Urban & inter-urban mobility: how is changing how people move (part 2/2)

3. OEM_Invest_Urban&Interurban_startups_V4

Source: Made by B4Motion with CBinsights and Crunchbase data.

If we look at the infographic above, it is clear that the major vehicle manufacturers are eager to compete in the fields of urban and inter-urban mobility. This is hardly surprising given that most car journeys are made for these two purposes. Moreover, they know that in the not too distant future, within the next 10 to 20 years, there will be two main threats to their business models: change of ownership to access (Volvo think that 1 in 5 cars of the cars they sell from 2023 onwards, will be for subscription models), and RethinkX expects more miles will be travelled in electric connected autonomous fleets than in gas powered vehicles from 2021 onwards.

To illustrate OEM’s wide ranging activities, we have selected 2 European examples and we analyse their strategies in more detail as examples of two contrasting approaches: PSA and Daimler.

If we take PSA’s investments first. After a flurry of activity over the last few years, in October 2017, the car manufacturer decided to close down Multicity, a car sharing service that it had created from scratch. Instead, it will focus on its aggregator service, Free2Move (see the screenshot from PSA’s website below) backed by its iconic brands. It will also continue to hold a stake in Emov, another car sharing service, since it only holds a minority stake in that firm (Eysa holds the majority) and the service is proving successful.

Source: Daimler´s website

Now let’s look at Daimler. The German manufacturer is clear that it wants to participate at the operating level as well as at the aggregator level. It has acquired Mytaxi, Hailo, Taxibeat… and has created Car2Go and Moovel, to be present in all the rings of the chain. Here is important to highlight how Daimler in september make two strategic investments: one in Via transportation ($50M) to help the international transportation of the startup and the second one on Turo ($92M, in where the OEM was a lead investor; although it’s unclear exactly how much the company is contributing.), a P2P car sharing marketplace. In the same move Turo acquired Croove a Daimler´s P2P car carsharing.

In conclusion, Daimler wants to be presenting along the entire mobility supply chain: controlling assets, services, users… for this reason, it has made so many investments, venture labs and acquisitions. Meanwhile PSA is betting on this final layer, and not without risk, putting all of its efforts into Free2Move and closing down services like Multi-City.

Here is a teardown of all of Daimler´s investment not just in the field of urban and inter urban startups but also food delivery, …

Source: CBinsights

4. The future: eleven predictions

Full aggregation and then MaaS. Services like Whim, Chipi, Free2Move (PSA), Moovel (Daimler) have arrived and provide the perfect gateways for users: they offer convenience and the shameless possibility of getting the best deal possible. But, is this as far as aggregation goes? in our opinion, the answer is no. Think about Wechat. It was created as the Whatsapp for China, but its evolution soon left Whatsapp behind. This same thing can (will) happen in mobility too. Be way of example, we recently come across, Accomplice, a mobile app marketplace that integrates commonly-used apps from a variety of verticals (e.g. car service, food delivery, alcohol delivery, etc.) It empowers users to discover service options and coordinate / combine services from different apps in a single checkout experience. For example, request a ride to go home and order food to be delivered by the time you arrive all at the same time within one app.

Another example is Go-Life, developed by Go-Jek. The screenshot below says it all. The app allows users to order services (e.g. a haircut, a massage, someone to clean your bathroom or change the oil in your car) from the comfort of their smartphones.

Source: Go-Jekj

Local brands survive despite consolidation. Again, Daimler is the best example. It took the decision to merge MyTaxi and Hailo (probably because neither player was particularly established in the market), but in general, it opts to preserve the local brands it buys, in order to leverage region/city-specific knowledge and customer loyalty, offering access through its aggregator app, Moovel. But in most of the cases the mobility services will be in a country level. Mobility is very different in each country, even if we compare cities within the same country. We have chosen Italy to illustrate our point, but Spain, Japan, Germany, Portugal… are also great examples. There will be regional champions (e.g. Didi in China, Uber and Lyft in the US, OlaCabs in India, Cabify in Spain and so on).

Source: Made by B4Motion with Urbi data, among other sources.

Source: Inspired by a table compiled by PwC for Germany. We love Italy, so we decided to create our own version for that country.

A future divided between shared electric autonomous vehicles and driving for pleasure. The shift from ICV (Internal Combustion Vehicle) personal miles to electric connected autonomous miles will start in the very near future (see graph below). Some people will still want to that wanna drive their own cars (ICV, Hybrid, electric…), , but the time will come when the sole reason to do that will be for pleasure. Convenience, in terms of time and economics, will favor autonomous mobility. Of course, this change will be gradual and will affect the density cities (Megacities) first .

Source: RethinkX transportation.

Shaking up the status quo. In the same way Accomplice is going even further, entrepreneurs will go further in every line of business. There are examples like Spiri.io, a service that allows users to travel alone or to pick up other users of the service on their journey. Another examples is Gett + CityMapper, London’s newest way to travel is by using Gett and Citymapper’s taxi-bus hybrid combining black cab carpooling and a bus-like route. Or the fixed routes shuttle service created by Lyft, etc.

