As defined by the Society of Automotive Engineers, shared mobility is ‘the shared use of a vehicle, motorcycle, scooter, bicycle, or other travel mode. Shared mobility provides users with short-term access to one of these modes of travel as they are needed.’
At movmi, our goal is to build healthier communities by co-creating innovative shared mobility solutions. In order to reduce the dependency on private car ownership, we need to increase the number of transportation options available to people on a global scale.
Using the UN Development Goals as our benchmark, shared mobility has the potential to create affordable, reliable, equitable and sustainable mobility options for everyone. During the global pandemic, we saw first hand how many of our tried and tested transportation systems failed us overnight. We need to rethink our planning and designing of shared mobility systems, so that they can become more resilient, especially in the wake of global crisis.
The movmi team has been involved in over 70 shared mobility projects worldwide, including numerous carshare, micromobility and Mobility-as-a-Service projects. In this article, we want to share with you our expertise and learnings in the shared mobility space.
In this article we will:
- Take a look at the global shared mobility market size and growth and shared mobility trends
- Help you understand the various different shared mobility business models
- Offer advice on how to build a shared mobility business model to suit your needs
- Use movmi’s own case studies to explore the challenges and successes with different business models
Shared Mobility Business Model
Understanding Shared Mobility Business Models and How to Build Yours
The outbreak of the COVID-19 negatively impacted the overall growth of the transportation industry in 2020, but despite this, according to Polaris Market Research, the global shared mobility market was valued at USD 96.01 billion in 2021 and is expected to grow at a CAGR of 8.1% until 2030.
There are numerous factors contributing to the market’s expected growth, including:
- Increasing consumer awareness
- The changing preference of the population towards more cost-effective and sustainable travel solutions
- Growing government initiatives to promote the use of shared services
- Automotive manufacturers investments into shared-mobility companies
Different Types of Shared Mobility Business Models
This is for shared mobility startups. The four different ways to build your car sharing business model:
1. B2C (business-to-consumer)
The B2C, A to B model is a flexible option where members are allowed to pick up a vehicle in one location and drop it off in a different, designated parking spot. This model has been successful when implementing an electric carsharing service because it allows members to park the vehicles at charging stations at the end of their trips. Generally members are charged in a similar fashion as in the station-based model.
The free-floating model, and arguably the most popular model, allows users to return the car to a fixed parking location, members can end their trips anywhere within a designated home area.
We are seeing an increased shift towards long-term or even subscription models at the moment. With the subscription model, you can generally choose from a range of brands and vehicle types, and may be able to switch vehicles as you wish. Most subscription services have no fixed contracts, and you can cancel your subscription when you want.
According to Polaris, the global B2C mobility sharing market was valued at USD 34.49 billion in 2021 and is expected to grow at a CAGR of 29.0% until 2030.
B2C Business Model Examples
Carsharing with flex on rentals and subscription: ekar
ekar is the fastest-growing, station-based, carshare service in the Middle East. It offers the easiest and most convenient way to rent a car from your mobile phone. You can book a car to suit your needs: by the minute, hour, day, week or month.
Subscription E-bikes for b2b2c and b2c: Zygg
With Toronto’s E-bike subscription service Zygg, you can choose a bike and get it delivered where you want, when you want it. It works on a pay-monthly subscription model which you can cancel at any time. The subscription includes an array of services including 24/hour customer support and a new e-bike within 24 hours if yours gets damaged.
Cargo Bike sharing: cargovelo2go
At selected locations across Switzerland, cargovelo2go cargo bikes can be rented, not only by the hour, but for a period of up to 30 days. The longer you use the Carvelo, the bigger the discount they offer on the rental prices. For a rental of 8 days you get a discount of 5%, from then on there is a discount of one percent for each additional day.
2. B2B (business-to-business)
B2B is often added to a B2C model as an additional revenue stream and to increase utilization during downtimes. Typically, you would see this model offered to a company who wants to provide their employees with a solution that meets their professional mobility needs. For these larger companies it can also make sense to replace their own fleets with a shared mobility one, to reduce total overall costs, to reduce the number of parking spaces required and to cut down on their carbon footprint.
In terms of service type, the B2B mobility sharing market can be segregated into passenger transportation and goods transportation. Increasingly we have seen companies such as Uber and Lyft utilize this B2B model with their food and grocery delivery services.
In addition to that, real estate developers are beginning to partner with carsharing operators to offer transportation solutions for their tenants as part of the amenities – reducing the need for parking spaces and reducing their overall carbon footprint.
Digital payment wallets became all the more popular following the need for cashless transactions since the pandemic. In the world of transportation, a digital mobility wallet can be leveraged to offer a convenient way to compensate employees and shift their otherwise car-centric commute to shared mobility. From the employer and employee perspective, payment authentication and compensation tracking is a critical success factor while considering corporate mobility solutions.
According to the latest report issued by Facts and Factors, the global B2B Mobility Sharing Market stood at about USD 31.25 Billion in 2020 and is expected to generate the value of an estimated USD 119.2 Billion by end of 2026.
