Have you ever wondered how exactly did we get to the point where many of us can’t remember the last time they called a traditional cab company, where scooters and bikes for rent have become native to the landscape, and where we have to play dodge with food app couriers all the time?
The shared mobility services have been an interesting development, creating new niches in the economy and adding a splash of excitement to our lives. Will the companies providing them prevail, or will their growth be stunted by some insurmountable challenges in the near future? Let’s find out where all this is going.
Shared mobility companies have been trying to overcome a number of obstacles, including the pandemic and a pushback from regulators. As anyone living in a medium-sized to a big city can confirm, they’ve managed to weather the storm so far and don’t seem to be ready to leave the scene.
Is this a sign of them sticking with us for good or just a facade put up to mask struggles that will lead to eventual downfall? What is the future of the shared mobility market? What trends can we identify? Where does their relatively recently enjoyed expansion take us to and most importantly – is the charge going to be per mile or minute?
What is shared mobility?
Since the phenomenon in its current form is relatively new, let’s make sure we understand what it encompasses. At its core, shared mobility is about embracing the idea of sharing instead of owning. It's a modern approach to transportation that focuses on making mobility more accessible and efficient for everyone. Instead of relying solely on personal vehicles, shared mobility encourages people to utilize various transportation options like cars, bikes, and scooters that they don't own but rent on a short-time basis instead.
The idea of shared mobility allows you to easily grab a bike or scooter, book a ride with others heading in the same direction, or hop into a shared car whenever you need it. Think of it as having a fleet of vehicles at your disposal without the burden of ownership.
These services are often accessed through user-friendly apps that allow you to find, book, and pay for the transportation mode you need with just a few taps on your smartphone.
Advantages of shared mobility services
Shared mobility services have taken root in the urban ground for good reasons. They’re easy to engage with and fun, plus they do the job they’re supposed to do well, which is getting you from point A to point B. There’s more to it, though.
Reduced cost
Shared mobility provides a considerable cost-cutting opportunity compared to traditional modes of transportation. By sharing vehicles with others, you can split the expense of ownership, maintenance, and fuel, making it more affordable for everyone involved. This is particularly beneficial for those who don't require an automobile on a daily basis or for those who live in urban areas where owning a car can be expensive.
Reduced traffic congestion
Another of its advantages is that it plays a vital role in reducing traffic congestion in cities. By encouraging people to share vehicles instead of driving alone, we decrease the number of cars on the road, especially during peak hours. This leads to smoother traffic flow, shorter ride times, and less frustration for commuters. Fewer vehicles out also means there's less competition for parking spaces, making it easier to find a spot in crowded areas.
Eco-friendliness
Next up is the hot topic of our times, environmental sustainability. Vehicle sharing helps reduce the number of private cars on the road, which in turn lowers greenhouse gas emissions and air pollution. Shared mobility services often incorporate electric or hybrid engines, further reducing carbon footprint. This shift toward cleaner transportation options contributes to mitigating the impact of climate change and improving air quality in urban areas.
Access to a variety of transport options
Expanding the range of transportation options available to individuals may be perhaps the biggest selling point of shared mobility from the customer standpoint. Using these services, people have access to a diverse fleet of vehicles, including cars, bikes, scooters, and ridesharing options. The variety enables users to choose the most suitable mode of transportation based on their needs, preferences, and the specific journey they are undertaking.
This greater selection just mentioned ties into enhanced flexibility, convenience, and freedom of movement for users. With the rise of mobile applications and digital platforms, accessing shared mobility services has become effortless. Users can conveniently locate, book, and unlock vehicles through smartphone apps, and be on their way in seconds to minutes. Whether it's a scooter for a quick trip downtown or a larger vehicle for a family outing, the accessibility empowers individuals to adapt their transportation choices to their changing needs.
Disadvantages of shared mobility services
So far so good. Shared mobility has been getting its due praise in this post but are things all that rosy indeed? Well, to get a more realistic picture of the state of the niche, we have to touch on some of the disadvantages as well.
Limited coverage
First off, the coverage and availability may be limited, especially in certain regions or during peak hours. While shared mobility services have been expanding in urban areas, rural and suburban parts may have limited access to them. This can create difficulties for individuals who rely on rented vehicles as their primary mode of transportation, as they may encounter challenges in finding them available or accessing the services in their desired locations.
Prone to technology instability
Shared mobility's heavy reliance on technology and infrastructure can be a double edged sword. This dependence on digital can be a disadvantage if any glitches or network outages occur. Issues such as app malfunctions, connectivity problems, or insufficient charging stations for electric vehicles can impact the user experience and hinder the seamless functioning of shared mobility services.
Imagine the following scenario. You're enjoying a scooter ride home, however, upon arrival you realize your phone shut down because of the chilly weather outside. Well, you can't just leave the scooter where you stand, so you take it into the building's hallway hoping no one's going to mess with it. You then go up to your apartment to charge the phone and dash back down to properly end the ride.
