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Disrupting the Car-Sharing Market in Smart Cities through a Unified Cross-Border Platform

Periodic Reporting for period 1 - MobiCS (Disrupting the Car-Sharing Market in Smart Cities through a Unified Cross-Border Platform)

Reporting period: 2016-07-01 to 2016-12-31

As the world becomes more crowded and urban population increases, the need for alternative mobility solutions has risen. Today's cities are plagued by high air pollution and noise levels, traffic congestion and road accidents, all of each can be directly related to urban transport. Some of these issues can be tackled by reducing the amount of vehicles in the city and not surprisingly, European cities have been adopting measures that limit the access of vehicles to city centres. To try to address today’s urban concerns and the increasingly worrying climate change issues, the EU has devised new ambitions towards sustainable, green modes of transportation, with emphases on collective transport and a seamless transfer across different transportation services and modes.
One innovative solution to pop up is car sharing, where a person rents a car for short periods of time, usually by the hour or the minute. Car sharing is becoming increasingly popular in Europe, with Germany at the fore-front, not only in Europe but also worldwide. Several studies indicate that car sharing leads to a decrease in the number of circulating private vehicles and in the number of km travelled by car, while also increasing the use of greener modes of transportation: walking, biking and public transportation. In fact, in cities with reliable and extensive networks of car sharing services, end-users are fairly willing to sell their cars or think less about buying one. Additionally, car sharing operators have been important drivers for the establishment of circulating electric vehicles and some operators have fleets exclusively composed of electric cars. Taken all together, depending on the region and car sharing operator, the latest studies indicate that one car sharing vehicle eliminates 3-11 private cars and can decrease greenhouse gases by 4-18%.
Since its establishment, car sharing has evolved from a short-time/distance rent-a-car model to a new concept: the free-floating model. Free-floating is based on instant booking depending on vehicle location, and flexible start and end locations, meaning that the vehicles are not collected from, or returned to fixed stations. The only constraint when ending a journey is that the car is legally parked within a defined geographical home area, which usually encompasses large regions of the city. The system relies heavily on the use of smartphones, which are utilised by the end-user to identify car locations, book vehicles, unlock and lock vehicle doors and end the journey. The introduction of the free-floating model sets a new standard and the recent spur in car sharing growth is mainly attributed to it.
Free-floating seems to be the most demanded and popular service and it likely corresponds to the future of car sharing; its popularity is easily understandable, as this is the model that most resembles private car ownership and provides the most flexible mobility service. However, this model requires larger fleets and a higher investment from operators which are limiting the large scale implementation of car sharing. Consequently, car sharing is still a service of early-adopters and for it to be fully functional and used by the masses, extensive coverage and an easy rental process are imperative. Currently, to enjoy a more extensive coverage and to access the full spectrum of car sharing options, users register with multiple operators in their hometown. As a result they incur in higher direct costs associated with membership fees and indirect costs related to time wasted and low convenience of managing multiple accounts/invoices and bookings. From the operator’s point of view, fleet size is the main investment and risk. For companies to break-even and create a viable business, each vehicle has to reach a minimum target of service hours. In a competitive market, operators will tend to keep low fleet sizes in order to maximize usage rates and profitability. But, from the end-user’s point of view this is unpractical and a major hurdle to give up on private vehicle ownership.
With all these factors in mind, we have developed a new solution, MobiCS, a platform that will integrate different operators into a central system, allowing end-users to access the complete pool of vehicles from a single account. This platform will increase the available vehicles and options for end-users and will maximize vehicle usage rates for operators. We will also be able to provide new functionalities (supported by our own hardware and software), such as keyless access and geo-location of nearby vehicles, in order to facilitate even more the end-users mobility. MobiCS, will be a “roaming” service for car sharing and will create an international federation of car sharing, allowing citizens to use a single user account in a cross border way, without the trouble of registering every time they travel to a new city.
During phase 1 of the SME Instrument, we have done an extensive market assessment study. We contacted several different operators and showed them a prototype of the platform. This allowed us to conclude that there’s considerable interest in the MobiCS solution and willingness to pay from operators once the platform is fully developed. In all, we now have confirmed willingness to pay from more than 20 different vehicle operators. We have also compiled feedback from end-users of 9 different countries, 5 of each in Europe, which allowed us to better understand the needs and specificities of our target markets and the similarities with other geographical markets. Taking into account operator’s and end-user’s feedback we established necessary future features for MobiCS success and we have crafted a detailed work plan for its development.
When analysing the market and future clients, we determined the initial countries for product launch. We have selected three European countries and one in South America for initial commercialization of MobiCS. These countries were selected based on external factors and market growth, and on our own estimated ability to penetrate the market. We have analyzed IPR issues and have concluded that we have freedom to operate at an international level with little restrictions, and we have established a strategy for IPR protection of MobiCS.
A marketing and commercialization plan for MobiCS was established, along with a financial projection for its implementation, to estimate the investment needed and the payback time. Taken together, we were able to outline a business model and elaborate a business plan.
Mobiag is bringing roaming to the car sharing industry, through MobiCS, an innovation that will allow the market to grow much faster. We will aggregate fleets from car sharing operators, rent-a-cars, leasing companies and make them available to users through their account with their local provider. Clients can use this virtual fleet all over the world, like they are at home. Imagine a traveller going from one country to another, she gets off a plane and instantly finds a car close to her - without downloading a new app, or worrying who the provider is. Just as she expects her cellphone to be roaming, she will now have an instant access to a car. With MobiCS, users can use whatever car is most convenient, whether they are in their home city, visiting a city nearby, or travelling abroad.
By contributing to the large scale implementation of car sharing, MobiCS will be an enabler of short and long term objectives of the EU: execute smart mobility solutions, based on sustainable multimodal systems, reducing greenhouse gas emissions, congestion and urban road accidents.