The Hard Thing About Mobility Services

The technology of the future is useless without a robust network of humans to make it work.

Courtesy: Matthais Ripp

The challenges with new mobility options

The last several years have seen a proliferation of new mobility services. Both established transportation titans and new tech startups are inventing new ways to get people from point A to point B. These offerings vary in scope, price and experience. Some examples:

  • Chariot (solving the work commute)
  • Maven (a local, connected car when you need it)
  • Porsche Passport (when the trip calls for a sports car, on demand)

With Morgan Stanley estimating that by 2030, more than a quarter of all miles driven in North America will be from mobility services, all of these new offerings have an interest in taking a share of this fast-growing new industry.

But they also have an inherent problem that needs to be solved at scale. The leaders of these new mobility services will tell you that managing a highly distributed and highly utilized fleet of vehicles is difficult. From maintenance and servicing to shuttling and decision-making, fleet operations has become immensely complex task. Washing, detailing, fueling, charging, repairing and maintaining vehicles that are spread across an urban area and in constant use by many different consumers poses a serious business challenge, where downtime equals lost profits.

Any issues that prevent a vehicle from working at its maximum ability can mean an unhappy user. If a consumer is trying a new mobility service for the first time and arrives at the car to find a dirty interior or a broken air conditioner, they are unlikely to use the service again. If a vehicle is scheduled for the day with multiple consumers, but gets a flat tire, then that vehicle is out of service for several hours and the revenue lost. And these challenges multiply as the size of the fleet of vehicles increases. Managing 10 vehicles may be simple enough. But managing 100 vehicles is inherently complicated and managing 1,000 is exponentially more so. As these new mobility services scale, this will be a key challenge to growth.

How to meet this challenge

Most new mobility providers, as well as the press, are focused on the consumer experience. How does the app look and feel, what’s the cost per trip, how can drivers and riders rate each other. These are important issues for end users. But the work that goes on behind the scenes — the technology, vendors and operations that allow the vehicle to run and get where it needs to be, are just as important.

In order to thrive in a world of distributed and highly utilized vehicle fleets, mobility services need technology that can intelligently organize and apply the various operational components that keep a fleet up and running. Everything from service vendors to maintenance crews need to be dispatched and managed with precision, ideally from a single platform.

As the number of vehicles being utilized as mobility services grow, spreadsheets, emails and manual processes will fail. Mobility service providers need robust software to collect diverse data sets, optimize backend logistics and ultimately deliver high vehicle uptime. For any given car, mobility service providers will need to collect and store vehicle data such as mileage, tire pressure and fuel levels and cost data such as car wash costs and repair costs. But collecting this data is not enough. The data needs to inform smart actions in real time.

Of course, mobility services are not a “software only” industry, just as it is not just about physical automobiles. Mobility service providers know that rubber hits the road in the field, not in a database. Even with robust and predictive technology, vehicles need real gas, water, soap, washer fluid and tires on an ongoing basis. How do you ensure 10 cars get washed, another 10 get additional fuel and 3 more have a tire repaired when the vehicles are spread across a city? And, more importantly, how do you accomplish all that quickly, with as little friction as possible and cost effectively?

The answer is having a stalwart network of vendors that can help ensure the maintenance and repair of the vehicles. To maintain an urban fleet of vehicles, a mobility service provider may need to work with 10 or more vendors. To make the network work seamlessly, these vendors should be connected to the actual operation — receiving service requests, accepting orders, completing work and providing data back to the platform in real time.

Mobility service providers will rely on established operators in local markets to manage their vehicles. With modern technology and a robust vendor network, local teams can make decisions on a day-to-day basis that maximize uptime and control vehicle maintenance and repair costs. At STRATIM, we’re fortunate to work every day with some of the best operators in the world.

What the future holds

The breathless media coverage of self-driving cars and A.I. belies the fact that there are many real-world hurdles before autonomous vehicles powered by electricity swarm the streets of our cities. In the long run a successful mobility offering needs to intelligently handle the maintenance, repair and uptime of its vehicles — services that will still be rendered by actual humans in the field.

Margins for mobility service providers are likely to be akin to service companies. Controlling service company margins requires vendor management and high vehicle uptime to drive profit and free cash flow. The airline industry is an example of a sector that already functions this way, where the difference between a good year and a terrible year is all in the maintenance, fuel and uptime of aircraft fleets.

The best way to thrive in the future is to develop these skills sets today. If you are passionate about mobility or are at work in this industry, STRATIM wants to talk to you.