Providing mobility as a service instead of simply selling cars is hard. Look at the following two examples:
Uber recently announced a $5.2billion loss in the 2nd ¼ of 2019 and is yet to turn a profit in its entire 10-year history.
Last year, Daimler and BMW decided to merge Drive Now and Car2Go, their respective car-sharing schemes, citing the need to achieve scale in order to be profitable.
Maybe we shouldn’t be surprised at how hard it is. To put this in context, UK train operators report profit margins of less than 2.5%. Mobility as a service means maintaining an on-going relationship with the customer. Cutting and running isn’t an option.
It’s interesting to see how those services that are not tied to OEMs – Uber, Lyft and Citymapper to name three – are busy expanding the scope of their mobility offerings. The Uber app can be used for scooter, bikes and cars in many countries, Lyft will tell you when a bus or train is quicker and Citymapper is working hard to aggregate as many options as possible and will suggest how these can be best combined. In many ways they are emulating the established model of counterparts such as Transport for London in offering multi-modal options to their customers.
These mobility services are becoming hardware-agnostic to some extent. Meaning that in turn, their success depends more and more on the quality of the complete user experience. A poorly realised app interface is deadly for companies in this sector. And if the vehicles are difficult to use and poorly looked-after, they must add much value in convenience to make up for this.
Offering a service is about building a relationship, it is an on-going proposition requiring good communication (interfaces) and good maintenance (unsexy and undervalued, in our experience). That demands time, energy and the ability to listen and empathise.