hamburg with shuttle services, comes to the conclusion that 97% fewer cars would be on the road and 61% fewer kilometres would be driven. This would lead to a massive reduction in CO2 emissions and particulate matter. Investigations by BBG und Partner, a legal consulting firm specialized in public transport, show that 1,000 shuttles used in a city of one million would reduce the motorized private transport by around 4%. The studies by the International Transport Forum and MIT, which refer to New York City, go in the same direction. These say that 95% of journeys could be made by 2,000 10-man vehicles and 40% of the kilometres driven by taxis could be eliminated by pooling the taxis. These studies all argue for a reduction in traffic and emissions through on-demand shuttles.
However, these positive forecasts consider the ideal scenario that cars will be replaced, or pooling will be applied to existing taxis and will not operate in parallel with private cars or conventional taxis. Schaller Consulting, on the other hand, came up with results of negative effects. They found that 60% of users in urban areas would have travelled the distances covered by on-demand services — which includes not only shuttle but also car sharing etc. — by public transport, bicycle or on foot without this on-demand option. A study by the UCDavis Institute of Transport also confirms that, for example, less than 10% of users have given up their vehicle due to ride hailing.
In order to actually achieve a positive effect, it must therefore be ensured that the shuttles are a substitute for one’s own car and not for a bicycle, bus or train. Strategies have to be worked out accordingly. These could possibly be implemented with a pricing strategy or direct cooperation and connection with local public transport, as in the case of ioki and HVV or SSB Flex of the Stuttgart tramway.