B2B Business Model Examples
e-Colibri is a French B2B carsharing solution for corporate mobility. Their main objective is to reduce companies’ carbon footprint by reducing the size of fleets, improving fleet management and accelerating the transition to a more sustainable mobility model that includes cleaner and more suitable vehicles, such as eBikes, eScooters and eMopeds.
The Mobility fleet is available 24/7 throughout Switzerland and can be booked quickly and easily via the app. More than a third of Mobility cars are parked at railway stations, so you can combine Mobility with public transport. They offer numerous subscription options for businesses depending on individual needs and budget, which include a business light subscription and the option to have a Mobility station at each company for easier access.
3. P2P (Peer-To-Peer)
P2P gives car owners the benefit of earning revenue on their vehicle when it would have otherwise sat idle. This helps them reduce their cost of car ownership. Renters can also benefit with lower prices because they do not have to pay for overhead costs typically incurred with car rental agencies (office space, employees, etc.).
The car owner applies to be on a platform such as Turo and Getaround and, once approved, post an advertisement of when people can rent their car. The car owner or company will set a price for how much the renter needs to pay with prices advertised usually by hour or by day. People who want to rent the vehicle need to apply as well and be approved into the membership base (their driving record is check). A member will make a request to the car owner where the car owner can accept or decline the request. Depending on the company, physical keys may be handed off between owner and renter or renters receive a special “technology key” to unlock the vehicle for the reservation time period (usually done via app).
It should be noted that rental rates significantly vary: from as little as $10 USD per day to over $250 USD per day. Depending on the company operator, the company will take a commission anywhere from 10% to 40%.
From a service provider perspective, P2P car-sharing alleviates upfront costs and so it is more economically viable to bring to lower-density neighborhoods than traditional carsharing. However, there are certain barriers to participating in P2P which have to be overcome: liability and insurance, aversion to interacting with strangers and trust.
P2P Business Model Example
With Turo, you can either be a host or borrow a car. You simply have to enter a location and date and browse thousands of cars shared by local hosts across the world. Book online and have the car delivered or pick it up from your host.
4. Public/Private Partnership
A public/private shared mobility business model is one where a private company works in conjunction with a city to provide a shared service. Both partners split the associated costs on the venture and usually this type of business model creates a successful service as both the company and city have ‘skin in the game’. However, it is not an easy model to build and navigate as there are many different players involved each with their own interests. It is also harder to scale this type of model.
Public/Private Business Model Examples
Mobi by Shaw Go
Mobi by Shaw Go is Vancouver’s only bike share service. It is a public/private partnership with the city of Vancouver. Similar to other station based bike share services, you can rent a bike from one of the many stations around the city, either by the day, month or year.
Jelbi is Berlin’s Mobility-as-a-Service app that allows users to plan, book and pay for their journey across multiple modes of transportation, on the one platform. It includes buses, trains, bikes, e-mopeds, carshare and more. Jelbi in a public/private partnership between the city of Berlin and the multiple private shared mobility operators within the city.
Is There A Market For Your Shared Mobility Business Model?
Assessing each city with limited academic research, makes it difficult to determine when and if a city has a viable market for shared mobility services. Using the knowledge of industry experts, consulting on shared mobility projects and with the help of our SMCI-PT dashboard, we’ve created a criteria to determine where or not there is a market for shared mobility services within cities.
The Shared Mobility City Index (SMCI) takes into consideration functional, political, social and environmental components, to assess whether a city is suitable. We examine commuting patterns, city sustainability vision and plans, current shared mobility providers, public to private cost comparison and city density to understand the market potential for shared mobility services in each city.
Market Size Overview
According to Statistica, revenue in the Car sharing segment is projected to reach US$12,947m in 2022 worldwide and is expected to show an annual growth rate (CAGR 2022-2026) of 6.29%, resulting in a projected market volume of US$16,522m by 2026.
However, determining the market size potential of each city depends on what type of B2C and B2B carsharing we’re looking at. For the free-floating car sharing business models, the focus is primarily on highly populated, dense cities with a more affluent demographic. This makes intuitive sense because the upfront capital investment for a free-floating fleet is much larger. Vulog recommends a minimum of 50 vehicles are required to launch in these areas.
movmi’s experience has shown that free-floating fleet launches have been most successful in cities with 500,000 or more inhabitants and a population density of at least 1,500people/square kilometer (4000people/square mile). According to the UN, there are about 1,063 cities that have 500,000 or more inhabitants.
Such cities generally launch with an initial fleet of about 250 vehicles and a city of 700,000 inhabitants can grow up to 1,250 vehicles. If every single city above 500,000 people would introduce a free-floating carsharing scheme with 1,250 vehicles, there would be over 13 million carsharing vehicles on the roads. This might seem a lot but it’s still only about 1% of all cars on the road.
Station-based and A-B car sharing models can tap into the same markets but also into smaller ones -cities with less than 100,000 inhabitants.
Market Size Overview
Micromobility suffered for a while in terms of its image. The main problem being the lack of legislative and regulatory frameworks. After several setbacks, and with an increasing number of operators in certain cities, the market is now becoming more structured and better established.