You own a car but not to drive it. An example is Dryver, a chauffeur service where a professional drives you in your private car. This will come to an end when the autonomous vehicle platforms explode and users are able to decide when to use and when to share their vehicles through an app (read Elon Musk´s vision in Master plan, part Deux).

Niche development. We have mention above, urban mobility is becoming more convenient and shameless, but what is happening in those special cases involving kids, the elderly, blind people and so on? or in special situations when people can’t drive like when going home after a party night?

Specialist assets. In order to satisfy the specific needs of all the different transportation modes new assets will emerge adapted to these needs. one example of this was unveiled recently in the form of MOIA´s van at the Techcrunch Disrupt event.

Dynamic pricing. This is not the future, this is the current situation. Moreover, this feature will spread transversely to every mobility segment.

Shared AV. This is just a matter of cost and the not insignificant task of drafting the necessary legislation According to the RethinkX report mentioned above, the cost per mile (in USD) may falt by almost $0.50, from the current level of $0.65 per mile to under $0.20 per mile.

Source: RethinkX transportation.

Universal accounts. Simple, the MaaS service providers will be-act like a common place for the users accounts. When users need to create a new profile in a new service they only will need to sync both services.

Platooning and remote control for human vehicles. Right now, platooning technology is being developed for long haul freight transport, The main startup working in this space is US-based firm Peloton Technologies. And the remote control of vehicles looks like a sense common approach for AV. This scenario is being anticipated by Phantom Auto.

The public private partnerships race. In “Connected Urban Growth: Public-Private Collaborations for Transforming Urban Mobility”, the authors index 71 partnerships between cities and new mobility services (see chart below).

Some examples of partnerships, not all with mobility service but all about urban mobility:

• Go LA, this app is the result of a partnership between The City of Los Angeles, California and Conduent, a former division of Xerox. Based on real-time public transport and traffic data, the app suggests options for getting from one location to another, including multimodal journeys (MaaS). It also lets users compare the time, cost, fitness benefits, and GHG emissions of those trip options. About 24 providers of transport services are featured on the platform, and some allow passengers to book and pay for services using the app.
• Chariot, is a private on-demand minibus service owned by Ford (see infographic above) operating in two US cities, San Francisco and Austin, Texas. The service dispatches 14-seater shuttle buses to pick up riders who hail rides using a mobile app and plans its routes dynamically according to passenger demand. According to the company’s founder, the service is profitable at approximately US$4 per ride. Ford Motor Company announced its acquisition of Chariot in september 2016 and later said that it would expand the service to six more cities by the end of 2017.
• Strava Metro, Strava created this “spin off” after realising that municipalities and states were using Strava Heat Map to document and analyze projects.
• Uber, New Jersey City Authorities have partnered with Uber to subsidize rides to and from the commuter rail station that connects to nearby New York City.
• Biketown, this bike-sharing system was launched as the result of a partnership between the City of Portland and Motivate and thanks to the sponsorship from Nike.
• New York city will help UPS to convert its delivery fleet into an electric one.
• Via Transportation and Sacramento. In West Sacramento, Via is working closely with City staff to design a groundbreaking fully dynamic city-wide service that will complement other public transportation options.
• LA Metro asking for micro transit proposals. It is currently welcoming proposals for an Uber Pool- or Chariot-like on-demand transit service designed to fill gaps in service coverage.
• Orange County and Transloc. A partnership between three California transit agencies to deploy on-demand buses in their respective communities: Orange County Transportation Authority (OCTA), Central Contra Costa Transit Authority (CCCTA) and the San Joaquin Regional Transit District (SJRTD). The service will be called OC Flex.
• AVIN, Autonomous Vehicle Innovation Network. Ontario is launching AVIN to catalyze the efforts inside the community to develop AV.
• UPS has formed a partnership with the University of Huddersfield in the UK; cycle courier company, Outspoken Delivery; a product development company, Fernhay: and data specialists, Skotkonung to introduce a new bike and trailer fleet in the London borough of Camden, as part of a Low Impact City Logistics project. The GBP 10 million project is funded by Innovate UK, a non-departmental public body sponsored by the Department for Business, Energy and Industrial Strategy.

We have documented lots more cases, so if you want to learn more, please read this presentation from a recent SUMC webinar and/or this article from Citylab.

5. Conclusions

Urban and inter-urban and interurban mobility will grow the next 20–30 with the growth of the cites (just see the social urban trends), this is a market that will generate a lot of profits (just see the future market valuation), the leaders are being created right now (just see the investment in the urban and interurban startups) and all kind of innovation has to come (just look the differents new business models approaches and public private initiatives).

6. Who we are and why we do this content

We are a Venture Capital and Venture Builder focus/ specialized in mobility and nothing but mobility. We understand mobility as anything (Software, hardware) that helps to move a person or a good from point A to point B.

This article is the first one of a series of content that we will publish during the following months/ years. We decided to do this work for mainly three reasons:

We love mobility and love! Nothing more critical than this reason.

This work is constructive, internally, for us. It helps us to mature idea and make predictions according to a specific issue throw the internal discussions.

Also, it helps us to evangelize and create knowledge surrounding mobility. Here is why we start with a glossary.

We want to share at least a 15% to 20% of what we learn in this blog posts.

In the second part we will go to see how the OEMs are investing in startups and the predictions of the next future for this category

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