On-demand mobility services continue to evolve fast. New solutions are introduced constantly to address changes in consumer urban transportation tastes, or address shortcomings of existing offerings. Consumers demand for personalized transportation solutions that are affordable, convenient, and safe has led to the rapid growth of ride-hailing. But in cities where it is most popular, single passenger ride-hailing is a major contributor to traffic congestion and lengthening travel times leading to deteriorating passenger experience. Micromobility emerged popular in part to address these problems but also to provide lower cost transportation alternatives. It is now being combined with ride-hailing to offer multimodal transportation. Multimodal on-demand mobility will have seven implications that will require careful analysis.
Reasonable prices, high convenience, and generally good safety continue to drive the broad popularity of ride-hailing in many urban areas globally, as demonstrated by skyrocketing Vehicle Miles Traveled (VMT). Ride-hailing’s level of convenience has been achieved due to a) the short times passengers have to wait for an ordered ride (people don’t want to wait long for their transportation), b) each ride starting and ending at exactly the locations desired by the passenger, and c) the ability to summon a ride from a mobile application and benefit from all the useful information such applications provide. Short wait times became possible because of the recruiting efforts by the major Transportation Network Companies (TNCs) to bring more drivers into their networks. More available drivers meant faster response to a particular ride request. Reasonably-priced rides became possible primarily because of ample driver supply and the discounting afforded by the massive capital infusions the sector has received.
We are starting to recognize that in the cities where it is popular, e.g., New York, San Francisco, Chicago, Los Angeles, Seattle, ride-hailing has become a major factor in worsening traffic congestion and lower speeds. These trends are due to two reasons. First, ride-hailing is resulting in more vehicles to be added to the transportation system. Ride-hailing is not leading to the removal of any privately-owned vehicles. It continues to be used primarily for short rides, i.e., less than 6 miles, instead of the daily commute, which in the US is an average of 16 miles each way. Consumers continue to use their own vehicles for their daily commute and utilize ride-hailing services for their short-haul transportation during the day. The cost per mile of privately-owned vehicles remains lower than that of ride-hailing services making uneconomical to use this service to commute such distances. Second, data is also showing that for every revenue-generating mile ride-hailing vehicles spend on the average 0.6 empty-miles. We define as empty miles the miles travelled 1) while waiting for the next ride, 2) going to the starting location of the next ride, or 3) driving to a refueling/recharging station or maintenance depot. As a result of these trends ride-hailing’s passenger experience is deteriorating.
Docked and dockless bike-sharing and more recently escooter-based on-demand micromobility services emerged from the recognition that because many of the intraday trips that consumers take are short they may not require the use of an automobile. The thinking goes that by using bikes, ebikes, and escooters a consumer can navigate around the congestion, thus reducing the time of travel, and get to their intended destination economically, thus reducing the cost of travel. Micromobility offers low per mile cost, convenience of readily finding bikes, ebikes, and escooters in many areas, and generally good user experience that is enabled through the mobile applications used and the technology on board the bikes and escooters, even as it comes with the reduced safety of operating bikes and escooters in environments that are clogged with cars and trucks. Micromobility’s popularity grew within a very short time and is surpassing the adoption of other on-demand mobility services such as microtransit, passenger car-based ridesharing, and various forms of car sharing.
TNCs could not ignore the quick consumer adoption of micromobility. After initially incorporating micromobility options to their ride-hailing services they proceeded with investments in, acquisitions (and here) of companies offering such services, as well as their own internal technology development. Combining of micromobility with ride-hailing offers a strong indication that we are transitioning from monomodal to multimodal on-demand mobility. Leading TNCs like Uber, and Lyft are constantly expanding their multimodal transportation options and in some instances they even offer coordinated connections to public transportation.
Ford was the first automotive OEM to embrace micromobility when it started operating GoBike. More recently Ford announced the acquisition of Spin, an escooter company. GM has also signaled its intentions to produce ebikes. However, both OEMs remain behind Uber and Lyft in the deployment of such solutions. Other incumbent OEMs that had started to develop businesses around a single on-demand mobility service, have also started to consider micromobility and multimodal transportation services through partnerships, investments, and internal development.
Adopting multimodal on-demand transportation services will not suffice for effectively addressing the worsening urban traffic congestion as long as:
- Consumers continue to use their privately-owned vehicles for their daily commute and utilize on-demand mobility services only for short rides;
- Single passenger ride-haling remains the primary on-demand mobility service used, regardless of whether we employ human-driven or, eventually, autonomous vehicles, the so-called robotaxis, for this service.
We need to find solutions that increase the passenger throughput per mile and permanently remove vehicles from streets. For example, public transportation modalities have the ability to move up to 25,000 passengers per hour while privately owned vehicles only up to 1,600 per hour. Increasing passenger throughput means that we a) extensively adopt ride-sharing on-demand mobility services, and b) effectively combine on-demand mobility services with public transportation.