According to Precedence Research, the global micro-mobility market size was worth US$ 48.11 billion in 2021 and is expected to surpass around US$ 198.03 billion by 2030. The factors such as rising oil and gas, rising road congestion, saturation in the automotive industry, and convenience of parking are expected to propel the micromobility market expansion. In addition, factors such as the global micromobility market growth of shared electric kick scooters and shared electric bicycle services in the wake of the pandemic, have opened up new potential for micromobility services.
In response to growing environmental concerns, government officials are offering incentives to use environmentally friendly transportation options such as electric bikes, bicycles, and electric mopeds. Governments across the world are also increasing the number of bike lanes, charging stations, and bike parking zones within cities. As a result, these initiatives are driving the growth of the micromobility market.
Analysing more than 50 million anonymous car trips, Inrix Research found that 48 per cent of all car trips in the most congested US metro areas are less than three miles. Cities with a high percentage of short daily car journeys (from 1 to 5 km) have great potential in terms of micromobility, which can effectively replace these journeys.
On average, a car takes up 12.5 m2 of road space, while 15 electric bicycles and their charging stations take up the same amount of space. Micromobility solutions provide more people with access to transport using the same available space. Therefore cities that have a high population density are lacking in both space and areas for new infrastructure would benefit the most from micromobility solutions.
Finally, although not a requirement, cities with mild temperatures and with minimal topographic variation have the advantage of being able to guarantee use of micromobility services all year round.
Market Size Overview
A new market research report shows that the Mobility as a Service Market size is predicted to reach $40.1 billion by 2030 from an estimated increase of $3.3 billion in 2021.
According to MarketsandMarkets, the growth of the MaaS market is influenced by increasing smart city initiatives, growing adoption of on-demand mobility services, need to reduce CO2 emissions, improved 4G/5G infrastructure, and penetration of smartphones. However, to enable successful conditions in which MaaS can survive in a city, a diverse range of players need to cooperate: mobility management players, telcos, payment processors, public and private transportation providers, and local authorities with responsibility for transportation and city planning.
The main issue we face in getting MaaS services up is that it has to utilize public transport, and for that to happen the public agencies in a region must agree to opening up the network and providing access. Public agencies are risk averse and often cash poor. They also have a duty to deliver services to 100% of their population. Therefore it’s understandable that cities are reluctant to invest money in opening public transport ticketing systems to private companies that, given the volatile nature of the shared mobility space, may or may not be in business within months.
Creating a cohesive and connected travel experience requires serious improvements in legislation and infrastructure, not just within cities, but even on a national scale. While many cities are relatively autonomous when it comes to their public transit systems, there are basic regulations that need to be set in place to make sure the new system works as intended.
Currently, Europe contributes a share of approximately 32 per cent to the overall MaaS market. It is the largest market because it has been an early adopter of MaaS. Countries such as the UK, Germany, France, and the Netherlands have been continuously investing in smart transportation infrastructure, and developed economies such as Finland and Germany are just a few of the countries that already have successful MaaS systems in place, which has helped make Europe the largest market.
Asia Pacific is one of the fastest growing markets, owing to the dominance of some of the leading vendors, such as Whim, Citymapper, Tanzer, and Moovel. China leads the Asian market, with operating revenues reaching up to USD 258.4 billion in 2019 and it is growing with the highest CAGR. Due to increasing urbanization and highly dense city traffic, the people of China are adopting the concept of shared economy. High smartphone penetration coupled with a huge urban population is considered as a major factor towards the growth of this market.
User penetration for the MaaS market in the United States has been comparatively lower compared to Asia, mainly due to the concerns over private data abuse and the local law regulations
Planned investments to improve urban transport and traffic infrastructure are expected to drive the European MaaS market, with Marketandmarkets predicting that the region will hold a dominant share in the MaaS market for the next three to four years as well as post 2025. Many MaaS proponents believe self-driving cars are the key to driving MaaS adoption. While ride-hailing services, such as Uber and Lyft, offer much of the service proposed by MaaS, they are still much too expensive for every-day use. These companies aim to reduce their overall costs by eliminating the need for a driver.
How does Micromobility Differ From Traditional Carsharing Business Models
Carshare Revenue Model
Shared mobility business models are all about access and not ownership. Instead of buying a product, people become members in a club. The original carshare business model was a subscription model where members paid a monthly or annual fee to access the vehicles and then an hourly fee when they actually use the vehicles. Susan Shaheen found in 2017 that most annual fees for station-based carsharing services are between USD 30 and USD 70, with cars costing USD 3 to USD 11 per hour and zero to 50 cents per mile to use. The monthly subscription fees of this car sharing business model were highly predictable for consumers but the additional charges per usage makes them difficult for customers to understand what the actual price of a rental is.
Free-floating carsharing services introduced a pay-as-you-go model where members are invoiced at the end of a billing cycle (generally at the end of the trip) based on their actual usage. Rates for carsharing are normally between USD 0.35 – 0.47 cents/minute and rate caps kick in at around 37 minutes and 5-8 hours for the daily rates.
Micromobility Revenue Model
Bike and scooter share station-based systems are a little easier to understand, as the also use a membership model, with unlimited monthly or annual passes available ranging from $100-$160/year, as well as single-ride options, with no extra charge per ride.
