Next generation competition is coming not from your industry but your arena— a competitive landscape in which different players address the same customer needs or compete for the same customer resources (i.e. money, time and attention) as you.
In this series, we focus on shifts in human needs and look to the peripheries– exploring the competitive battles at the edge of culture, business and innovation.
Episode 2: Mobility
Over the last decade, we’ve seen the explosion of ride-hailing services, delivery apps, app-rented scooters and on-demand vehicle access. All brashly trying to win over customers, drivers, and cities with new promises of mobility – easier, cheaper, more personal, more ubiquitous, and fundamentally different.
While individually owned vehicles may still be the most preferred means of transport, the future business of “mobility” will involve much more besides. For the auto industry just getting to grips with electrification, changing habits and technology are forcing a rethink of how their products are sold, used and owned.
And while the pandemic has temporarily put the brakes on both, the mobility revolution is in fact just getting started.
With dealers shut in many places, auto companies have scrambled to embrace online selling - a move they have resisted for decades. New software would give customers the ability to complete the entire transaction digitally and take delivery without ever setting foot in a showroom.
Does this mean the end of the dealership?
Volvo recently announced that it is moving all its vehicle sales online and going all electric by 2030. Volvo will slash the seemingly countless options buyers must wade through, shifting to pre-selected packages with only a few stand-alone options. It will automate the buying process. Dealers will largely just offer test drives and handle service and repairs.
Clearly this is about more than designing a nifty app. It's about reimagining the business model and supply chain. Used vehicle platforms already have an edge.
Carvana in the U.S. has spent $2 billion since 2013 rolling out its digital network for payments, technology to evaluate trade-in vehicles, financing for car loans, switching car titles across states with different rules and a logistics network to recondition, store and deliver thousands of vehicles to customers' homes.
Everyday urban journeys point to a need to balance the trade-offs between public transit’s ‘one-size-fits-all’ mobility and the burden that the ‘personal’ mobility of the car or motorcycle creates.
In city centres, new modes of transport are emerging and there is building competition from upstart mobility providers that connect customers with a mesh of different services.
The future could include a monthly subscription to an app that combines car-sharing, taxis, buses, trains and anything else on wheels including on single journeys where multiple modes of transport are the cheapest option.
All these modes of transport are being stitched together into seamless trips by specialist planning apps. These let travellers take a scooter to the station, ride the metro, then jump in an Uber for the last mile - or pick whatever other combination of price and travel time is most suitable. They charge the individual service providers a commission for including them in a journey.
Whim of Finland gives access to public transport, taxis, bikes and cars for a single subscription in several European locations.
Others like Deutsche Bahn, Germany’s state-owned railway company has an app that also lets passengers use a variety of travel options.
In a sign of the times, the boss of Volkswagen, Herbert Diess, conceded that “ownership is not necessarily what people want. You want a car when you need a car”.
Companies like Zipcar, Revv and Zoomcar enable people to rent cars by the hour, or even minute.
BlaBlaCar, a French company, has signed up 90 million drivers in 22 countries, connecting drivers with spare seats to travellers heading in the same direction.
Car companies have been fighting these challengers head on. Maruti Suzuki and Hyundai have launched their own car subscription services. While luxury car makers including Volvo, Audi and Lexus have tried to woo back younger city dwellers with subscription fees which exclude only fuel. Users get access to a vehicle whenever they need one without the expense of owning one.
Mobility disrupters have not been without controversy. Citizens and municipalities have woken up to the exploitative treatment of drivers, the new safety realities and traffic congestion. Yet they are pushing traditional manufacturers and transit authorities to innovate; to be a source of solutions, not new problems.
Culture evolves. Customer expectations are moving faster than ever before.
Someone is already rethinking your category.