Mobility Marketplace

It’s 2020, and while we aren’t driving flying cars or zipping through hyperloop tubes, the future of mobility has never been more exciting. Urban-dwellers especially find themselves in the midst of a complex transportation ecosystem. New mobility business models have flourished over the past few years, effectively changing the way people move. With this proliferation of modalities comes a staggering amount of mobility choices, such as ridehailing, carsharing, eScooters, public bicycles and transportation. Although urban mobility options are blossoming, these transportation networks remain hyper-fragmented.

Few mobility services offer complete first-to-last-mile transportation. Taxi and ridehailing services may provide a door-to-door experience, but it is an unfeasible and unsustainable method for all riders. Mobility-as-a-service (MaaS) platforms attempt to unify transportation ecosystems in certain geographies to facilitate a seamless first-to-last-mile journey. This business model can provide an integrated, all-inclusive transportation platform by linking disparate modes of transportation, both public and privately owned, into a single interface. Consumers using MaaS apps can conveniently plan and pay for their preferred combination of mobility services to best reach their destination, but widespread adoption is hindered because public and private entities must agree to collaborate.

Maximizing Mobility

So which business model can provide value to all stakeholders in a city? The HERE Mobility Marketplace re-envisions the role of a MaaS provider as a host of a neutral marketplace. The marketplace seeks to link the fragmented transportation ecosystem by pairing mobility suppliers with demanders. Much like MaaS, this model has the potential to enable seamless end-to-end journeys, but it does not require full integration from all mobility service in a geography to succeed. With the next step in the evolution of transportation on the horizon, perhaps mobility is best left to the free market.

The goal of the marketplace is to foster a competitive transportation ecosystem that yields much higher efficiency than other business models. HERE’s philosophy on the marketplace is that all mobility solutions should be included, whether monetized or not. That means encouraging users to ride public transportation and to walk when possible. To achieve this goal, HERE links mobility suppliers with mobility demanders. Rather than having skin in the game, HERE remains a zero-asset neutral party. This allows HERE to reallocate resources that would otherwise be used to build a loyal base of drivers. They simply collect a commission from mobility suppliers upon the completion of each ride.

Making the Market

HERE classifies three types of mobility players that interact in its marketplace: mobility suppliers, such as taxi services, private hire, public transport, bikeshare, eScooters, etc.; mobility demanders, companies that would like to aggregate some services but hold the user experience within their app or product, like airlines, hotels, restaurants, arenas, or even Google Maps; and overarching players such as Uber and Lyft, which generate supply and demand and serve both mobility suppliers and demanders. HERE seeks to occupy a fourth position, remaining neutral to connect mobility supply and demand without bias.

The marketplace is a viable platform as long as several modes of transportation are connected. As the marketplace grows over time, it can include more modes and improve as the network effect grows. In the beginning of 2019, HERE already signed more than 500 partners to its marketplace. In that time, it amassed 1.4 million vehicles – roughly the same number of Lyft vehicles. With much of Europe already covered, HERE launched an aggressive U.S. rollout in 2019. Las Vegas, Los Angeles, New Orleans, and New York City are just a few locations HERE debuted as it launched in 5-10 new cities a month. Canada, South America, and APAC expansion were also key markets.

The momentum of the mobility marketplace has been impressive. Through the end of 2019 HERE recorded over 1 million kilometers driven. Entering 2020, HERE garnered over 700 supply and demand partners worldwide, realizing 150% growth. Today, the mobility marketplace boasts over 2.5 million vehicles in over 100 cities worldwide. Optimism continues to grow as recent partnerships with ARC Europe Group and Wirecard bolster first-to-last-mile transit options and digital payments, respectively.

Adding Value for All

HERE is confident that the marketplace has the potential to add value to all participants – riders, mobility suppliers, mobility demanders, and municipalities. Riders benefit from being able to compare multiple modes of transit in a single widget, app, or interface. Mobility suppliers such as ridehailing and taxi services benefit from additional rides. Mobility demanders such as airlines, restaurants, healthcare services, arenas, and employers have direct access to multiple mobility service providers at no cost.

Even municipalities have been receptive, as HERE’s platform provides access to vast amounts of real-time data, which is incredibly useful for strategic planning. This data helps cities understand how, when, and why people move. In turn, this helps cities build better services for consumers and maximize utilization of public transit and infrastructure, a win for the entire mobility ecosystem. Smaller mobility players can also utilize HERE’s data and technology to enter the market and compete with Uber and Lyft, which keep such data to themselves.

Socializing Mobility

The HERE Mobility Marketplace is not yet available in all geographies, but HERE does offer another mobility platform to solve the woes of commuters and carpoolers. In hopes of helping and encouraging people to move together, HERE’s solution lies in their social mobility platform, SoMo. HERE recognizes communication is a key breakdown in this process. SoMo is a platform that can alleviate this pain point as a social network that fosters communication for those in need of mobility solutions.

SoMo seeks to identify the moments in life where people really want to cooperate but can’t. Gatherings such as weddings, concerts, sporting events, extracurriculars, or even going to work present opportunities where participants might want to cooperate. This platform provides the means to communicate, organize, and identify people you may know attending the same gathering and plan a shared ride, whether it’s carpooling in a personal vehicle or taxi, taking the bus or walking together.

Moving Forward

The success of the Mobility Marketplace and SoMo platform can be measured by the number of miles saved. That is, actual vehicle miles traveled (VMTs) that have been reduced through the platform. The mobility dispatch technology allows transportation network companies to use smarter routing and deployment to reduce the amount of time vehicles spend looking for rides and completing them. Last year, a partner in Chicago reduced miles driven by 10% while performing the same tasks. VMTs saved on SoMo are calculated based on the number of passengers sharing a vehicle; therefore, if three passengers make the same 10-mile journey, 20 miles are saved due to carpooling. With an average of 1.1 passengers per vehicle, personal vehicles are heavily underutilized and mobility habits are far from sustainable. The Mobility Marketplace and SoMo have the potential to improve mobility habits but, ultimately, riders decide which mobility solutions succeed. With that in mind, HERE learns from the mistakes and builds on the successes of mobility players to provide a platform that best serves consumers and companies.

About Nicolas Inchaustegui

Nicolas Inchaustegui is a Senior Mobility Consultant within the Automotive, Transportation, and Mobility practice at Frost & Sullivan. Bringing his experience from the private and public sectors, such as OEMs and urban cities, he provides a valuable perspective on new mobility business models and their influence on transportation ecosystems.

Nicolas Inchaustegui

Nicolas Inchaustegui is a Senior Mobility Consultant within the Automotive, Transportation, and Mobility practice at Frost & Sullivan. Bringing his experience from the private and public sectors, such as OEMs and urban cities, he provides a valuable perspective on new mobility business models and their influence on transportation ecosystems.

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