For free-floating micromobility options such as e-scooters and bike sharing, the average rate is between $0.15 to $0.39 per minute, in addition to the standard $1.00 unlocking fee, depending on the company. The average 12 minute scooter/bike share trip costs $2.80 to $4.70 depending on the service.
It’s also important to note that many cities have rebates for electric bikes and these are applicable to fleet owners too. A new bill has just been introduced to US Congress, the e-bikes act, which allows for up to $1500 of credit for individual e-bikes if it passes. This is also the case for electric cars. You can receive US $7500 credit in the US for electric cars so you are getting 5-10X the number of vehicles for the same amount.
Subscription Revenue Model
With subscription services, most models are open ended so users don’t have a particular day that you have to return your vehicle. The platform is usually integrated with many vendors so that credit can be checked easily and dynamic prices can be created. Subscription services usually include bundles. Users aren’t just paying for the assets, but they are also paying for insurance, the service etc.
A subscription model can reduce cost for many operators by reducing the costs of rebalancing for example, as it is a one-to-one model. However, even with a subscription model is it possible for assets to sit and remain unmoved. A company that is addressing this problem is ZoomCar in India. They are allowing peer-to-peer carsharing within their community. The members that have a subscription model, are effectively able to offer their car as a carsharing service to other members of the ZoomCar community when it isn’t being used. This could be a trend we see in the future and could also allow operators to bring in extra revenue per vehicle.
The Impact of Shared Mobility
Carsharing vehicles replace privately-owned vehicles:
In 2016, a study conducted by the Transportation Sustainability Research Centre (TSRC) at UC Berkeley found that a single vehicle in a one-way (or point-to-point) carsharing service can replace 7 to 11 privately owned cars. Research on round-trip carsharing services (where users return a car to the pickup location, or to another designated location) also shows significant reductions, with one fleet vehicle replacing 9 to 13 privately owned vehicles.
Shared mobility members have lower personal vehicle ownership and usage:
In Metro Vancouver, a survey conducted by Vancity of 4,000 carshare members found that 25% of respondents disposed of at least one private vehicle to carshare, while 40% opted not to purchase a car, preferring instead to use carshare. As for bikesharing, a survey conducted by the TSRC found that out of 6,000+ bikesharing users, 50% reduced their personal vehicle usage.
Shared Mobility Reduces Emissions:
A study published in Environmental Research Letters analyzed Modo’s fleet characteristics and found that carsharing members’ access to a variety of vehicle sizes reduce their GHG emissions by up to 30% compared to privately-owned cars. Having access to a range of vehicle options enables carshare members to match their trip purpose with the right size vehicle (i.e., a single person can drive a compact car for an errand rather than using an SUV, which would be more appropriate for other kinds of trips). Bikesharing also has major contributions to GHG reduction. A study of a bikesharing scheme in Edinburgh calculated the GHG emissions of its fleet and found that a cycling trip emitted 9.6 g CO2e/km, compared to the average 259 g CO2e/km emission of a petrol car.
Due to the decrease in personal vehicles and consequently, on parking demand, the City of Bremen has saved €60-95M ($86-136M CAD) on parkade investments. For residents, the main motive for using mobility stations is cost, reliability and convenience. Foregoing a personal vehicle means saving on time, effort and money placed on maintenance, making carsharing and public transit more economically viable.
In the case of Portland Bureau of Transportation’s (PBOT) Mobility Wallet Initiative, removing the cost for parking reduced the overall cost of living for Portland residents. This has been a major factor in the program’s success. The wallet credits offer freedom of mobility at a substantially lower price than the average cost of private car ownership. Trip data from Transportation Wallet users indicates its effectiveness, with 75% of users conducting trips with non-auto modes of transportation, as compared to 43% of those without Transportation Wallets.
Case Study: Volvo Car Mobility, Stockholm
Capgemini Invent was commissioned by Volvo Car Mobility, to conduct a study on its sustainability impact. With their extensive database, the company was able to provide the data needed for the intended analysis.
In their report ‘The Sustainability Impact of Car Sharing’, they discuss the findings of a study into the impact of the Volvo Car Mobility service M on the city of Stockholm, examining its impact on both driver behaviour and emission levels, and what value it creates for cities, property developers, companies, and individual customers.
Their report revealed that up to 8 privately owned cars are removed from the streets of Stockholm in exchange for Volvo’s M car service each year. This equates to around 4,515 fewer cars based on the company’s current vehicle fleet size and a reduction of 8,200 tons of CO2 from tailpipe emissions. This is a 3.2 million litre reduction in fuel consumption and 3.8 million litres in water savings (due to less car washes.)
Furthermore, up to 41,300 tons of CO2 emissions could potentially be avoided from fewer cars being produced.
Case Study: B-Cycle, Denver, Colorado
“Each mile someone rides on a bike-share bike instead of driving a car means about one pound of carbon dioxide is kept out of the atmosphere,” – Dr. Susan Shaheen.
B-Cycle, the company that designs the bike-sharing systems used in Denver and more than 20 other cities across the country, says that on all of its systems combined, 2.1 million bike trips covering 4.5 million miles have been made on its bicycles since 2010, all of which have offset more than 2,948 metric tons of CO2 emissions and saved more than 330,000 gallons of gasoline.
