Shared Mobility Software has taken the Automotive Industry by storm over the last few years.
But how is this decidedly user-centric, novel arm of technical innovation driving growth in the sector, and why exactly is Shared Mobility Software so popular with OEMs, dealerships and, perhaps most importantly, customers?
This blog aims to provide an overview of the Shared Mobility and Shared Mobility Software market as it stands today, and how Shared Mobility as both an innovative concept and practical digital asset, will transform the automotive sector in the future via shifting ideas around ownership models, environmentalism, infrastructure, revenue, safety and regulation.
What is Shared Mobility?
“A transportation strategy that allows users to access transportation services on an as-needed basis. Shared mobility is an umbrella term that encompasses a variety of transportation modes including carsharing, Bicycle-sharing systems, ridesharing companies, carpools, and microtransit”.
Shared Mobility is not exactly a new term, but it’s certainly one that's found reinvigorated purpose and place in today’s digital economy as e-hailing, car-sharing and subscription-based purchasing habits become more established in our day-to-day travel plans.
The Rise of Shared Mobility and Shared Mobility Software
In our view, it’s best to look at Shared Mobility through two lenses - the pre-, and post-smartphone era.
Shared Mobility in the pre-smartphone era included transportation systems such as Car or Van rental, Carpooling, Bike rental, micro transit, DRT transport, Taxis, Public Transport, Community Bus or ride-sharing. Each system or travel option was part of what we would now call a nascent, but disparate sharing economy.
They were also decidedly physical - transactions were conducted entirely within a business property, relationships were tangible and face-to-face, marketing and sales was community-centric and somewhat “predictable”. Shared Mobility was inextricably linked to real-world assets.
Skip forward to the 2010s and the explosion of smartphone usage, and we find the Shared Mobility space quickly pivoting to digital-first platforms of shared transport solutions (mostly) available at the touch of a screen.
The entire market has been upturned. Everything from user communications to marketing, the rise of e-hailing and digital-based ride sharing, even entire business models like surge pricing, Car Subscription Software, Car Sharing Software, are all tendrils of Shared Mobility business evolution, splitting off from the now-ubiquitous app-based economy.
The app economy has revolutionised customer spending, habits and expectations, and the impact on the automotive market was and continues to be, industry-changing, and a massive driver of innovation in the sector.
What factors have driven the adoption of shared mobility?
Our new normal of digitally oriented Shared Mobility provides a clear solution to a rising customer need - convenient, affordable, sustainable travel, especially in urban areas.
But as the sector expands, so too does the potential of Shared Mobility and its impacts on other sectors such as logistics and freight, vehicle usership, insurance and safety, autonomous driving, urban planning and more.
Investment in the Shared Mobility sector has been staggering, and the sector continues to grow in both scale, popularity and requirement.
● “Since 2010, more than $100 billion has been invested in shared-mobility companies”.
● “The number of e-hailing trips tripled from 5.5 trillion in 2016 to 16.5 trillion in 2019”.
● “Spending on shared-mobility services could reach $500 billion to $1 trillion in 2030”.
● “The global shared mobility market is expected to grow at a CAGR of 16.5% during the forecast period (2023-2030)”.
But simply having an app doesn’t automatically upend generations of travel habits and draw billions of dollars in investment. Shared Mobility platforms and innovators are providing unique solutions to very contemporary and unique problems.
In our view, the primary factors driving the adoption of Shared Mobility and continued growth in the sector are:
● Cost-effective, on-demand urban travel requirements, including reduced access to parking and increased costs of car ownership in urban areas.
● Increased regulation in urban areas to reduce private car ownership or polluting car ownership.
● The rise in Usership over Ownership trends.
● Environmental pressures from consumers, and sustainability as a primary consumer requirement.
● More micro-mobility options for commuting.
● The need for customised, personalised services that are paper-free, fast, and transparent to better engage and retain customers in a digital world.
The transformation of ownership models
There has been a change at the heart of vehicle ownership: customers across the world have shifted from outright ownership of a vehicle to a more fluid, more affordable, and more digital concept of Usership.
Usership - a distinct model of vehicle usage where customers want access to a car without the financial outlay of full ownership - is on the rise, and while car manufacturers are not yet bemoaning the complete loss of car ownership, it’s become increasingly reduced.
● Consider the cost-effectiveness of owning a vehicle when “on average our cars sit idle for some 95% of the time” - new usage models can mitigate the impact of a depreciating asset and create a more cost-effective culture of vehicle use that meets the times.
● Consider a subscription-based vehicle ownership model - a single, monthly fee that includes fixed car ownership, insurance, maintenance and registration all under one roof.
● Or consider modern Car Sharing Clubs, like ZipCar - affordable access to a car without the continued financial outlay of managing a car in a city, leading to reduced emissions, more space on roads, and money saved for customers.
