Next generation mobility systems: More efficient and more personal

– by Prof. Dr. Wolfgang Gruel

The mobility industry is in the middle of a dramatic transformation. New technologies and business models have evolved and challenge the status quo in this industry. Startups like Tesla or Byton offer alternatives to internal combustion engines, car-sharing systems (e.g., car2go or Zipcar), and ride-hailing-systems (e.g., Uber, Lyft, or Ola) help to better use existing assets and make the need to own a car more and more obsolete.

And there are even bigger changes on the horizon: Most big car companies, several IT companies and a lot of startups such as Nutonomy, Optimus Ride, or Pony.ai are working on self-driving vehicles. New vehicle categories have created a buzz, and companies like Pal-V or Volocopter are even aiming to conquer the air.

However, most of these initiatives still focus on an isolated value chain and a specific mode of transportation. They do not consider the opportunities that are opened by a seamless integration of different mobility services. A dynamic configuration and adaptation of different services can potentially meet customer needs better and at a lower cost. The goal of an integrated system is to combine the benefits of different modes: Mass transit is a great solution for moving a lot of people from one point to another at a fairly low cost. Having you own car is more flexible, but it comes with congestion, long search for parking space, and high expenses on a mostly parked asset. Walking or cycling are sometimes less comfortable options, but they are cheaper and often independent from inconveniences such as traffic jams or timetables, which makes them the most reliable form of personal mobility.

A combination of different mobility options might be the optimal option for a customer’s current mobility needs. If you want to go from a suburban area to the city center, it may be best in terms of price, convenience, and time to be picked up by a taxi which you share with three other people, then change to the subway, and finally take a short ride on a rental bike to get to your destination.

Ideas like that are not new – they have been discussed as “intermodal transportation” for a long time. Developments in information technology have brought this idea closer to reality. Providing customers with a seamless experience and better using efficiency advantages requires the adoption of a holistic perspective that combines joint planning, integrated usage, pricing, and payment.

The framework of “mass customization” pioneered in other industries can be helpful at develop- ing such a holistic perspective on mobility systems. Mass customization refers to the production of goods and services that meet the needs of individual customers with near mass production efficiency. Systems for mass customized mobility aggregate and predict the needs of millions of individual users in order to create mass-produced but personalized solutions for these users.

Operators of mass customized mobility services are facing two major challenges. First, they have to identify personalization options that create customer value. They need to determine which options are most crucial for their users and which limitations they will accept. Secondly, they have to create and maintain robust “production processes” that are capable of dealing with the almost infinite product variety resulting from mass customization in order to deal with each case with the same level of efficiency.

Mass customized mobility systems have the potential to transform the existing mobility industry as they offer more personalized, and user-centered services. This offers ample new business opportunities for established companies and for startups. For example, the creation of new tools using artificial intelligence might help to navigate choice and identify context-related personalization parameters. Also, better integrating mobility services in messenger services and voice assistants might help to learn more about customer needs.

In order to create robust process across company borders, existing and new mobility systems need to be rewired dynamically. This requires well-designed programming interfaces to exchange real-time data, as well as mutually beneficial business models and contracts. Also, there is a need for new types of adaptable vehicles, and physical interfaces (mobility hubs). The focus of value creation will shift away from single modes to a network along the customer journey.