How Shared Mobility Pays Off

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Carsharing, Shared Mobility


Why does shared mobility pay off? When determining the success of shared mobility, you have to consider how shared mobility complements existing transportation networks like public transit and rail. With more options, it makes less sense to own your own car, reducing your overall transportation costs.

This article was written by Alexander Kirn, CEO of INVERS, and Alexander Eitner, Founder and COO of Miles Mobility. This is a translation of the original article that appeared in Next Mobility News.

shared mobility results

Fewer cars, less CO2 and better cities – in theory, shared mobility is a good idea. But again and again, doubts about the various business models are raised, as well as the impact and actual traffic relief from these shared modes. Is it just a hype? If it isn’t, under what conditions can shared mobility deliver the added value it promises?

If you look at the statistics of shared mobility services in Germany and internationally, one thing stands out: strong growth. According to a PwC study from last year, the market for mobility-as-a-service in USA, Europe, and China will reach a volume of 1.4 trillion US dollars by 2030. By then, millennials would account for more than 50 percent of the world’s population – and this group expects mobility to be personalized, seamlessly integrated, multi-modal, and on-demand.

A McKinsey study from 2019 comes to similar conclusions and sees mobility-as-a-service as the future of urban mobility. In 2017, 2.6 percent of total revenue in the mobility industry emerged through disruptive business models and technologies, and the consulting firm estimates that this share will grow to at least 31 percent by 2030. Despite these predictions, there continues to be concerns raised that question the actual benefits of shared mobility – that carsharing isn’t profitable, only works in metropolitan areas, and results in more cars filling the cities; that e-scooters and bikes would “litter” the cityscape and not contribute to making people quit using their own car. Are these sentiments true? It’s a question that is best answered with “yes and no”.

In fact, free floating carsharing, the mode where a provider’s fleet operates freely within the city with vehicles rented and parked anywhere in the operating area, is currently only available in larger metropolitan areas. It requires a certain population density to run the service without operating in the red. It is also true that free floating services have not yet significantly reduced the amount of cars in cities. Then there are the unresolved problems with bike sharing and kick scooters that were recently launched in Germany.

However, it is incorrect to say that shared mobility, as a whole, doesn’t make sense based on these factors – shared mobility is more than the sum of its parts. If we look at the individual shared mobility services, from bike, car, kick scooter, and moped sharing to ride pooling and automated car rental, it’s true that by itself, these solutions cannot completely solve all existing mobility problems. But that’s not what they’re meant to achieve.

In order for shared mobility to work, it requires an integrated approach that links the different shared modes with public transit systems, and is aligned with consumers’ need for a simple, straightforward, and user-friendly solution. Operators should work closely with politicians to identify partnership opportunities to enable shared mobility access throughout the city. Cities are responsible for establishing clear and sensible regulations so both the operator and city can benefit.

Operators are then responsible for providing high-quality mobility services. This means, for example, user apps working flawlessly, vehicles always being easy to rent and unlock, and more importantly, being available where demand is high and mobility is much needed. If the user experiences technical problems at these touch points, the user will lose trust in this particular service provider, while being cautious of other shared mobility services as well. In order to ensure a flawless user experience, it is key for service providers build their operations on a high-performance technology to run in the background.

With this approach, more users will realize that in many cases, it simply does not make sense to have your own car, because the right mobility service is only a few steps and clicks away – leading services like free floating carsharing to be more profitable. If you want to go shopping and it’s raining, take the closest free floating car. If you need to visit your grandparents across town, station-based carsharing is a good option. If you take the train to work but your connecting bus isn’t in service, take the nearest shared kick scooter or bike.

This leads us to what we are already seeing today, which is a movement towards the “mixed fleet”, a fleet of vehicles that offers various modes within one service. For example, a service provider would combine different types of vehicles – from e-bikes and kick scooters to mopeds and 3-wheelers, cars and shuttles. As a result, it will become key for shared mobility providers to offer more options within their service to be a comprehensive, mobility service. As operators increase their value proposition to users, we don’t expect any one app to emerge as the all-in-one, go-to app. Instead, operators will continue growing their own market share with further service features and developments.

Mobility operators around the world have understood that without a holistic approach and comprehensive strategy, there won’t be much customer growth. To better guarantee user adoption of shared mobility services, operators need to rely on a powerful technological solution when setting up their services – one that is fast, open, scalable, and modular. This gives them the freedom they need to adapt their services to customer needs at any time – without any technical restrictions.

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