On Demand Mobility –
When do cities start to see the threat in the opportunity?
For years, On Demand Mobility and Ride-Hailing services have been hyped as the solution for many of the common urban mobility problems. The formula is simple: shared and on-demand usage of transportation means will significantly decrease the total number of vehicles needed and thus destress the congested urban infrastructure. Quickly, urban planners started to envision scenarios of seamless journeys in connected, personalized, yet shared vehicles without traffic jams and minimal environmental and societal impact.
In reality, however, metropolitan areas need to be cautious that this blessing does not turn into a curse. Recently, a commentary on the BBC Business Daily podcast [1] postulated that the new ‘shareconomy’ is neither sharing nor economic – and in some regards he might be right.
Let’s consider the booming segment of bike sharing, where companies (unfortunately often with increasingly shaky funding) put out fleets of bikes around a city and grant easy and often cheap access via an app to registered users. With several companies doing the same thing in the same city, the public streets quickly turn into a battleground for a fierce war over users and market shares. This war seems to have more losers than winners:
1 The public streets are cluttered with poorly maintained and broken bikes – in some extreme cases firms just leave their bikes behind since public space is free. This signifies an extremely inefficient usage of urban space – one of the most valuable resources in densely populated areas.
2 Customers (both actual and potential) are left with several providers of the same service. In daily usage this might well mean checking multiple apps for the nearest bike and maintaining multiple accounts. Customers would be better off with one integrated, well maintained fleet.
Let’s now imagine that these bikes would be cars…
How would our urban street and parking network look like? Most likely, we would observe a complete collapse of the metropolitan street-based traffic. Thousands of cars would clutter into any available space and congest the urban area even more. Fortunately, a fleet of cars is a much higher investment than a fleet of bikes – making this scenario somewhat more theoretical.
However, we observe similar developments with ride-hailing services like Uber and Lyft. In August, New York became one of the first cities to pass a bill putting a halt to new vehicle licenses for ride-hailing services [2] in an attempt to get a handle on this market. New York’s major Bill de Blasio commented „so the Uber business model is flood the market with as many cars and drivers as possible gain more market share, and to hell with what happens to those drivers or anybody else involved”.
The question is when other cities will react? With ever more means of transportation (bikes, scooters, cars, and potentially VTOL aircrafts) and ever more firms trying to gain a share of this promising market, we see the need for city governments to start developing a comprehensive concept on how to manage this opportunity in order to realize its full potential rather than let it turn into a public nightmare. One solution is the integration on a front-end layer, where firms integrate different services into one central user interface. Daimler’s Moovel or the startup Trafi offer promising approaches of integrating different services into one platform, thus truly matching demand and supply and making the firms fight over service quality rather than sheer network effects. Another solution could be a tender system, where the city asks for bidders for the provision of an inner-city ODM service. The most promising service receives the exclusive right to enter the city center. This could further enhance cross-modal integration with other means of local public transportation and thus allow for a promising future of urban mobility.
External Sources:
[1] The New Economy: Sharing not Caring, podcast from July, 17th 2018, available here https://www.bbc.co.uk/programmes/w3cswgvq
[2] Uber Hit With Cap as New York City Takes Lead in Crackdown, online article from August, 8th 2018, available here https://www.nytimes.com/2018/08/08/nyregion/uber-vote-city-council-cap.html