Although this incident is likely to result in additional expenses because of the artificial extension of the ride time, the circumstances could have been worse, say, if you weren't anywhere close to your home. It serves as a reminder that even seemingly user-friendly technology can unexpectedly generate issues, underscoring the delicate balance shared mobility faces between convenience and potential challenges.
Reduced level of privacy
Moving on, shared mobility involves being in vehicles with other passengers, which can result in a reduced level of privacy. Another aspect of it is in-app user data collection and tracking. Apparently this isn't done for any malicious purposes, but many people prefer to leave as little digital trace as possible and aren't happy about things like geolocation.
Less control
Another potential drawback of shared mobility services is that you have less control over the travel experience compared to using your own private vehicle. You may not have full control over the route taken, the choice of music or temperature settings in the vehicle, or the behavior of other passengers. You are also dependent on the bike and scooter coverage area and can't just leave them anywhere. This lack of control can lead to a less personalized and potentially less enjoyable travel experience, but this is a rather minor thing.
Finally, the idea of shared mobility services relies heavily on the availability of vehicles in the network. This means that individuals may face challenges in accessing a shared ride when they need it, especially in some areas and at certain times of the day. Access to vehicles may vary, and individuals may need to wait or adjust their travel plans based on it, which can be inconvenient and less reliable compared to car ownership.
On a side note, since we’re talking about the disadvantages, although shared mobility is an innovative and exciting sector, the model doesn’t guarantee success in itself, for various reasons, as Uber’s failure in China showed us.
The current state of the shared mobility market
Knowing the pros and cons of shared mobility, we should now take a look at where the market for it currently is.
McKinsey & Co. report that at present:
- there are 40+ million trips being booked daily using two biggest e-hailing platforms
- in global terms, e-hailing makes up over 90% of total consumer spending on shared mobility
- it took 4 years for the number of e-hailing rides to triple and just a year for micromobility rides to double
- surprisingly, traditional car manufacturers accounted for only 5% of all investments in the industry
How big is the shared-mobility market?
In 2019, the shared-mobility market accounted for $130 billion to $140 billion in global consumer spending. E-hailing dominated with over 90% market share, generating $120 billion to $130 billion. Car sharing and peer-to-peer car sharing made up less than 10%.
E-hailing experienced significant growth, tripling ride numbers from 2016 to 2019. Shared micromobility, including electric scooters, skyrocketed from under 1 million trips to over 160 million trips in 2019. Projections suggest that by 2030, micromobility could reach a spending potential of $300 billion to $500 billion globally, surpassing the current e-hailing market size.
What investments are being made?
Since 2010, shared mobility companies have received over $100 billion in investments. Venture capital and private equity players contributed around 72% of the disclosed investments, emphasizing their belief in future opportunities. Tech companies accounted for approximately 21%, while automotive companies represented only about 4%. E-hailing brought in more than $95 billion in investments, with a focus on the top three global players: Uber, Lyft and DiDi.
Shared micromobility experienced remarkable growth, garnering investments exceeding $9 billion and emerging as the second-largest segment. Car sharing investments totaled around $3 billion, reflecting market dynamics. Investments in advanced air mobility, particularly flying taxis, exceeded $8 billion, signaling the potential for transformative developments. Some shared mobility startups now rival or surpass the market capitalizations of traditional automotive companies, highlighting their significant market value.
The consumer
Globally, private vehicles remain the favored mode of transport, with 67% of respondents using them frequently. E-hailing is highly popular in Brazil, China, and the United States, with 90% of Chinese consumers using it weekly.
Convenience drives the preference for shared mobility, particularly e-hailing. Safety, competitive pricing, and availability are key factors for consumers, with availability being crucial in replacing private car ownership.
Commuting preferences vary, with private vehicles preferred in the US and shared mobility gaining traction in China. Looking ahead, more than half of respondents are open to robo-taxis, showing a willingness to embrace future mobility solutions. Brazilian and Chinese consumers show the highest inclination to adopt robo taxis and shuttles.
Where is the shared mobility market headed?
The market is heading towards a dynamic and transformative future. Investments in shared mobility companies have already surpassed $100 billion, showcasing the significant interest and potential in this sector.
Consumer preferences highlight a strong inclination towards convenience, safety, competitive pricing, and availability. As new mobility modes, such as robo taxis and flying taxis, gain momentum, we can expect a shift in the market landscape. This evolution will depend on regulatory developments, technological advancements, and widespread consumer adoption.
Additionally, the rise of self-driving trucks is revolutionizing logistics, while car sharing continues to evolve. With these advancements, shared mobility is poised to reshape urban transportation, offering innovative and efficient solutions for the future.
Conclusions
With over $100 billion in investments and consumer keenness for further adoption, the potential for growth and innovation is undeniable.
If you’re feeling inspired and perhaps would like to enter the e-hailing market, why not learn how to build an app like Uber?
Also, check out how we’ve left our mark on the industry by developing a cross-platform mobility app for Bussr.
Should you need a hand at building your own shared mobility app, simply drop us a line at hi@rst.software, and we’ll take it from there.