For customers, the benefits are clear. But for dealerships and OEMs, these changes are manifest and global and have provided new opportunities to engage customers around a new tranche of travel needs. Whilst car ownership will not completely disappear, it’s apparent that dealerships and service providers cannot rely on outdated models to keep business afloat.
Shared mobility and urban planning
As mentioned above, Shared Mobility has come into its own in urban areas, and here we want to introduce a term that perfectly encapsulates customer needs in areas of high population, car and parking density - multimodal transport.
This term - ostensibly a logistics term that “refers to the movement of goods using multiple modes of transportation, such as rail, road, water, and air” - conceptually aligns with Shared Mobility. As Shared Mobility concepts evolve and expand, so too must the infrastructure that houses and supports it.
As customers increasingly look to new modes of sustainable and affordable transport, Shared Mobility solutions must involve fixed, community-provided assets such as Public Transport, ride-sharing and e-hailing in one fluid ecosystem of travel to meet this rising demand - hence, multiple “modes” of travelling, all of which remain affordable and adaptable.
At a large enough scale the results would be profound - reduced car parking spaces mean more pedestrianised areas, less particulates and emissions, fewer traffic accidents, less noise pollution and more community investment.
The environmental case for shared mobility
As we mentioned briefly above, the environmental case for more Shared Mobility and multimodal transport options are clear.
As the transport sector accounts for 30% of emissions in OECD countries, reducing the use of petrol and diesel-based cars will have a huge impact on climate sustainability.
As regulations tighten on polluting cars, the rising use of hybrid/EVs and vans will naturally benefit the environment, which will in turn lead to more positive customer sentiment within shared fleets, driving sustainable demand, reducing polluting car and vann use, and increasing EV-visibility.
In short, a new culture of vehicle ownership and usership built within a culture of Shared Mobility will have enormous climate-saving impacts on emissions. Indeed, consumers are already demanding more EV options from OEMs, dealerships and rental companies and the pressure is on to meet this demand in good time, especially considering the ban on petrol-based new cars from 2023.
There are, as with any evolution within the transport sector, hurdles to overcome, customer sentiment to win over, and potential costs to mitigate.
● The urban density problem - changing attitudes, not to mention infrastructure, in dense urban areas takes an enormous amount of community stakeholder buy-in, investment, and logistics strategy. Saying you’re going to reduce car ownership is one thing, but changing entire patterns of urban travel, and doing it affordably, is the real goal.
● Digital safety - to create a digital ecosystem of multimodal transport options requires immense investment in data protection, payment protection, customer safety and education.
● Controlling sprawl - expanding a Shared Mobility tech stack for the sake of it won’t generate new custom, or engage existing customers. Any new platforms that are introduced need to meet a specific customer need, they need to be trusted, and they need to be integrated carefully.
● An ill-fitting ecosystem - this is where Coastr excels and where we find maximum impact is keenly felt: if a Shared Mobility ecosystem integrates badly with existing platforms or digital footprints, dysfunction reigns and customers disengage.
Shared mobility revenue stream management
Here we want to revisit the concept of diversification, personalisation and customisation, as these are three critical elements that can increase revenue and stabilise business in the digital era.
● Diversification - utilising the immense amount of data generated via new Shared Mobility tech platforms means operators, rental organisations, OEMs and everyone in between can rapidly diversify fleet offerings to meet new customer demand.
● Personalisation and customisation - from customer travel profiling using telematics data, to monitoring wider industry trends and mapping fleet demand in real-time, the platforms that underpin Shared Mobility solutions can help operators create more personal interactions, and customise services to help any customer.
The road ahead for Shared Mobility
For all the talk of driverless cars, electrified roads and drone taxis, the reality is that Shared Mobility is still in its infancy. The future is bright, and technical innovation is pushing Shared Mobility to incredible new heights, but real, long-term, effective integration is a marathon, not a sprint.
So where does that leave us today?
Tech is, of course, providing the potential for Shared Mobility to be the foundation of a new culture of travel, social mobility, and environmental protection.
The data taken from these platforms will be a key player in creating more personalised services. Indeed, market-leading services - the best car rental companies, the best vehicle subscription companies and the trend-setters pushing the industry forward - are already transforming in the wake of Shared Mobility revolutions.
Other factors - cost-sensitivity, for example - will continue to drive people towards Usership and subscription models of vehicle ownership.
In our view, the integration of autonomous vehicles into fleets will continue, but building the
infrastructure for an affordable, sustainable multimodal travel reality is a more pressing demand.
And finally, the cascading effects of innovation within the Shared Mobility Software sector will mean people are more connected, more aware, and more conscious of their impact on the environment, and this is something to be celebrated.
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