Business Operations: Preparation for a winning shared mobility business model
Once you have decided what business model you would like to offer, it is time to figure out how to prepare and launch your service.
Permission from regulatory bodies
Regulating the future of mobility is a complex challenge because,
a) technology cycles are much faster than typical policy or planning cycles,
b) it involves multiple levels of government often not fully co-ordinated in their approaches and
c) a host of issues that extend far beyond a vehicle’s ability to safely navigate city streets.
In order to create a successful shared mobility model, you need to take a look at the Federal, Provincial and municipal policies and regulations that will impact your shared mobility operations. Understanding of what the regulatory conditions are so your service operates legally in the first place is crucial. Understanding this will also help you take advantages of any incentives and highlight any adjustments you need to make to the product design or your operations, so that you can create a viable, long-term service.
It’s important that you complete a scan of federal regulations and innovation policies that impact shared mobility. Some things to look into are:
- Safety guidelines and standards for new technology: Is your vehicle of choice already regulated?
- Infrastructure and investment support: Are there vehicle rebates that you can tap into?
- Data management and privacy: What features does your technology need to have to meet the requirements?
- Overarching environmental policies: Is your service meeting any objectives and what incentives are available for that?
- Taxation: Are there tax breaks if the offer is corporate?
You must also complete a scan of provincial and territorial rules and innovation policies that address shared mobility. Some things to explore are:
- Vehicle registration and safety requirements
- List of insurance regulations and liability tied to it
- Driver training and licensing requirements
- Infrastructure and investment support
- Overarching environmental policies
Finally, you must perform a scan of municipal bylaws with a special focus on curbside, as well as a special license for shared mobility (and stipulations tied to them). Things to consider include:
- Traffic, parking and curbside access regulations
- Enforcement rules
- Revenue streams (licenses, congestion pricing, TDM schemes)
- Environmental/sustainability plans that will impact shared mobility in the future
- Equity objectives of city
Simultaneously to reviewing the regulatory landscape, most operators conduct a market assessment: it is crucial to understand the competitive landscape, who your target audience is, what their transportation frustrations are and if your business model will solve that. It is not just about understanding your target demographics, it is also understanding the existing market and products out there.
Add findings from SMCI work currently being done by students. Perhaps pick too examples: one with a lot of choices and one with very little.
Also have something around UX: break it down by mode
A good method of exploring the competitive micromobility landscape and the viability of your own solution is through demo days. They are an essential part of operational planning, regardless of the municipality. movmi believes that it is critical to test the actual product that will be deployed in your community during an RFP process and before the actual launch. Some things to explore when launching a micromobility operation are:
If we take Superpedestrian as an example, they spent 10 years on their onboard Vehicle Intelligence system. The platform continuously monitors internal systems and can prevent 100+ types of electronics failures within nanoseconds. It performs system health checks 1000 times per second, ensuring vehicle safety and prolonging component lifetimes. In fact the average vehicle lifespan is more than 2x the industry average, with LINK e-scooters lasting 5+ years. Unsafe vehicles are immediately taken out-of-service and cannot be ridden.
Lifespan and carbon neutrality:
Carbon neutrality means having an equal balance between the carbon we emit and the carbon we absorb from the atmosphere. It is important to conduct a Life-Cycle Assessment on your assets. Among the most important assumptions made during an LCA is the projected lifespan of a vehicle. That’s because a majority of the emissions attributed to an e-scooter come from the manufacturing process itself. These initial emissions then are amortized over the lifespan of the vehicle, meaning the more miles traveled, the lower the per-mile emissions.
Bird made a point to invest heavily in research and development, extending their fleet lifespan by 400% in just two years. In 2020, the Bird Two became the industry’s most sustainable scooter, using advanced aerospace and automotive engineering to increase its projected lifespan beyond 24 months.
How easy is it for members to register, book, unlock, ride and park the e-scooters/bikes.
This focuses on the hardware of shared e-scooters and bikes such as, the width of handlebars, the width and length of the foot deck, the braking system, whether the scooter has suspension, the ease of use of the kickstand and if there is a speed-gage etc. All these components work together to ensure the rider has a comfortable journey and one that they would like to repeat.
Geofences are a set of rules linked to a virtual geographic perimeter. For example, a slow-speed zone in a pedestrian plaza can be defined with a geofence. When effective, geofences dramatically improve rider compliance with slow-speed, no-riding, and no-parking zones.
We’re currently doing a few UX tests, I should be able to pull a similar table together (like above)
The next step is to sort out finances and build a proper capital budget as well as a 3 or 5 year statement of operations. You have to answer these questions on the revenue side:
- Is your business model based on a subscription model? If yes, have you factored in churn?
- If it is a pay-as-you-go model you will attract a lot more members but also have a much higher percentage of inactive users.
- What is the % split between inactive, active and your best users?
- And what are the average trip lengths and distances based on the use cases you target?
On the cost side, it is not just the lease, insurance, maintenance, software license and staffing costs that you need to consider. You also have to factor in the application processing costs, bad debt and if you are in a market with higher than normal fraudulent activities. On top of the sales taxes, you will most likely also be subject to tax rates for rental businesses. All of these numbers are different in each market and having a fully flexible financial model like we have built will make sorting out your finances as easy as it can be.
