With mobility fragmenting, what should you unite around?

8 minute read 14 Sep 2018

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We’re currently witnessing the dawn of an entirely new age of personal mobility — one based not on the car as a product, but on the provision of Mobility-as-a-Service. 

Four very different possible futures emerged. But, right now, what’s most important is not how they are different, but what they have in common. Because all of them — and the many more possible future scenarios that we haven’t scoped out — are being driven by the same forces. Forces that are already making themselves felt across the globe.

First and foremost, our cities are having to deal with the consequences of urbanization. As more and more people crowd into the world’s urban areas, authorities are faced with huge and urgent challenges around air quality, congestion and resource allocation. Air pollution in China kills an estimated 1.6m every year.Journey times in Australia — a geography that’s known for its vast space — increased 15% between 2002 and 2011.

The responses of cities such as London, Seoul and Singapore make it clear that city authorities will play an increasingly central role in defining the future of mobility. It’s also clear that Mobility-as-a-Service has the potential to solve many of their problems, reducing congestion and pollution through cleaner vehicle fleets, fewer journeys and more efficient use of finite resources such as road space and parking.

Customer attitudes and behaviors are also changing. Rather than regarding car ownership as a badge of freedom, younger millennials and generation Z’ers are more likely to see the cost, environmental impact and hassle associated with it, and wonder why there isn’t a better, more seamless and smartphone-ready “do it for me” solution. Multi-modal journeys will be managed in one place — car, rail and taxi travel, for example, will be integrated into a single booking and payment system.

Investors are embracing these changes much more vigorously than the auto industry — VC and private equity funds have around $53b in on-demand mobility and mobility integration. Tech and engineering companies are a distant second with around $9.3b in investment. The traditional auto industry has managed only $2.3b.

Companies wishing to succeed in the coming world of Mobility-as-a-Service will face four fundamental challenges:

  1. Scalability. They will have to develop systems that can scale up or down quickly, easily and with minimal cost implications.
  2. Data. The collection, integration and monetization of usage data will be crucial to offering mobility as a service, not only in terms of gathering revenue but also in the planning and development of new services.
  3. Ownership of the customer. Getting and remaining close to the customer will be vital to developing new mobility services and revenue streams.
  4. Trust. Users must be confident that reliable and trustworthy security technology is in place to protect their data.

All four can be addressed with the right technology — blockchain. Blockchain’s combination of a secure, distributed ledger, cryptocurrency capability, smart contracting and open source design presents unique value in tackling these challenges.

It's a fundamental shift from the old command and control transport system structure to a fully distributed market where users make no little or no distinction between “public” and “private” transport and multi-modal mobility service providers take a central role.

So, there are many complex challenges to be faced, and much uncertainty over detail. But there is also an unprecedented opportunity to shape the future. How should you approach this opportunity? Here are some observations based on our experience so far:

The city as customer. Approach cities as customers and partners. Understand their increasingly important role as both the developers and regulators of the new mobility markets. Experiment with them to develop new mobility services.

Ambitious investment. Develop a strategy for bold investment where the ethos of real disruption replaces that of mere incremental innovation.

Holistic perspective. The goal of the organization must shift from “doing” to “being.” Discrete strategies for digital or innovation, for example, must be replaced by an integrated, holistic business perspective.

Business model focus. There are going to be many initiatives to get under way and manage. Make sure that the business model remains central to them all.

Human-centered systems. The new mobility business models will be driven by changing human behavior and needs. Make sure your processes and mechanisms are up to the challenge of capturing that.

But over and above these considerations is an overarching principle that we’re acting on here at EY, because we believe it’s the most important success factor of all:

Establish and maintain an open dialogue across the whole mobility ecosystem.

Because making the most of the future of mobility is going to rely not on narrow expertise in traditional skills such as engineering or marketing, but on having a truly diverse network and a broad range of collaborative partners.

Summary

The future of the traditional automotive industry is in question. To set yourself up for success in this new world, drastic changes must be made now in order to capitalize on the vast opportunities the future of mobility will bring.  

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