By Dan Sperling (July 12, 2018)
It’s hard to read the news these days without stumbling across a new service promising to change how people get around. Just this year, JUMP Bikes launched the first dockless electric bike sharing in the United States, Bird, inundated cities—for better and for worse—with its dockless electric scooter rentals, and a long list of startups is leaping in… Skedaddle, Spin, Lime, Scoot, Skip, Pace, Ofo, Cabin. Meanwhile, conventional transportation options, including buses, rail, and taxis are losing market share.
What is driving this change, why now, and what does it portend for the future?
I recall advising venture capitalists just 15 years ago that the passenger market, though huge, was not fertile territory for investment. And it was true. Transportation had been stagnant for decades, largely untouched by the IT era. Heavy regulation of taxi services and underinvestment in public transportation slowed innovation. With few attractive travel alternatives, car ownership and use soared. We have more than 1.15 vehicles per licensed driver in the U.S. and 0.8 vehicles for every man, woman, and child.
All that began to change in the 2000s, with the advent of smartphones and GPS. These tools make on-demand transport easy—lowering transaction costs and inconveniences—for both the mobility supplier and the user. No longer do workers have to coordinate and adapt erratic work schedules in order to carpool. Ridesharing and ridehailing apps like Lyft and Uber match you and others going to the same place at the same time at the touch of a button.
Smartphones and GPS also enable flexible, short-term rentals of scooters, bikes, and cars. Such rentals are useful for stand-alone trips as well as linking to rail and buses by providing “first-/last-mile service.”
New technologies and business models are unlocking what could be a trillion dollar market—converting individual car ownership and uncompensated driving into commercial businesses. The market for passenger travel is booming in ways unforeseen just a few years ago. Lyft recently acquired Motivate, the largest bike-share company in the U.S. Scooter-sharing companies Bird and Lime have rocketed to billion-dollar valuations far faster than Uber and Lyft. Uber is valued higher than heavyweights General Motors, Ford, and Honda. Countless startups are throwing their hats into the ring with creative solutions to traveler desires.
These developments are part of a broader ongoing shift in the transportation landscape. As I discuss in my recent book, Three Revolutions, innovations in mobility are being matched and amplified by innovations in vehicle automation, sharing, and electrification. In future contributions, I’ll dive further into these topics and discuss their potential implications for the environment, economy, and social equity.
For now, I’ll comment that while we must acknowledge and address complaints about ridehailing cars congesting downtowns and airports, and dockless bikes and scooters cluttering public walkways, we must also recognize the enormous and exciting potential of new mobility services. Over the past century, we have allowed cars to become an unsustainable monoculture. We have become inured to 37,000 traffic-related fatalities per year (just in the U.S.), the huge economic, environmental, and social cost of building cities around streets instead of people, and the loss of 14% of our urban land for parking (in Los Angeles). If business, policymakers, consumer advocates, and transportation experts work together, new mobility services can disrupt this status quo in a way that improves society for all.
This blog post was originally published online at Forbes.