From Microtransit To Mobility As A Service: The Disruptive Future Of The Automotive Industry

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The automotive industry has been making quiet but significant moves in recent years.The increase in investment in autonomous cars by both automotive and tech companies has been substantial, with a staggering $80 billion invested according to recent estimations. This is all part of a bigger shift in society set to rock our fundamental understanding of what constitutes the personal vehicle.

And you can see the seeds of this transformation everywhere. Rinspeed, a Swiss car maker, has been working with Samsung on the RinspeedSNAP, chipmaker Nvidia is working with both Uber and Volkswagen on GPU computing technology, Google recently announced Waymo and no one is completely sure what Apple is up to. Huawei has even taught a smartphone how to drive a car!

This is a massive shift in one of the cornerstone aspects of everyday life. Unlike most of the big changes brought on by the virtual revolution, this is very much within the physical realm. And any dramatic change to how we currently transport ourselves or goods, be it through private or publicly available sources, will have dramatic ripples throughout our society. Hence, this is going to be a long-discussed and prepared for change.

Yet, while companies are investing and debating the future of the industry, the vast majority of the public is still unaware of what their next move should be. Should they hold off on buying their next car or even driver’s license? There are tips available out there on how to prepare yourself for eventual changes, however, more and more of these conversations seem to revolve around two key ideas; microtransit and mobility as a service.

What is microtransit?

As many experts in and around the field are quick to inform you, microtransit is far from a new concept. The US Department of transportation has it defined as “a privately owned and operated shared transportation system that can offer fixed routes and schedules, as well as flexible routes and on-demand scheduling. The vehicles generally include vans and buses.”

When thought about like this, there are a few things to note which distinguish it from public transportation. The first and most notable is that it is privately run. However, this does not mean there is no governmental engagement. A more accurate designation of microtransit is that it straddles the line between privately owned vehicles like cars and publicly run and funded services like buses and trains.

This is because most microtransit systems aren’t there to actively compete with public transport, but to assist or extend it. This can either be to help reduce congestion on existing public transport links or to help reach secluded groups of individuals in more sprawling locals.

Mocrotransit systems have been put in place with varying degrees of success. One was launched in Kansas City in 2016 in partnership with Bridj (a private commuter shuttle business) with little success. It had such low ridership levels, it was estimated each ride cost $1000. Another similar program failed in Santa Clara , also due to low ridership.

And while there are examples of slightly more successful programs being instituted, with more innovative uses of technology to help determine routes and help listen to customers, that isn’t the reason microtransit is being discussed with such fervor today. The real reason it is being floated again is that it perfectly aligns with a serious move many automotive companies are all pursuing…

Mobility as a service (MaaS)

Cash is no longer king on West Yorkshire’s buses – thanks to the range of smart and digital options people can use to pay for their travel such as @MCardtravel the number of cash fares is in decline. Next steps will be #MobilityasaService //t.co/TrmQJlqbQz #MaaS pic.twitter.com/JV2htyx4DA

— West Yorkshire Combined Authority (@WestYorkshireCA) May 25, 2018

As you can see, while people seem to be underestimating how very real the ‘self-driving car’ future is, companies and governments certainly aren’t, hence the prevalence of the above phrase. Automobile companies have played out this equation much further than the casual observer and they are no longer just talking about autonomous vehicles. They are now considering their ‘legacies’ as companies and beginning to fundamentally shift their business models.

Image courtesy of InMotion Ventures

This sentiment is being spread slowly by many automotive companies. Mr.Toyota announced at this year’s press briefing at CES that his “goal is to transition Toyota from an automotive company to a mobility company.” BMW has also dedicated more than a few pages to the issue on their site, covering topics from “what if an autonomous car causes an accident to “does this mean the end of “sheer driving pleasure”?

The idea seems to revolve around the notion that, at least to some extent, individuals will largely soon no longer own their own personal cars. Instead, these companies seem to be envisioning a world where we all share our vehicles as a part of a brand new, complex transportation service. Despite the undeniable benefits of such a system if adequately instituted (reduced traffic jams, pollution and, accidents), it’s still hard to imagine the current general public going along with it.

Image courtesy of InMotion Ventures

The future of mobility

It looks like the future of the automotive industry is a grand transformation from companies which provide individual modes of transportation to companies which provide some form of microtransit system. To pull this off, there are a host of new technologies and concepts which all seem to fit together in one gargantuan puzzle, with microtransits and autonomous vehicles but a few of the pieces. ‘Smart cities’ is a term on a lot of people lips nowadays and IoT’s potential is constantly expanding. It is predicted that by 2020, 98% of cars will be connected to the internet.

Image courtesy of InMotion Ventures

However, it will take more than technology to pull this off. A program to fundamentally shift the mindset of the general public will have to be instigated with the help of enterprise and governments. Driving is so integral to our culture in the West that these changes, be it from manually-driven to self-driving cars, or the death of the concept of vehicle ownership, will be a rocky and tenuous one. It is, however, a move that has already begun in earnest.