RESEARCH REPORT

In brief

In brief

  • Despite significant investments and growth, many leading transport companies have not cracked the code on how to profit from mobility services.
  • We set out to understand the burning question among mobility service providers—how to unlock value and build profitable mobility service offerings?
  • Our research revealed a key barrier to profitability that is common across all business models—the absence of a balanced marketplace.
  • Together, market players can usher in a new age of mobility that benefits citizens, cities, and automotive and mobility companies themselves.


Behind the research

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New rules for a new game

A balanced market in which various services and transport modes compete fairly and collaborate efficiently is vital to building and sustaining mobility services’ profitability. Such a market should accommodate services so they can capture value across all four dimensions—value to the individual, society, environment, and economy.

Cities and regulators also play a significant role in building a balanced market. They can enable the integration of mobility services or incentivize providers through specific regulations. Furthermore, they can directly influence some of the key cost levers of mobility services through pricing of public space (e.g. on-road parking) and infrastructure (e.g. roads or waterways). This internalization of the cost of infrastructure is already common practice for practically all other modes of transport and is expected to be increasingly implemented in urban areas—as London and other cities have already done. But any regulation should reflect societal value and be equitable for all participants.

Optimize mobility across the fleet

The core of mobility’s profitability relies on uptime and efficient use of vehicles. To maximize both, service providers should pool their fleets into a single, seamless platform. Today, most mobility companies operate separate services within their fleets. By combining all fleets, mobility companies could improve their vehicles’ uptime and maximize profits. Additionally, companies can optimize fleet utilization by using artificial intelligence (AI) and analytics. Both technologies support mobility applications such as predictive maintenance and demand forecasting.

During COVID-19, service providers diversified their offerings to increase fleet uptime. Uber and Lyft (in the US) and DiDi Chuxing (in China) started transporting goods, providing drivers an alternative business as demand for ride hailing plummeted.

Pivot from your core product

Service providers should avoid segmenting customers along vehicle ownership and mobility usage. Instead, they may find it more effective to adapt to the changing demands and values or mindsets of customers. After all, service providers risk losing customers to competitors if they don’t guide their customers along a transformational journey. Mobility players need to build close-to-ownership models that reflect existing services, while public transport providers need to focus on innovating their services.

Mobility Spectrum

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