Uber's competitors shift mobility to the fast lane

In August, Uber passed the 500 million rides mark in India. In under four years, the company has expanded to 29 cities and worked with close to half a million drivers. India’s homegrown competitor, Ola Cabs, is growing just as rapidly. But despite the sheer volume of attention — and business — that these companies have garnered, the disruption in urban mobility today goes deeper than the taxi industry.

According to Tracxn, a start-up tracking platform, 2,436 companies were founded globally in the transport technology sector in 2016. Of these, only 125 operated in the on-demand taxi space. A recent evaluation conducted by WRI India confirms the diversity of the field, finding that so-called "new mobility" companies are making an impact in four broad categories.

Mapping new mobility

New mobility is a loose term that refers to models using technology to deliver transport in new ways. The most talked about disruptions have centered on re-inventing ownership and delivery, using data and connectivity in new ways and reducing or even eliminating the use of non-renewable resources.

As is true of all markets amid a major disruption, there is little clarity today on how these models will affect cities tomorrow. What is clear, however, is the need to understand the change, indeed to "count it" — to track its evolution, evaluate its impact and identify risks and opportunities.

WRI India recently reviewed the business models of 150 companies that applied to our accelerator programs between 2014 and 2017. We also interviewed representatives from 60 companies, including start-ups and business units within larger companies. Based on these reviews, we then classified the companies into 21 categories based on criteria including target audience, services offered and business model. The 21 categories were grouped based on additional factors such as area of disruption, technology employed and potential impact to arrive at four major areas of activity.

These categorizations can help us understand the various ways new mobility is changing urban transport.

Shared mobility

Shared mobility refers to models in which transportation options are shared among users, such as Uber, Lyft and Ola Cabs, and was indeed the largest sector. While all mass transit and public transit modes are essentially shared modes, the term "shared mobility" is often colloquially used for models in which the sharing aspect has been accelerated by the use of mobile technology and smartphone apps. There are a further three categories of shared mobility models:

• Ridesharing is the simultaneous sharing of transport services among commuter traveling in the same direction at the same time. It includes carpool, taxi share, auto-rickshaw share and bus aggregator.
• Ride hailing or ride sourcing refers to for-hire-vehicles setup using the internet that are used consecutively by commuters, such as taxis, motorcycle taxis and auto-rickshaws. These companies are referred to as aggregators and on-demand companies in India.
• Vehicle sharing is the consecutive use of assets without ownership. These models allow commuters access to vehicles such as bicycles, cars and motorbikes for short periods of time.

Commuter experience

Commuter experience refers to models that somehow support an improved mobility experience for users, often via information sharing that helps people make better decisions. In India, private enterprises have emerged in two areas:

• Seamless information and payments includes models that give commuters scheduling, trip planning and congestion information across modes and the ability to pay digitally for public transport and privately provided ride services.

• Commuter safety and security covers models or technologies that provide support for drivers, vehicle diagnostics, ride monitoring and crowdsourced safety perceptions, with a focus on women’s safety.

Product innovation

Product innovation refers to businesses that are working to modify or improve transportation assets and vehicles. In India, activity has been limited in this segment, but is expected to grow on the back of the government’s recent electric vehicle commitments (PDF). We have mapped businesses across three main segments:

• Alternate engines and fuels are mostly technological innovations across electric auto-rickshaws, two-wheelers, compact vehicles, hybrid buses and electric vehicle charging infrastructure.

• Bicycle innovation includes the recent emergence of early stage companies manufacturing electric bicycles.

• Autonomous technology for vehicles is a segment generating buzz in India, led by a driverless car challenge by leading automobile manufacturer Mahindra.

Data-driven decision-making

Data-driven decision-making refers to models that use technologies such as sensors and GPS data to provide additional insight to drivers and planners. This is a nascent segment in the Indian market with a few niche products emerging from early-stage companies and bespoke solutions from large IT companies. Two major categories so far are:

• Insights for businesses, including models using data to support better fleet management and driver safety, vehicle maintenance and routing analytics.

• Insights for city administrators such as models helping city agencies with traffic management, road maintenance and integrating services.

Implications for cities

Advocates of new mobility credit the kinds of business outlined in the survey with a host of positive changes, including improving access to transport services and shifting people from "just in case" vehicle ownership to "just in time" vehicle access. On the flip side, skeptics have raised concerns about the impact on vehicle kilometers traveled, emissions and congestion.

The uncertainty and high stakes of the new mobility transition for cities and people are described by Robin Chase, co-founder of ZipCar and WRI board member, as a "heaven or hell" scenario.

"We get hell by taking a wait-and-see approach," she said. Autonomous vehicles replace the private car and it becomes cheaper to have yours circle the block or drive home instead of parking. Autonomous delivery vehicles replace storefronts. Drivers of all kinds lose their jobs, despite more cars than ever on the road. And tax revenues that support road infrastructure plummet.

If most autonomous vehicles are operated in shared fleets and offer shared trips though, things could be different. "Instead of spending $9,000 a year on your own car," Chase said, "when we combine car sharing and ride-hailing and buy a seat in a shared autonomous vehicle, we can get door-to-door transport at the speed of private car travel for the cost of a subway ticket. This transforms people’s access to opportunity."

City administrators everywhere are struggling to craft appropriate responses in this rapidly shifting landscape. In their quest to be more equitable, productive and sustainable, cities must set a vision for what they want to achieve (such as the Shared Mobility Principles for Livable Cities), rather than letting technology set the agenda. They must also use all the policy tools at their disposal to shape outcomes: regulatory; infrastructural; and financial. This will require convening and coalition building, re-thinking investments and leveraging new technologies to upgrade formal and informal transport systems.