Similar to finance, this just needs to be updated and made more tailored to shared mobility in general. Again Venkatesh can help. He could also give some highlights for carshare vs micromobility platforms. I can fill in gaps for multiodal
Inspiration from before: When looking at carsharing technology platforms, you should investigate how they support your operations in the long run. This means they need to support you in the following 5 areas:
- telematics and what data it can collect from the CanBus;
- pricing tables, promotion modules, billing methods and payments gateways;
- fleet management with proper asset tracking and an easy map overview;
- customer management which includes a ticketing system that supports different teams;
- and finally a robust reporting tool managing your KPIs and ideally also a dashboard.
In 2017 movmi has reviewed 9 of the top technology software vendors that can support your unique car sharing business model. We interviewed Good Travel Software, INVERS, Mobiag, Mobility Systems & Services, MonGeo, Omoove, Ridecell, Vulog and EcoMobiX. Through live-demos, these vendors showed us how their technology helps meet operators and members demands.
You can find more information about this review here.
Finally you also need to figure out the setup of your operations. The success of your carsharing initiative depends on many factors but in order to be functional, you have to consider three key areas of Shared Mobility Design:
- Your community
- Your members
- Your assets
Each area is lead by a team:
- The community team is mainly responsible for growing your membership, vehicle utilization and revenues.
- The fleet team is responsible for vehicle maintenance making sure that the vehicles are clean, safe and in the right place.
- The member services team is responsible for fixing problems that occur when your members try to sign up, rent a vehicle or pay for the service.
movmi has built a playbook over the past 3 years that outlines which processes and procedures to implement, what tools your team needs and how you measure their success.
Shared Mobility Business Model: Common Mistakes and Misconceptions
There are a few common mistakes and misconceptions when starting a shared mobility business.
Starting without the proper regulations
Carshare: DriveNow, San Francisco
In 2015, DriveNow, BMW’s free-floating car sharing business model launched with a deployment of 70 BMW ActiveE electric cars. There were 900 parking spaces for car-sharing vehicles in San Francisco. But DriveNow, a car-sharing joint venture between BMW Group and Sixt SE, couldn’t use any of them because their business model was free-floating and San Francisco’s parking spaces are for station-based carsharing only.
As former CEO Rich Steinberg told Fortune and after they shut down operations in November 2015, “At the time, we were hoping to work with the city on a parking solution similar to what we have in existence in our European cities.” What DriveNow’s failure in San Francisco highlights is the complexity of regional and city parking policies which can make delivering that service impossible.
Micrombility: Shared E-scooters, Kelowna
E-scooters took to the streets of Kelowna, B.C. for the first time in April, 2021 as part of a provincial pilot program, but they had a rocky start and caused problems for people with mobility issues when riders began parking them in the middle of sidewalks at the end of their trip.
In June, 2021, Kelowna city council was given the option to cancel the e-scooter pilots entirely or to let those who could comply with the new rules to keep their services running. Councilors voted 6-3 to keep the program running but with many restrictions.
The key issue was whether the companies could put the technology in place to identify when users were riding on sidewalks and follow up by warning or fining those riders. These new regulations were put into place, intended to make use of devices safer and reduce the number of complaints about bad scooter behaviour. Restrictions included banning e-scooter rentals downtown between 10:30 p.m. and 4 a.m. – limiting the total scooter rental fleet to 700 devices – preventing scooters from being ridden along the downtown waterfront and along the pedestrianized blocks of Bernard Avenue.
MaaS: Whim, Finland
Maas Global soft-launched its MaaS application “Whim” in Helsinki, Finland in late 2016, followed by a full commercial launch in November 2017. In late 2018, the service had over 70,000 registered users. The first ever MaaS operator interconnected many of the city’s mobility options under one subscription and within a single app. With the Whim app, the user is able to combine, plan, and pay for public transport, taxi, car rental, car sharing and city bike trips.
Among the efforts to turn the idea of Mobility as a Service into reality, Finland and MaaS Global stand out as a special case. The story of the company is the story of new digital technologies, crumbling infrastructure, close cooperation between the authorities and the private sector and learnings from the time Finland was the mobile industry capital of the world.
It took MaaS Global twelve years to develop one of the hottest growth companies in mobility. In order to make this happen, legislation and regulation, customer interfaces, technology, application interfaces, billing and the will to get it all done must align. This tremendous challenge was acknowledged early on. In an age when so much revolutionary and disruptive thinking is thought to bloom despite governments or corporations, the story of MaaS relies on these players.
In January 2010 Finland, reformed its transport agencies and turned them mode agnostic, and in September of the same year the Finnish Ministry of Transport presented a report that started shifting the official policy from infrastructure to a more holistic transportation approach.
Underestimate the Importance of Convenience
PSA learnt the hard way that carsharing members value convenience over anything else. They launched their Multicity car-sharing service in Berlin in 2012 on the free-floating car sharing business model with only 200 Citroen C Zero EV and C1 minicars. The size of their fleet was too small compared to the area of the city because their customers needed to walk sometimes up to 1km to find the closest vehicle. If you want to change behaviour and get people out of their personal cars, you have to make the service uber convenient. As Brigitte Courtehoux, PSA’s senior vice president for mobility services, said “We learned that you need to put the cars in front of the customer”.