A range of on-demand shared mobility solutions is already available today. From shared ride-hailing, e.g., UberPool, to fixed-route microtransit, e.g., Chariot, and dynamic-route microtransit, e.g., Via. The difference between shared ride-hailing and microtransit is primarily based on the size of the vehicles used. Shared ride-hailing services primarily use cars, whereas microtransit services use vans, implying that ridesharing has lower passenger throughput per mile than microtransit. To date none of these variants has proven as successful as single passenger ride-hailing. The worsening traffic congestion that is leading to longer travel times and results in a worsening ride-hailing passenger experience, may change this trend.
In a previous post I presented a four-dimensional framework for analyzing and comparing the companies offering on-demand mobility services, particularly ride-hailing. The framework uses: price, convenience, passenger experience, and safety. We can utilize the same four dimensions to rate and compare five types of on-demand mobility services: ride-hailing, ridesharing, car sharing, micromobility, and microtransit. In these qualitative evaluations the absolute ratings are not as important as are the relative positions of each type of service along the framework’s dimensions. Because travel distance is an important criterion on the services used, I have considered three ranges:
- Rides of up to 2 miles. These rides can be completed using micromobility, microtransit, ridesharing, and ride-hailing. However, micromobility and microtransit are ideally suited for these distances. My qualitative evaluation of using each of these mobility services for rides involving such distances is shown in Figure 1. One conclusion from the analysis of Figure 1 is that people who can and are willing to use micromobility for such distances have better passenger/user experience and similar convenience for a lower price but also lower safety than the users of ride-hailing and ridesharing services.
Figure 1: Comparison of on-demand mobility services for rides of up to 2 miles
- Rides between 2 and 6 miles. These rides can be completed primarily using microtransit, ridesharing, and ride-hailing. Micromobility services are not out of the question for this range but they become problematic for most people for distances that are over 2 miles. My qualitative evaluation of using each of these mobility services on their own for rides involving such distances is shown in Figure 2.
Figure 2: Comparison of monomodal on-demand services for rides of 2-6 miles
One conclusion from the analysis of Figure 2 is that ridesharing provides a good option for this distance range to consumers who can accommodate the longer rides (due to the multiple stops) and the experience of sharing vehicle with other passengers. Figure 3 shows how this assessment changes when a few of these services are combined to provide multimodal transportation solutions for rides within this range.
Figure 3: Comparison of multimodal on-demand services for rides of 2-6 miles
We can draw two conclusions from this analysis. First, for passengers who prefer ride-hailing, combining micromobility with ride-hailing could actually improve passenger experience in areas of high traffic congestion while delivering the service at better price but with some negative impact on safety and convenience. Second, along certain dimensions, the shortcomings of a single modality improve when multiple modalities are combined. It should also be noted that the use of autonomous vehicle fleets, initially in microtransit later on, as these vehicles become more capable and can operate in a greater variety of environments, in ride-hailing and ridesharing, will further improve the passenger experience and reduce price.
- Rides that are longer than 10 miles. These rides can be completed using ride-hailing, ridesharing and car sharing. My qualitative evaluation of using each of these mobility services on their own for rides involving such distances is shown in Figure 4.
Figure 4: Comparison of monomodal on-demand services for rides > 10 miles
One conclusion that can be drawn from this analysis is that for these longer rides, car sharing provides a better experience than ridesharing at a lower price than ride-hailing. Figure 5 shows how this assessment changes when a few of these services are combined to provide multimodal transportation solutions for rides within this range.
Figure 5: Comparison of multimodal on-demand services for rides > 10 miles
The conclusion is that for rides over 10 miles, multimodality doesn’t create as distinct advantages over monomodal options. As with the case of rides of 2-6 miles, the use of autonomous vehicle fleets in microtransit will improve the passenger experience and reduce the overall transportation cost.
Seven Implications to Adopting Multimodal On-Demand Mobility
As we begin to adopt on-demand multimodal mobility services and consider using shared mobility more broadly we need to analyze seven other implications of multimodal transportation and ultimately Transportation as a Service (TaaS).
Implication 1: Multimodal transportation and ultimately Transportation as a Service will require work in four areas: 1) on-demand mobility services and public transportation, 2) vehicle technology, including autonomous vehicle technologies, propulsion system technologies, etc., 3) transportation infrastructure technology, and 4) information technology (software, hardware, services, e.g., cloud computing-based services such as AWS and Azure). As is shown in Figure 6, work in these areas will involve the efforts of many industries, several of which are not traditionally associated with the automotive or transportation sectors.
Figure 6: The industries that will contribute to multimodal on-demand mobility
Corporations and startups will need to collaborate extensively to achieve the results necessary to make multimodal transportation broadly a reality.
