The Arthur D. Little analysis has recommendations for regulators, cities, taxi firms and ride-hailing companies, among others.
On-demand mobility is yet to achieve its full potential and all stakeholders must “re-invent” if the challenges are to be overcome, according to a new report from management consultancy Arthur D. Little (ADL).
Rethinking on-demand mobility explores the future of ride-hailing platforms such as Uber, Lyft and FreeNow, traditional taxi providers, public transport operators and regulators, analysing the opportunities and threats for all of them.
Several public transport operators are piloting on-demand shuttle services integrated into their public transport networks, and major platforms are also offering ride-sharing services, such as UberPool and Lyft Shared.
ADL forecasts that the need for on-demand mobility services will soar in the coming years, and their operational margins should improve. Furthermore, it predicts that the progressive introduction of self-driving technology and artificial intelligence will increasingly "blur the boundaries" between public and private mobility solutions, particularly through the introduction of self-driving ‘robo-taxis’.
ADL forecasts that the need for on-demand mobility services will soar in the coming years, and their operational margins should improve.
In this context, the report offers several recommendations for the industry. It finds that regulators need to adopt a ‘test and learn’ approach to create a level playing field for all, to benefit consumers and cities alike.
It also concludes that ride-hailing platforms must "explore opportunities to improve their positioning" and find a way to turn a profit.
Traditional mobility providers, particularly conventional taxi companies, are urged to transform themselves to differentiate and stay relevant. The report calls for mass transit operators to investigate how on-demand mobility can complement, or even replace, public transit.
François-Joseph Van Audenhove, partner and global head of the Future of Mobility Lab at Arthur D. Little, said: “In a short period on-demand mobility has transformed, moving the market from conventional taxis and private hire vehicles to the ride-hailing platforms now available in cities around the world.
"In a short period on-demand mobility has transformed, moving the market from conventional taxis and private hire vehicles to the ride-hailing platforms now available in cities around the world."
“However, despite its progress, on-demand mobility is yet to achieve its full potential of improving the overall performance of urban mobility systems. At different levels, all players face challenges and need to reinvent themselves if they are to deliver the key benefits of improved relevance, quality and performance, leading to enhanced consumer experience and sustainable business models for all.”
Sacramento Regional Transit District (SacRT) recently launched what is claimed to be the largest on-demand public transit system deployed in America to date with mobility solutions company Via.
A study last year by the Boston Consulting Group concluded that on-demand microtransit could cut city traffic by up to 30 per cent, based on studying services operated by Via (Via shared data for the study but did not sponsor or pay for it).
An article in Wired recently noted that several cities, including Helsinki, Los Angeles, Shanghai and Singapore, have been experimenting with on-demand buses but generally are “not seeing a lot of success”, due to challenges with attracting ridership, cost of operation and complexity, as well as the digital divide in some areas.
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