Handover of Mobility Services

In the blog post about the availability dilemma we discussed why a lack of cooperation leads to massive oversupply – and in consequence to congestion of cities and more emissions as studies from Bruce Schaller and others have shown.

This post now outlines how mobility providers could make use of the combined resources of transport service providers while still keeping up competition: like with roaming in the mobile phone industry, providers would use the same resources for their offers.

Handover of mobility data for roaming
A standardized handover of mobility data is needed for mobility service roaming.
Image (c) Wavebreak Media Ltd.

Let’s take a look at similar situations in more mature industries:

Code Sharing in the Airline Industry

The fierce competition in the airline industry has a positive notion: airlines need to maximize the utilization of their airplanes and so maximize transport efficiency and keep air traffic and emissions to a minimum with a given demand.

Code sharing, the individual retail but joint use of a flight, helps airlines to reach this goal. The cooperation of different airlines in code sharing alliances is a logical consequence.

In addition to this institutionalized cooperation, most airline’s yield managers have also understood that it is better to overbook a plane’s seats and pay the few rejected surplus travelers tickets for flights from the competition, rather than having too many empty seats in a plane.

Call Roaming in the Mobile Phone Industry

If every mobile phone provider would have to build their own transmission infrastructure, probably none of them could work profitably and the landscape would be cluttered with a multitude of radio masts. In this industry it is common that the infrastructure providers offer bandwidth to retailers and competitors as paid services. “Handshake” standards have been established to hand over a customer’s call from one provider to another even without losing the connection. An equivalent MaaS protocol would also be needed to assure the handover of travelers between Transport Service Providers (TSPs).

Roaming in the Mobility Industry

Shared Resources in Ride Hailing

In some regions ride hailing companies don’t brand their cars and allow drivers to work for multiple TSPs. This often leads to a setup in which drivers work for many TSPs at once – having all their apps open and picking the rides which suit them best.

This car drives both for Lyft and Uber. (c) Jonathan Weiss

Although this is not roaming, it still has a positive effect: such a setup would still lead to oversupply through a density inflation but it would not multiply this oversupply with every active provider.

“Density inflation” happens if TSPs compete for the best availability of their offers. Customers get used to an even higher availability of cars so that providers need to further increase the car density, inflating their numbers.

In case ride hailing companies require exclusivity, the “multiplication effect” comes on top as each TSP needs to provide the same density of cars to remain competitive. If municipalities do not prohibit such exclusivity clauses, they will face a congestion increase as a logical result.

A ban of exclusivity clauses for ride hailing companies would be a first step to reduce unnecessary traffic as it would prevent the multiplication effect. If municipalities also want to avoid the density inflation effect, they need to require TSPs to fully share their resources, so that availability will no longer be a competitive advantage and every provider will have the same availability. Competition will instead happen for other aspects of their offer. This approach will lead to “coopetition” – cooperation and competition at once.

Mobility Service Roaming

Roaming in the mobility industry can be seen as the concept of sharing vehicles with competitors while maintaining the customer relationship.

In case a competitor has a vehicle closer to the passenger, the passenger would likely be better served by the competitor. But instead of losing a ride to the competition, the first provider can still offer this ride using another TSP’s car. At the same time this ride would increase the competitor’s car utilization. These efficiency gains reduce the TSP’s costs, which allows them to share part of these gains with the original provider. Ideally the TSP increases profitability while allowing the original provider to take their share as well. A classic win-win situation for both providers – and for the passenger, the city and climate as well.

Example on how a provider makes use of other provider’s cars closer to the passenger

The margins in ride hailing are tiny and time matters. So the roaming must not require any expensive and slow human interaction and needs to be fully automated. Therefore roaming of mobility resources would require a standardized Mobility as a Service protocol and process, which covers all aspects of a ride:

  • Matching of all customer requirements
  • Communication
  • Service provision and pot. disruptions
  • Billing and payment – both on the passenger side and on the TSP side
  • Duty of care and quality management
  • Customer care

When competition no longer happens through a higher availability of cars on the street, other factors become more important:

  • Brand: who “owns” the customer?
  • Accountability: will the roaming rides be labelled as own rides (white label) or will it be openly labelled as a competitor’s ride?
  • Quality: who is able to best manage the supply and all backend services to meet customer’s expectations?
  • Customer service: who can help when things go wrong?
  • Digital product experience: who has the best app?
  • Pricing: the bigger the customer base, the better the economies of scale – and the negotiation power for price leadership
  • Mobility service integration? who offers the most mobility options? This will be a topic for one of the next blog posts.

All these aspects still leave sufficient room for competition and product differentiation while mobility service roaming would create a win-win-win situation for all participating providers, the customers, the cities and our climate.

Mobility Service Roaming
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