A New Paradigm In Transit: Understanding Mobility as a Service

Jun072015

The genesis of this conversation came from thoughts around ridesharing and how it’s changing the face of customer service, but as we dive deeper or look further afield, we see it’s only the tip of the iceberg. Spending the last 3 days at the Canadian Urban Transport Association conference in Winnipeg added perspective and dimension to this conversation.

I have an opinion on ride sharing but it’s trivialized by the exciting change looming in the near future. I don’t, however, want to rob you of my sentiments and as such have relegated them to the “Soap Box Appendix” at the bottom of this article.

The true meaning of mobility is moving around and connecting with the things in life that make us happy. Transit and transportation do this by physically picking us up and dropping us off somewhere else. This is taking us to work when we’re in a rush,  heading to the shop when we’ve run out of milk, delivering an important parcel to a loved one far to reach, and going home after a long day. This is most of everything we do.

The real story is ridesharing and it’s only the first drop of a wave of change coming. Mobility as we know it is changing, and within 10 years it will look nothing like it does now. If we just focus on ridesharing though, the lead is buried. The arguments for it are centralized on the new standard for customer service. The big change is the interface which allows you not only to request a car, but know how long it will take as well as watch it get closer to your location in-app. We know of private ride sharing but there are a number of public institutions providing it. This is the first generation of personalized mass transit and mobility as a service. This has both provoked industry growth and provided a great segue for the privatization of public transit. We will see massive change in these areas in the near term future.

There is movement around the world in this area. We’re seeing ride sharing companies branch out to consumer delivery services. We’ll soon see this become available to commercial shipping and logistics. We’re seeing the ability to share and rent cars by-the-hour. We’re seeing things and people move in masses. It is still important to note that, even within transit and travel, a journey is multi-modal. A user may walk and bus and taxi and bike. The face of transit can and will change simply by giving the user insight and options into travel planning via the provision of data and the control of utilities. We’re already seeing a lot of development in this area and products available.

The second generation of mass transit will include automated vehicles, commercially referred to as ACE (automated, connected, electric) vehicles or Self-Driving Car. These vehicles will be in dealerships within 5 years and will out-number the non-automated vehicles in 10 years. Automated vehicles will bring with them huge benefits in being a component of smart cities. Capacity of roads will be far greater thus enabling the re-purposing of current roads and reducing cost of infrastructure. Smart, sensing, connected cars will provide a far safer road system.

With these changes will come the need for serious social restructuring. The disruption in transit workforce brought on by ride sharing is just starting, and will only continue to escalate with the advent of automated vehicles. Operators will see a lot of change, and so will customers. Customers will need to build trust in new modes of transit, ride sharing being one and automated vehicles being another.

There’s a reason why companies like Google, Apple and ride sharing companies are investing in autonomous vehicles right now. The vehicle is the next mobile device. The data and mobility companies are out in front here with shared data accounts, roaming, networking – these changes are all in anticipation. Partnerships and consortiums will also signal and usher in change. We’ll also see changes from the auto-manufacturers as well, we might see them stop selling the cars themselves, and instead sell services by the hour, by the trip.

Partnerships will be big. Its not just about the vehicles but also about the sizeable changes that are coming in tow. With that comes huge changes in energy consumption and storage, mobility, technology and data. The change on the scale of the city – a smart, connected city.  A system of electric cars with high capacity batteries becomes a complex energy storage system.  Connected cars provide more data. Changes in mobility will enhance how citizens are connected to what makes them happy.

This change will happen and will be propelled by private corporations. The role of government will be to facilitate and provide funding in the private-public-partnership model – but the exact arrangement will remain to be seen. This path to adapt will be different for each city.  Finland is way out front in this space and have pledged to host the first mobility-as-a-service model in the world – and its done in partnership with more than 20 private companies.

The cities best suited to change will:

  • Work with private companies with solutions; participate in, encourage and facilitate partnerships, and be a part of the system.
  • Understand their data- operational and customer – now and how it will change in the future.
  • Lead the conversation on mobility-as-a-service instead of being late and responding and reacting
  • Understand trust is important through, what will be, massive social change
  • Be transparent and inclusive and know the easy win right now is to be providing open data and cultivating a developer and partner community
  • Understand its place in a connected city and anticipate the customer’s need for multi-modal transportation
  • Have connected vehicles

The image above was taken from the Ottawa Confederation Line website. Visit the site to see more concept drawings and photos of the construction.

The soapbox appendix:

Disruption is an important theme to explore. Disruption is displacement. For every action there is an equal and opposite reaction. Ride sharing is an interesting case. The benefits are obvious and immediate: better service (due to accountability through customer rating) and lower cost.  Disrupting customer service has very little negative response – it’s a great thing, theres always room to improve customer service.  Still, I would venture, that ridesharing is not a response to poor customer service – although mainly say it is.  I would venture that it’s more luxury for less money. There has always been better customer service available through black car and limo service.

The money differential has to come from somewhere. Ride sharing is exploiting a loophole that removes the need to pay licenses, insurance and other infrastructure cost that local taxi services and transit currently pay. Ride sharing isn’t revolutionary – it’s a displacement. Its passing along the savings to the customers from these loopholes. If you look deeper into the displacement, you’ll see how the city is affected: licenses are local payments going towards infrastructure – taxes would be raised or diverted from other services to compensate; insurance protects you, I think associated risks with a lack of insurance are pretty clear; creating an unfair playing field for the hundreds of trained, hard-working cab drivers who have little other options in career; the taxi companies are locally owned.

Ride sharing represents an important and real component of multi-modal transportation – more specifically, the technology that has come with it. This first generation will change and adapt but there is no question it will be present.

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  • Brett, Excellent post. I like your “take” or “soap box” stance as you call it. Its going to be a real change in dimension for all of us. It’s nice to see that even city transit is seeing major disrupters brought on buy Technology, Mobile, Open-data and most of all personalization. The conversation around UBER and what it is and could do to the industry is just what was required to see through to the next 10 years into new ways of thinking in this space. Multimodal is part of the now and the future… the big question needs to be what role will the current urban transit planners and controllers play in the new transit landscape.

    With Billions of dollars being invested Nationally and Internationally on Rail and Light Rail just to compensate for growth and cope the change in Millennials in Thinking “Access Not Ownership” new concepts are going to required.

    Not that Japan’s maglev train breaking the world speed record with 600km/h in a test run is not impressive and brings forward huge opportunity, Its only part of the picture. Its an amazing time to be part of this industry as it grows and meets the new challenges of personalization in a hyper connected and digital world.

    Links:

    http://www.goldmansachs.com/our-thinking/pages/millennials/index.html?cid=PS_01_18_07_00_02_15_01

    http://www.theguardian.com/world/2015/apr/21/japans-maglev-train-notches-up-new-world-speed-record-in-test-run

  • Laura Townson

    Yes Brett!! Well said and I couldn’t agree with you more. Though I do like the conversation that has prompted as a result of Uber, I must say, it’s not really a model I support.
    These ripples are great to help organizations identify customer service opportunities, improvements to overall service etc., but what frustrates me personally, is the overall lack of long-term thinking I see from my peers.
    They are quick to support Uber because it offers cheaper rates or convenience, however my concern is what about the people? The drivers who’s livelihoods are being affected? Surely many will be put out of work. Will they need government assistance while they find new employment? What will these supporters say when the city taxes go up as the use of public transportation goes down? And don’t even get me started on the insurance aspect of it all.
    It scares me sometimes how much people live in the now. Everyone wants instant gratification and then blow a gasket when we have to deal with the fallout.
    Great piece.