RESEARCH REPORT

In brief

In brief

  • Mobility services are part of an ecosystem with stakeholders, values and vendors, falling under the category of personal service and public utility.
  • They have emerged as a hybrid between private and public transport, combining convenience and high vehicle utilization.
  • Mobility services offer an unusually strong set of advantages across individual, societal, environmental and economic dimensions.


Unlock the value of mobility services – Part 1 of the story

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The transportation network has prioritized private vehicle use since public transport is not very responsive. Each business model has some externalities which have not been factored in so far.

The key barrier to profitability

Regulators tend to treat mobility services and private transport as similar entities, ignoring the potential value these services offer society. At the same time, providers themselves hinder a profitable market. Their business models are largely designed to lock in customers and grow the user base while risking intense price-based competition. Mobility companies fail to recognize that their services more aptly resemble public utilities. What’s more, mobility apps and data aren’t seamlessly integrated with platforms or data sources, and business models rarely tie into city traffic and public transportation management. But these aren’t the only profitability challenges that today’s mobility service business models face.

Maximizing value

Mobility services require integrated collaboration across a wide range of stakeholders and ecosystem players. Service providers and cities must work together to build open-ended platforms and maximize the value for end users. They should be region- and city-specific, support different modes of transport and provide users with access to a variety of providers. This can possibly shift the market from its current dysfunctional state into a balanced ecosystem that benefits all.

If there has been a silver lining in mobility’s collapsing business-as-usual during the COVID-19 outbreak, it has been service providers’ response—demonstrating the societal value that companies can offer. For example, MOIA continued to operate a small fleet of demand-responsive shuttles during evening hours in Hamburg to compensate for reduced public transit.

New digital mobility

Defining mobility services

The term “mobility services” refers to new, digitally enabled offerings. These can be clustered into three groups:

1. New ownership models

New ownership models, consisting of subscription-like services.

2. Vehicle on Demand (VoD)

Vehicle on Demand (VoD), including car rental, car sharing and micro-mobility services such as bike or scooter sharing.

3. Mobility on Demand (MoD)

Mobility on Demand (MoD), which refers to demand responsive transport (DRT), ride hailing and ride sharing.

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Mobility services also share common requirements for success. For example, they must be highly available, easy to use, and integrated with cities’ traffic and public transport systems. Existing market regulations, however, restrict opportunities to capture mobility services’ full value and represent a key barrier preventing mobility’s profitability.

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