Why shared mobility will disrupt the world
Something is terribly wrong with urban transportation. If you are close to a major transportation artery in your city, just take a look outside during commuting hours. Chances are, you will see something similar to the picture above. It is a picture that is becoming more and more prevalent in modern society — it illustrates the huge challenges we face with transportation, and the huge opportunities to disrupt the entire industry.
Up until now there has been largely one main mode of commuting — driving an individually owned car. In fact, in the United States 90% of people commute by car on a daily basis, while in Canada 79.6% commute by car. In comparison, public transit currently attracts 5.2% of commuters in the US and 12% in Canada.
So why do people commute to work in a car?
Here are three reasons, but there are a lot more out there:
1. Lots of offices and residential neighborhoods are only accessible by car, with extremely limited alternatives for convenient transportation. Driving commutes are typically twice as fast as transit commutes.
2. Parking is too cheap. Yes, I said it…. parking is too cheap. Just like everyone else, I am a sucker for free parking and willing to go to extreme lengths to get free or cheap parking. But we often forget that a free parking space represents a lot of hidden costs to taxpayers, city governments, the environment and, ultimately, our societies. Freakonomics has a good episode on this, talking to Donald Shoup from UCLA, the author of a 800-page book The High Cost of Free Parking.
3. There is a large sunk-cost bias in owning a car. Once you buy a car, there is a high likelihood that you will use it to commute, as it appears to be cheaper than other forms of transportation, which in reality is not entirely true. Owning and routinely using a car is often one of the most expensive forms of transportation.
So how do we solve the transportation challenges we are facing associated with our decades-long love affair with the automobile?
Here at Spare, we believe one of largest opportunities is shared mobility — the shared use of a vehicle, bicycle, or other mode. Shared mobility is an innovative transportation strategy that enables users to gain short-term access to transportation modes on an “as-needed” basis. And this goes hand-in-hand with the arrival of autonomous vehicles, which is another technology that promises to disrupt not only the automobile industry, but how we, as a society, go about our daily commutes.
The most obvious form of shared mobility is public transit — but it is not the largest form of shared mobility. According to US Census data, carpooling is currently the largest form of shared mobility, with 10.5% of people using this mode, while public transit is used by only 5.2% of people.
Here are just a few of the reasons why shared mobility is the future:
1. Cost of shared mobility is continuously decreasing compared to privately owned vehicles, making it more and more financially attractive.
2. Most people ride their 5-seater cars by themselves — 79.5% of Americans do this every day. Shared mobility solves a great deal of congestion by increasing the number of passengers in a car. Load Factor (see below) is key to fighting traffic jams! It will therefore be more and more encouraged by society and by policymakers.
3. Private car ownership is becoming less of a symbol of status and wealth, and less people (primarily in urban areas) are getting their driver’s license. But these people still have to commute!
4. Increased urbanization makes car ownership difficult and expensive.
Unfortunately, there is no silver bullet for “fixing” transportation. Solutions have to be tailored to the specific needs of different people, cities and cultures.
While transit is fantastic for some people, it might not be ideal for others. With new technology and business models being developed right now, shared mobility is looking to disrupt the mobility industry — together with autonomous, electric, and connected technology. There are incredible opportunities for new transportation modes that sit between private car ownership and public transit. The trick is to create locally optimized solutions for shared mobility. We have only seen the beginning — currently 4% of all miles travelled are shared, but in only 15 years this number will increase by over 500%.