This is something car2go understood from the start. They launched the Berlin market the same year as PSA but they enter the market with 1,000 vehicles. Today car2go Berlin offers 1,100 vehicles.
Micromobility: Breeze Bike Share
A couple of common reasons for bikeshare providers closing down operations are; poor ridership levels, not including e-bikes and not providing enough docking stations and competing against dockless micromobility operators. An example of this is Santa Monica’s bikeshare program, Breeze.
Ridership began to decline with the growth of private micro-mobility options such as shared scooters and bikes launching into the city. In 2019, Santa Monica was home to scooter rentals from Bird, Lime, Lyft and Jump. Jump also launched a fleet of electric bikes. Breeze was a manual system with no electric option and while the bikes came with locks that could be secured anywhere, system pricing punished riders who chose to leave the bikes outside a designated parking space, whereas their competitors structured their pricing to allow for vehicles to be picked up and dropped off anywhere.
MaaS: S’hail Mobility App
Recognizing the need to increase public transport use, reduce the motorization level and transport-related emission and fatalities, Dubai’s Road and Transport Authority (RTA) in 2016 set out to deploy an integrated mobility platform, with the objective to facilitate people’s access to all transport modes available in the city. This endeavor resulted in the deployment of Dubai Integrated Mobility Platform (DIMP) and of the S’hail mobility app. This integrated mobility platform was the first of its kind approach to Mobility as a Service in the Middle East, combining all available, public and private, transport modes into one single app
Although supported by the regional transportation authority, the solution could not prove to be as popular as expected. When launched in 2018, the S’hail platform only allowed users to plan their public transit and taxi trips. A first in the local market, S’hail as a MaaS platform did not allow booking trips through it and users still needed to have a fare card (Nol) for ticket payments. For users who could not afford frequent taxi trips, eventually found little value in such a MaaS app. In addition, the RTA had other more popular options (and apps) to load the Nol card. The Nol card was integrated with taxi payments, parking and select convenience store PoS.
More than a year later in 2020, S’hail included options to plan ridehailing trips (Uber and Careem) and allowed deep links to free floating carsharing servic – eKar. It also allows users to top up their Nol account.
Learnings from the implementation:
- Customer service & governance: Integrations with service providers need to be seamless while managing users before, during and after their trips. Gaps in SLAs or a Maas level visibility causes low reliability ratings and utilization
- Multimodal: Planning and/or booking user journeys needs to be more convenient than doing it through dedicated native apps. Failing to provide affordable, reliable and multimodal alternatives either to complete the first-last mile gaps or to allow users to book different modes for a diverse use case, makes an integrated platform redundant.
- Operator business: Poor utilization and choice of target market needs to be addressed along with the mobility operators’ interest in mind. MaaS is best utilized when its services are majorly targeted towards residents (multiple trips, longer term member use cases). Misaligned priorities leads to poor customer service which in turn impacts reliability of the MaaS service as a whole.
Underestimate operational challenges
In 2011, car2go launched an all electric version of their free-floating carsharing service in San Diego with a promised by the federal government that 1,000 charging stations would be installed over the next few years. Instead, only 400 charging stations were installed because the nonprofit handling installations went bankrupt in 2013. Without proper infrastructure it was almost impossible to ensure that the entire fleet had enough charge and range anxiety made car2go membership numbers plateau at about 40,000.
car2go tried to solve the challenges of the underperforming market in different ways. First they introduced flatbeds that shuttled the EV smart cars to the closest charging stations, then, in 2015, they shrank the home service area significantly and in a last attempt they exchanged the EVs with traditional combustion engine ones in May 2016. Only to announce 6 months later that they will shut down the market completely.
Six months into the highly anticipated “Vélib Second Generation” program, the situation can only be described as chaotic. Out of the 1,400 stations that were forecast to already be up-and-running in Paris and its suburbs, less than half – or 670 according to the Vélib workers’ union SAVM – have now been installed. Out of these, some 400 stations are currently running on batteries rather than electricity, meaning they quickly run out of juice and the rack of available bikes end up blocked, and effectively, unusable. French media has dubbed the Vélib debacle “Vélibgate” and social media is awash with anecdotes and testimonies of what is widely seen as a failed, and ultimately very expensive, Paris city project.
Users of the system also complain of the malfunctioning of the bikes themselves: Broken seats, defective screens, and on top of it all, deactivated access cards, as well as a mobile app that keeps on crashing.
At the end of 2017, the self-service bike system recorded an average of 110,000 daily uses. At the end of April, that number had dwindled to just 30,000 uses per day, illustrating the actual access and availability of the bicycles.
When it comes to MaaS, the need for trust and collaboration is essential. The fear of not being “in the driver’s seat” and losing control leads to risk aversion behaviour within the ecosystem. From the point of view of the private mobility providers, the main question is whether or not they can trust that on a MaaS platform their services will be displayed fairly. Many transit authorities want to offer MaaS, but they just don’t have the partnerships established to do so.
