When was the last time you woke up in the morning excited about the electricity that powers your alarm clock? Or stepped into a warm bath after a long day, thrilled at the idea of water being delivered to your home? If you live in the U.S., chances are you never think about either. We take public utilities like electricity and water totally for granted nowadays—their reliability triggers no intense emotions (well, at least not until you get a horrendous bill or there’s a power outage).
Cars, of course, are a world apart. There is quite a significant group of car enthusiasts who get that rush of excitement every time they power up the engine; some of us even name our vehicles (mine’s “Pumpkin.” No comments please).
Is it even remotely possible that in our lifetime we will feel the same way about cars that we do about public utilities?
How—and when—will we get there?
Mobility-as-a-Service (MaaS) is already quite popular. In large metropolitan areas like New York, Singapore, or San Francisco, it’s catching on fast. Car ownership is dropping among younger crowds (younger Millennials and older Generation Z), especially those living in cities. According to Wordometers, by 2030 60% of our 8.5-billion population will be urban. That’s over five billion people. These mega-city inhabitants enjoy the ability to move around but like to avoid the pain of parking in downtown areas or paying fees to park in garages just to get home. Given the adoption rates of car-sharing and of short-term car rental programs, we can assume these lifestyle preferences will only become universal. And given these trends, it’s likely that by 2030, the majority of those five billion urban dwellers will be summoning a vehicle several times a day (via a smart wearable rather than a smartphone or watch).
The introduction of full autonomy (Level 4 NHTSA) in the personal transport sector will likely cause a drop in ride prices and should catalyze even quicker shifts in the mobility market. Since the majority of current OEMs and a handful of startups announced the introduction of fully autonomous vehicles by the early 2020’s, we can expect the MaaS concept to go mainstream in five to ten years.
It might be a bit premature to discuss viable business models for future autonomous mobility (pay-by-ride, timeshare, or monthly subscription) but we can say with a fair degree of certainty that the standard KPI’s used to compare players in the mobility market will include monthly active users and passenger miles travelled (rather than cars sold).
So if we assume that two thirds (so 66 percent) of a future urban population will use MaaS we arrive at almost 8 trillion annual passenger miles worldwide. These urban passengers will be less likely to pay attention to the horsepower, vehicle performance or fuel efficiency of the vehicles taking them to their destinations. They might, in fact, come to regard autonomous mobility much in the same vein as we do all public utilities today.
Key considerations for utility clients
Future mobility-as-a-utility users will most likely take these six elements into consideration:
- speed of service
- in-vehicle experience
Above all, similar to what you expect from your water or electricity provider, your future mobility provider will need to be reliable and ensure safety. After all, no one wants to have to wait for their energy or water to turn on; we all want and expect it now. Each provider will need to meet the reliability and safety criteria set by the market or else they will be condemned by consumers.
Price and speed of service will help create customer segmentation. The importance of these factors will vary for the different segments of the mobility market: i.e., price-sensitive clients can choose a ride-sharing option (e.g. a small minibus/van) that might take more time but costs less, while time-sensitive clients will be willing to pay more to get to their destination fast.
Price-sensitivity vs time-sensitivity is likely to continue as a general segmentation criterium for MaaS users; however, there will likely be other ways to decrease ride prices and thus serve an even broader group of users. For example, marketers are already coming up with concepts to use riders’ time to promote their products and services, so rides subsidized by advertisers could serve as a way to win customers in the ultra price-sensitive segment.
It’s the in-vehicle experience that will enable service providers to differentiate themselves from competitors. Carefully personalized, non-creepy service offerings that make the most of users’ valuable time while serving their interests will allow service providers to charge premiums. One thing to remember is that “valuable time” means different things for different people. Some of us will opt to be productive and treat the MaaS ride as an extension of our office, while others will prefer to relax and watch TV/Virtual Reality. Another segment may want to explore the city with the help of Augmented Reality, while still other will simply choose to catch up on their sleep. Of course, it’s very possible that the same person may want all of the above at different days within the same week! Being able to know what each customer wants and adapt quickly to the current demand is what will help service providers win market share.
Currently, the in-vehicle experience, the ultimate differentiator, often comes down to driving performance. To win the interest of two thirds of the future urban commuter population, OEMs need to substantially refine their modus operandi. For a preview of what’s coming down the road for future mobility providers, be sure to check out my upcoming blog post, and follow my AUTOnomous scoop.it platform for curated news on the future of mobility.
And if you’re wondering what will happen to the other one third of the 2030 urban commuters who choose not to jump on the mobility bandwagon… well, they might just opt to try out human drones.