Carsharing, ridehailing and -pooling have been hit hard by COVID-19. Many companies are temporarily shifting from moving people, to moving literally anything else – medical supplies, food, even packages. But every crisis is a test, and an opportunity – a test of flexibility and resilience, and an opportunity to rebuild businesses for the future. Powered by the desire to build a more intelligent mobility environment, Generation.e will bring together decision-makers from both the public and private side at Smarter Mobility Europe to explore how can we leverage the impacts of COVID-19.

In the case of ridehailing, “rebuilding”, we must include the vehicle itself. Ridehailing companies over the world have taken quick and aggressive action to protect their drivers, their passengers, and their revenues. Most have provided protection kits for drivers and offered them to work on alternate gigs, such as food delivery. With that, they’ve on the one hand expanded their offering, while on the other hand offloading unprofitable business models (such as micromobility).

Image: Neckermann Strategic Advisors. Data: OLA Mobility Institute

We need shared-specific vehicles

The crisis shines a spotlight on a more specific, long-term issues as well. Ridehailing is almost a decade old now, but most of its vehicles are still built for the driver, not the passenger. Why do dedicated, custom-designed ridehailing vehicles still not exist? The volume certainly supports it, and the thought is not entirely new – indeed, Neckermann Strategic Advisors has floated the idea before – even five years ago , noting that “electric autonomous vehicles will lead to a sheer revolution in transport design,” because “shared vehicles will have over fifty percent utilization rates (i.e. five times more mileage driven per year), significantly shifting the product design specification toward durability and utility.”
We firmly believe there’s a market for bespoke (custom-designed) shared vehicles, as:

1. Dedicated shared-mobility vehicle concepts could provide better integration between moving people and goods in urban areas
2. The passenger/driver convenience and experience can be enhanced, leading to an increased end-user utilisation rate and driver retention.
3. Safety will be a major concern post-COVID19. We need to take the bull by the horns.

Demand for custom-designed sheetmetal:

There are over 220k private hire vehicles (2019) in England alone. Just in London, barely among the top-25 most populated cities in the world, there are around 50,000 registered private-hire vehicles (and over half are from a certain provider of hybrid cars). In similarly populated New York City, there are approximately 100,000 private hire vehicles, also called For-Hire-Vehicles (FHV); many will never see another application outside of passenger transport. Depending on the study, the growth rate in ridehailing is consistently 10-20%. Globally, we are surely talking about millions of FHVs, with a utilisation rate (and thereby a replacement rate) far above the normal ratio for a private vehicle. The market represents hundreds of thousands of possible vehicles to sell per year.

For a shared vehicle, branding, design, personalisation possibilities and so on are worth almost zero. Does this create an entry door for new players manufacturing white label vehicles?

Why haven’t OEMs jumped at this? Key issue is likely that branding, design and any other fancy personalisation options are mostly irrelevant – only volume, cost, driver comfort, and to a lesser degree, passenger comfort plays a role. People simply do not care about the vehicle itself. Nobody orders an Uber because they are happy to ride in a Prius. Simply put: OEMs don’t like to bend white-label, low-margin sheetmetal.

Could it be a perfect entry door for new producers? Absolutely! In fact, as early as 2015, Neckermann Strategic Advisors have suggested that Foxconn, Amazon, Huawei and others could get into the game. A half-decade later, the time seems right.

What would an OEM bring to the table? Intuitively, the maintenance, repair and replacement requirement of shared-mobility vehicles is high, which could be an additional revenue stream for shared vehicle manufacturers. These needs, especially around after-sale services are still an area that OEMs excel at. While your private car stays 95% of its time parked, a Uber driver will be busy 60% of the time (stats from NYC).

The marriage between people and goods

Pushed to explore unfamiliar urban logistic territories, ride-hailing companies are now using one of the most useless spaces of their vehicles: the trunk (‘boot’ to UK-readers)!

Let’s imagine a world where specifically designed shared-mobility vehicles are running around in our city centres. What should they look like? In the midst of COVID-19, mobility operators are being pushed to explore unfamiliar urban logistic territories are now using one of the most useless spaces of their vehicles: the trunk! So the virus gives us a fantastic opportunity to reflect about a better integration between moving people and goods in our cities.
Consider the empty volume from the FHV trunks moving around every day in a city like London. It is equivalent to over 230 22-ton trucks…

Most of the time, when we use a ride-hailing service we put nothing in the back of the car. And if you do, it is most likely a cabin suitcase… When we really need space, we order a Van or an Uber XL. Let’s assume that amongst the 50,000 ridehailing vehicles in London, 40,000 are “normal” vehicles (no van, no luxury sedan…). To the roof, the Toyota Prius has a trunk volume of over 500L (over 20 cubic feet).

The cumulated capacity of these 40,000 regular ridehailing vehicles represents some 20,000 cubic meters that moves around the city, and the clock, almost empty. A 22-ton truck has (on average) a capacity of 85 m3. Just for London, the private-hire vehicle fleet drives around the volume capacity of 235 empty trucks!