Another operational issue that MaaS platforms face is customer service. When a public transit provider is at the center of the MaaS system, the customer service is also shifted to the transit provider. Regardless of where the relationship with the end-customer lies, that customer experiences mobility at a system level, with each part dependent upon the performance of others. This can become an issue when the public transit provider is the one dealing with all customer services related issues. For example, during phase of Vancouver’s Shared Mobility Compass Card pilot, one of the challenges they ran into was that many of the operational procedures they used are not scalable because many backend procedures are not automated – such as customer service.
movmi’s Case Studies: Shared Mobility Business Models
BMW ReachNow, Carsharing & Ride-hailing
BMW wanted to launch a free-floating car sharing business model in North America that is similar to their European service, called DriveNow. The service needed to compete with other transportation options such as car2go, Uber or Lyft, all already offered in the United States. This meant BMW wanted to add a ridehailing component to the carsharing service. In addition to that, BMW had set extremely aggressive timelines and wanted to launch in 3 different markets (Seattle, Portland and Brooklyn, NY) within less than 12 months.
Sandra acted as interim ReachNow’s Chief Customer Officer and was responsible for Sales & Marketing, Product and Market Development while movmi’s team supported ReachNow with content creation for the growth strategy as well as product and service testing for the Portland launch – the first time the multi-city platform was used. The implementation of a proper testing team was crucial to ensure that quality released to market was en par with competition (car2go in the case of Portland). Once the internal testing team was hired, movmi’s team handed over the reigns.
Under her leadership the team built and introduced an exclusive airport offering as well as the mobility ecosystem pilot program with on-demand and reserved carsharing as well as ridesharing (like Lyft or Uber) to increase fleet utilization. Sandra carried the vision for the go-to-market strategy for multi-city and multi-product offering and worked with various internal stakeholders and departments to turn that vision into reality.
The results of movmi’s input are:
- A seamless and best-in-class registration process which resulted in more than 7,000 registrations when Seattle launched.
- A shortened timeline between the launch of Seattle and Portland: within 4 months Portland was launched and the biggest challenge was getting the software platform ready for a multi-city offering.
- The first time a car manufacturer launched a carsharing and ride-hailing platform pilot in January 2017. The design work for this platform started in July 2016, so within less than 6 months the new service was launched. Risk and quality management was key and so the driver’s were employed and trained through a third party provider, Eco-Service.
As you can tell, the car sharing business model has many various aspects and moving parts which – when executed with attention and detail – will lead to the success (or lack thereof) of your carshare operation.
Micromobility: Veemo, Electric Bikeshare
UBC’s Vancouver campus is spread out and was looking at micromobility options to support students moving between buildings through their “living lab” program. Supported by UBC Parking group, it was decided to run a six months pilot during the winter, evaluating if shared velomobiles (Veemos) would be used and how.
The Veemo vehicles incorporate elements from both the car and the bicycle. They work similarly to a normal electric bicycle, as they are human-powered but have an electric component to help get over hills or long distances. At the same time, they incorporate car-like functionality including storage, weather protection, and a navigation panel. Sustainable features of these vehicles include the rooftop solar panels that charge the vehicle’s battery.
movmi’s team supported Velometro in the setup of the pilot and conducted primary market research to identify the right pricing structure. Additionally, movmi trained the operational team at Velometro on customer service and fleet management, provided standard operating procedures as well as checklists for the daily operations.
During the six-month pilot at UBC, 1200+ users logged over 1000 trips, rode over 2000 kilometers, and burned over 120 000 calories. UBC students and other users of the service praised aspects of the service including ease of use, convenience, and usefulness in getting around campus and keeping things like posters dry.
TransLink Shared Mobility Compass Card, MaaS
At the beginning of 2019, TransLink announced the winners of the first Open Innovation Call focused on multimodal transportation. The winners were three private shared mobility operators Evo Car Share, Mobi by ShawGo, and Modo Co-operative with the objective to launch an integrated transportation pilot. TransLink enlisted movmi’s help to create a Shared Mobility Compass Card Pilot in collaboration with the operators which was launched in October 2019 and ran until August 2020.
The goal of the pilot was to test how efficient and well received, integrated and multimodal travel in the city would be. It’s purpose was also to better understand customer needs and how the program could influence mode choice for its users.
movmi played a role in all five stages of the program. Initially by collaborating with the four transport providers to create a consumer survey to understand the needs for a seamless mobility pilot, by leading three multi-organizational working groups (Strategy & Governance, technical & launch squad) during both design and implementation phases and lastly by creating monthly dashboard that was shared with the four transportation providers, showing the total number of active users, number of trips, mode splits, percentage of multimodal trips etc during the operational period. movmi was also responsible for the final evaluation and close-out report.
During the 6 Month Pilot:
- 56% of the participants agreed that they changed their work-related travel behavior because of the SMCC program
- 60% agreed that they replaced the use of personal vehicles with other forms of shared mobility
- 30% tried a new form of transportation
Based on this potential for modeshift, TransLink’s executive team approved funding for the next phase which will introduce a seamless Mobility-as-a-Service offering to consumers. In January 2021, movmi was retained by TransLink for the overall Program Management for this next phase.
Are you interested in learning more about the business model of your next shared mobility launch? Send us a note and we’ll help you get started.