The future of mobility is here. From the sidewalks of San Francisco to the streets of Delhi, urban transportation has expanded beyond cars and buses. New transit modes like ride-sharing and electric scooters are gaining traction across the globe.
Public attitudes are changing as well. Younger generations care less about brands* and more about experiences. This can be seen in the success of services like Uber and Lyft, which create a layer of abstraction between the city dweller and the car.
The fact is that in today’s world, it’s no longer about the underlying physical vehicle. Instead, it’s primarily about overall access and availability, with people seeking a more efficient and integrated experience.
Multimodal services are the next step. For example, Deutsche Bahn subsidiary Arriva carries passengers across transport modes, including bus, train, tram, ferry, cars, and bikes. These new services further disintermediate the relationship between city dwellers and their transportation.
The Urban Challenge
These changes are urgently needed. An estimated 200,000 people per day are expected to move into already-crowded urban centers through 2050.
Many of the world’s largest cities were never built to accommodate today’s traffic. As such, there is a limit to what can be done, just as there is a limited amount of money that can be invested into improving public transportation.
With municipal funds scarce, the private sector has taken the lead. In the past two years, an estimated $120 billion has been pumped into transportation tech. Recent examples from the mobility-focused venture firm Autotech Ventures include startups like Outdoorsy, an online marketplace for shared use and rental of recreational vehicles and motorhomes, and SpotHero, a parking inventory and booking platform that connects drivers with garages, lots, and valets.
In fact, micromobility startups alone have attracted more than $5.7 billion since 2015. Other top targets include ride-hailing, batteries, and autonomous technology.
To explain why these sectors attract so much attention, we can look to three specific aspects of mobility:
- Form Factor: This increasingly includes bikes, motorized scooters, one-wheel skateboards, and even electric shoes, as each fights for space on streets and sidewalks.
- Schedule: This goes beyond a daily commute and includes periodic shopping or sporadic travel to concerts and events.
- Distance: This is no longer fixed from a garage at home to a downtown parking lot, but incorporates society’s shift away from a headquarter-centric model to a more dispersed workforce.
Addressing each of these is the key to building a successful business in the current transformation. Effective mobility options call more for business model innovation than technology innovation. They also require a change in consumer preferences, most likely brought by generational changes, rather than a fundamental technological revolution.
Already, we’re seeing the industry adapt. Mobility as a service is rapidly growing in importance, and the prevalence of cars as a service is also expected to increase. The auto finance industry is preparing a range of strategic moves in light of the anticipated explosion in mobility services popularity.
Other sectors are getting in on the act. The rise of intelligent vehicles is leading to innovations in automotive InsurTech. The energy business is preparing for major shifts as the world’s major automakers ramp up plans for electric cars. Even the real estate business may be affected.
The Need for Urban Policy
All of this could eventually challenge the limits of urban policymakers. Because transportation issues are increasingly shaped by local decisions, tier-one cities like New York, London, and Tokyo are often watched by smaller cities with fewer resources. Given their size and clout, these metropolitan areas have sufficient power to set the regulations that other places are likely to follow.
To date, these leading cities have done much experimentation to regulate micromobility, but no general approach has been set beyond limiting alternative providers as they try to rein in the proliferation of vehicles.
Ultimately, though, the issue goes far beyond merely addressing autos, trains, and buses. Much more needs to be done by the industry to rethink the entire future ecosystem of urban mobility.
Although more systemic shifts in last-mile transit will take time, supporting some of these alternate modes can be achieved now. Among the steps that companies could consider now are:
- Providing cost reimbursements to employees who use alternate means of transportation.
- Ensuring that bicycle or scooter racks are available at or near all workplaces.
- Working with companies that provide sheltered bike lockers near transit points.
- Promoting safer and additional bicycle lanes to local government officials.
These are just some of the small steps that can be taken now to address the larger changes that would be welcomed in the future.
There is clear demand from city dwellers and government officials to improve the current reality. The question is how do we address these growing problems in a cost-efficient way—and quickly?
This article first appeared in Forbes.
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