With the underused volume, can’t we think about features to improve either the profitability of each ride, the driver comfort or the passenger convenience and experience?

The last-mile challenge, enhanced by working-from-home and online orders, is increasing the pressure on our urban mobility capacities. Fantastic apps (Via, Trafi, etc…) are able to intelligently plan vehicle journeys. Can’t we more effectively use the underutilised space in the (way) back of the car as well – not just because of COVID-19, but permanently? Not only would we reduce congestion, but it would improve the profitability of each ride, the driver comfort or the passenger convenience and experience.

Passenger/driver experience

Let’s have a look inside the car now. Think about the front passenger seat – what do we need it for? Ocado drivers and black-cab drivers don’t need it, why would the professional Prius driver? Perhaps the space can be used for heated (or cooled) storage for food and groceries?
What about the GPS screen – which is basically just used as space for a smartphone, in order to use Waze? What about the passenger vents, which are used as pencil storage?

Image: Chris Skinner

The front passenger seat always folded, the GPS screen used to fix the phone supports or the multitude of smartphones on the driver dashboard are examples of discrepancies between the shared vehicles and the driver/passenger needs

One of the challenges faced by ridehailing companies is to find and retain drivers. Especially during COVID-19, together with taxi chauffeurs or public transport drivers, we must consider them amongst the heroes at the front line of the crisis, keeping our world moving.

Let’s respect their contribution during this unprecedented time. And let’s focus interior research on the only two people that matter: the driver in the front, and the passenger in the back. And when we have done that, let’s consider how goods can be transported as well.

Safe rides

Smart mobility is a human-centric industry, but it is not exclusively for people. There is an increasing need to move goods efficiently, and in line with sustainability challenges. New mobility solutions within logistics can make a difference.
Some 30% of all global transportation-related CO2 emissions comes from multi-modal commercial transport (including air-sea-land). This, in turn, represents 7% of the global CO2 emissions across industries (energy production, manufacturing, …). At a European level, urban freight accounts for 25% of the carbon emissions and up to 50% of other pollutants (PM, NOx, etc.).
In terms of congestion, goods transport is responsible for one-fifth of all types of urban trips. Given the space requirement of logistics vehicles, the related effect on traffic flow becomes obvious.
While it is interesting to note the current impact on emissions and congestion, steps taken by the logistics industry today will be meaningful and effective in shaping our future.
Understanding today’s logistics challenges and opportunities for a better and smarter mobility world is one of the many objectives that SME LIVE aims to reach during its 3-day virtual summit. Through case studies, tech talks and panels, speakers and experts will highlight the latest developments in commercial mobility, and explore innovative freight transportation solutions.
Logistics is a large industry including a multitude of different modes of transport for extra- and intra-urban deliveries. Our aim is to shed some light on what is happening in city centres, and address what is called in the industry the “last-mile delivery challenge.”
Neckermann Strategic Advisors, Knowledge Partner of Smarter Mobility Europe, has identified six factors influencing a rise in last mile delivery challenges:

1. Urbanisation: A population growth rate of 1% per year is generally understood to be sustainable, but the reality is different in many growing cities. Many of the largest cities in the world have a growth rate of up to 5%. An ever-growing population increases the pressure on resources and governance, but also on transport capacity, both for people and goods.
2. Cost: delivering goods along the last mile is generally the most costly part of the journey, representing over 40% of the overall expenditures. It can be more than double any other category of expense, such as parcelling or warehousing.
3. Online shopping: a Capgemini report on last mile delivery found that “40% of consumers use grocery delivery weekly and this number is expected to climb to 55% by 2021”. Concretely, a company such as Alibaba expects to handle 1 billion packages per peak-day within the next decade. COVID-19 has accelerated this trend even more, which will result in increased tension, as deliveries increases.
4. COVID-19: The rapid shift from bricks-and-mortar shopping to home deliveries is likely to be sustained. From groceries to food and medical supplies, people are ordering more online than what they used to.
5. Sustainability: Environmental pressure due to pollution and economic drawback from congestion affect sustainability concerns. It is up to us to leverage intelligent mobility solutions to mitigate the negative effects.
6. Consumer expectations: Loyalty is positively correlated to efficient home deliveries. The faster the service is, the more we stay with a specific company. In its report, Capgemini found that 55% would increase loyalty to benefit from a two-hour delivery option.

Image: Factors influencing a rise in last-mile delivery challenges, Neckermann Strategic Advisors 2020

Electrification
The transport sector is one of the most polluting industries. The rise of electric vehicles is helping logistics stakeholders to reduce the global 5% CO2 emissions from freight trips. Luke Wake, International Director of Automotive Engineering & Advanced Technology Group at UPS, will share during the Summit how the American logistics provider plans to improve the sustainability of their deliveries of more than 5.5 billion parcels in over 200 countries every year. He comments “At UPS we already operate over 10,300 alternate fuel and advanced technology vehicles worldwide. As we look to the future of mobility in logistics, we will require a multitude of solutions to enable constant optimisations. We are ramping up the global deployment of commercial electric vehicles through our investment in ARRIVAL, where we are committed to purchasing 10,000 purpose-built electric delivery vehicles.”
Arrival is not the only electric van manufacturer to develop logistics vehicles. Incumbents such as Rivian and Street Scooters are also proposing solutions for urban deliveries. They have respectively agreements with Amazon and DHL to support them with the electrification of their services.