Implication 2: As we move to multimodal on-demand mobility, we need to understand the importance of mobility orchestrators. These are the entities that coordinate transportation across modalities in order to optimize throughput, convenience, traffic flow, and other characteristics of a well-functioning transportation system, such as managing the curb in order to address ride-hailing pick-ups and drop-offs, the sidewalk congestion that is resulting from the uncontrolled deployment of escooters and bikes/ebikes, and others that have yet to be exhibited. Will the governments (city or state) or corporations be the mobility orchestrators? The traditional models used in the US that have city and state governments being the orchestrators of public transportation have largely been failing because the silos they create inhibit well-coordinated multimodal transportation. On the other hand, corporations will try to create walled-gardens around their transportation offerings that will limit the ability to coordinate across services outside their direct control.
Implication 3: The broadening use of fleets will make the fleet-based on-demand mobility value chain more complex. The companies offering micromobility, microtransit and several forms of car sharing, e.g., services like Car2Go, and Maven, are already signaling the accelerating adoption of fleet-based on-demand mobility. The broader adoption of Transportation as a Service and the use of autonomous vehicles by many modalities and for several use cases will further increase the utilization of fleets.
Implication 4: In the short to medium term, i.e., before 2030, the introduction of autonomous vehicles (electrified or conventional) for on-demand transportation services will not have a major positive impact on the passenger experience because by itself will not alleviate congestion. Introducing autonomous vehicles without removing from circulation more vehicles than those introduced will only worsen the traffic congestion. In fact, an initial testimonial by a Waymo One passenger indicates that even while transferring a single passenger at a time, and without apparent reason, i.e., not traffic congestion, the autonomous vehicles used sometimes took a longer route to the designated destination, thus leading to a less ideal passenger experience. However, the use of such vehicles by companies offering on-demand transportation services has the potential to:
- Reduce the transportation modality’s cost and improve operating margins.
- Improve the modality’s safety.
- Optimize the modality’s fleet-wide efficiency, particularly when combined with an intelligent digital platform, by increasing the number of rides each such vehicle can perform per unit of time.
Over time, however, as the percent of autonomous vehicles in circulation increases and we succeed in removing vehicles from our roads, AVs are expected to have a positive impact on the passenger experience as well.
Implication 5: Autonomous vehicles should be aggressively adopted by microtransit fleets. The Operating Design Domains of autonomous vehicles that will be introduced before 2030, i.e., the specific operating conditions in which such a vehicle is designed to operate safely and reliably, are ideally suited for a variety of microtransit use cases. These range from providing first/last mile connection to public transportation, to operating transportation in urban areas with traffic restrictions such as those that are starting to be adopted by a variety of cities around the world, or offering transportation on various campus types. These use cases combined with operating environment restrictions, e.g., city regulations, will lead to a variety of autonomous vehicle form factors; from small pods that can carry 1-2 passengers for short distances, to larger shuttles that can carry 10-15 passengers at a time such as those currently being tested by companies like May Mobility, EasyMile, and Transdev.
Implication 6: Fleet-based multimodal on-demand mobility will require intelligent backend digital platforms whose complexity and sophistication surpasses the digital platforms used today by companies offering monomodal mobility services. These backend platforms will utilize big data and AI for a variety of functions including trip planning and trip coordination across transportation modes, fleet management to maximize each vehicle’s uptime, and others. Multimodal on-demand mobility makes fleet management a much harder problem to address. Not only are the fleets more complex than in the monomodal case, but also the decisions these platforms will need to analyze are more complex. For example, given a particular 5-mile ride request, what combination of modalities should be offered? Is the passenger interested in the ride with the lowest price, or the shortest time to destination? What restrictions do weather conditions, traffic conditions, and even the passenger’s condition impose on the transportation plan that will be recommended? In addition to the backend digital platforms being more complex, the consumer-facing applications of companies offering multimodal transportation must also be more intelligent in order to present different transportation plan options in a quickly digestible manner. To compete effectively with services that utilize such platforms, in addition to developing the multimodal on-demand mobility services themselves, incumbent OEMs will need to quickly develop expertise in such digital platforms and associated consumer-facing applications.
Implication 7: Vendors that transition to multimodal transportation, or intend to offer such services, i.e., vendors belonging to Category E, will need to operate three fleet types:
- Micromobility fleets consisting of escooters, bikes/ebikes, and eventually autonomous pods.
- Microtransit shuttle fleets comprised of conventional vans, and eventually appropriate forms of autonomous shuttles, that offer fixed and/or variable routing shared rides.
- Ride-hailing fleets that offer single passenger rides. These fleets may consist of conventional vehicles only, robotaxis only (including robotaxis that are designed and built specifically to address the population, traffic infrastructure and other characteristics of the geographic area they will serve) or be hybrid.
Ride-hailing popularized on-demand mobility services globally because of its convenience, price, safety, and passenger experience characteristics. However, in many urban areas we are starting to feel the negative consequences of the oversupply of vehicles offering such services. Multimodal transportation enables to address some of these consequences but will need to be combined with a broader use of shared mobility solutions in order to increase the passenger throughput per mile. As we transition to on-demand multimodal mobility services and Transportation as a Service, we need to understand their implications and devise the appropriate implementation and rollout strategies.
(Cross-posted @ Re-Imagining Corporate Innovation with a Silicon Valley Perspective)