Alternate Modes
Many different modes of transport power urban deliveries (vans, cargo bikes, trucks, …). COVID-19 is an unexpected boost for the development and trial of new services. Drones, autonomous vehicles and new urban spare part logistics management are examples of what we can expect in the next few years to make our shopping and city life experience increasingly better.

Drones
The first airline drone delivery route was set up in Rwanda to transport medical supplies to remote areas. Zipline operates over 100 drones in Africa. Closer to Europe, in March 2020, UPS signed a partnership with Germany’s Wingcopter to develop urban autonomous delivery drones to face an exploding demand started with the surge in home-deliveries due to the COVID-19 crisis.

Image 2: Zipline

Image 3: UPS and Wingcopter vision

The American carrier capitalises on his experience with its pilot from 2019 where the company received the authorisation to operate a “drone airline” for hospital campuses in the US.

Image 4: UPS

Amazon has also been developing a drone delivery service since 2016. The American retail giant released specs of its Prime Air drone for cities, capable of flying 15 miles to deliver parcels under 5 pounds (2.3 kg). Volocopter, Vertical Aerospace and Airbus are developing their own vision of eVTOL (Vertical Take Off and Landing). They are all looking for creating a strong position in the future market for automated eVTOL that the bank Morgan Stanley estimates to €1.4 trillion by 2040.

Image 5: Volocopter

Autonomous deliveries
Imagine streets with small bots running around to deliver up to your front door your on-line order. Starship’s fleet of robots around the world has made 100,000 autonomous deliveries and driven more than 500,000 miles. During the COVID-19 crisis, Starship has been able to illustrate the benefits of autonomous technologies. In Milton Keynes for example, groceries can be delivered to your home for an additional fee of £1.

The first driverless trials – after the move from horse-carriages – takes us back to almost a century ago. In 1925, Houdina Radio Control presented its remotely controlled “Chandler” on Broadway NYC.

Image 1: Chandler Houdina Radio Control Co. on Broadway NYC, 1925

While this first attempt was not a great success (the car crashed into a car full of reporters and photographers), it likely marked the beginning of one of the biggest dreams humans have ever had: commuting with autonomous vehicles (AV).

For most of the last 100 years, it’s fair to admit that not a lot has happened in the development of such technology. Yet, the last decade has seen an incredible number of breakthroughs and new companies committed to making autonomous mobility a reality (over 60 companies have licenses for autonomous trials in California alone). This acceleration goes together with the transition from the traditional automotive industry into a new, more complex mobility ecosystem. Generation.e understands how important a holistic comprehension of the mobility value chain is to capturing the right challenges that autonomous vehicles are facing. The objective during the Smarter Mobility Europe LIVE is to leverage this expertise, to ask the right questions to the speakers, and go beyond what has happened to focus on what will happen in a post-epidemic world.

The mobility value chain

The traditional automotive value chain is outdated. The simple and condensed value-chain, with its limited number of stakeholders, is now being replaced by a mobility value-chain much more complex and diversified, in which people are at its core and not just customers.

Image 2: Traditional Automotive Value Chain, Neckermann Strategic Advisors, 2020

Within automotive, stakeholders refer to a “CASE” framework (Connected, Autonomous, Shared and Electric, sometimes also “ACES”). It relates to some concrete outputs of the Mobility Revolution, as they pertain to their industry.

CASE is useful for the automobile industry to understand what is happening, but it is limited in scope. At Neckermann Strategic Advisors (NSA), since 2013, we have believed in the birth of a new industry, as a result of the Mobility Revolution, with three “zeroes” as the ultimate target: zero emissions, zero accidents, and zero ownership. We have developed a new value-chain for the age of shared, autonomous mobility-as-a-service. The same, linear model can also be interpreted as a circular, interconnected model, wherein all stakeholders interact.

Image 3: Mobility Value Chain, Neckermann Strategic Advisors, 2020

Despite all enthusiasm, a recent study from Neckermann Strategic Advisors found that end-user adoption of autonomous technologies and the shift from private to shared mobility might be bigger barriers to overcome than expected. The combination of user behaviour and technology is an essential piece of the mobility puzzle to make the three zeroes framework a reality. These zeroes are probably priceless. Globally each year congestion costs $500 bn, pollution kills over 4 million people and approximately 150 people die every hour due to road accidents.

Investors have understood the importance of these challenges that new modes of transport are addressing and actively finance corporates and startups around the world since 2010.