The Smart Mobility Market’s Phenomenal Rise to Growth5 min readReading Time: 4 minutes
Time loss due to traffic jams, rising levels of environmental pollution, an increasing number of fatalities, some of the many woes of urban commuting. Enter smart mobility, a solution based on the use of different modes of transportation instead of one’s personal vehicle. This concept, which runs on the use of carpooling, ridesharing, and bike commuting, has taken cities by storm. Not only that, this market is expected to grow further still though things have been going a little downhill since the advent of the pandemic.
Impact of COVID-19 on the Smart Mobility Market: An Analysis
2020 has been a grim year for all industrial sectors, especially the smart mobility market. The primary reason for the downfall of the smart mobility market can be attributed to a decline in demand for carpooling and ridesharing services across the world, owing to safety concerns.
While it is true that the market is expected to experience even slower growth during 2021, industry experts expect to see the curve rising from the year 2022 onwards. This forecast is based on the belief that adequate safety measures will be introduced for carpooling and ridesharing, such as the placement of plastic barriers between the car’s driver and its passengers.
Factors Affecting the Growth of Smart Mobility
The application of electricity to transportation and the use of carpooling are not novel concepts. In fact, the first Electric Vehicle (EV) was introduced in the US as early as 1889, and by the early 1900s, nearly one-third of the vehicles on the American streets were electricity-powered. It was not until the 1930s that cheap Texas oil made EVs a thing of the past. However, here we stand at the cusp of another golden age wherein EVs and smart mobility are bound to become an essential part of the future.
Having said that, it is natural for one to ask about the significant factors influencing the smart mobility market. The factors may either be drivers or barriers that need to be dealt with the innovation and a common purpose to turn the idea of smart mobility into a living reality.
#1 The Way People Viewed Vehicles are Changing
It was only a few decades back that owning a private car was every family’s dream. Mass production of automobiles and budget-friendly fuel prices brought this ideal within the reach of the average citizen, and as a result, vehicle-centric urban design and personal, door-to-door transportation became the norm.
Today, the scenario is much different. The present millennial-led era prefers not to own a car; instead, this young generation of commuters is shifting in favor of ridesharing services such as Uber or Lyft – they prefer to subscribe to a car-sharing service rather than bear the cost of a personal car, which includes fuel and maintenance costs. Is it any surprise that such new vehicle usage patterns will encourage the growth of the smart mobility market?
#2 Technology is Advancing at a Lightning-Fast Pace
From autonomous vehicles that are smart enough to run on their own to smart parking systems that make the tedious task of parking a piece of cake, technology is the key driver of the smart mobility market. The hyper-connectivity offered by the Internet of Things (IoT) and 5G will make it easier for cities to manage traffic, cut down environmental pollution, and make better use of infrastructure. Commuters can have real-time information for smoother and safer transit.
Then, with the use of self-driving cars or autonomous vehicles and drone deliveries, the United States Department of Transportation (USDOT) predicts that the world may see a whopping 90% reduction in traffic deaths, a 40% reduction in travel time, and a 500% increase in lane capacity. Does it get any smarter than this!
#3 Low Rate of Internet Penetration in Developing Regions
Here’s a barrier to entry for smart mobility systems in full force. Now, the use of ridesharing services requires the involvement of three parties, namely the rider, the driver, and the service provider. The entire process of matching riders with drivers, fare estimation and ride payment are to be carried out via smartphone apps, which in turn require good internet connectivity. Unfortunately, some regions, such as Burundi, Chad, and Somalia, among others, have extremely low internet penetration that hinders the development of smart mobility systems in such countries. Once the proper infrastructure for connectivity has been established, the dream of smart mobility can proceed onwards.
#4 An Entirely New Infrastructure and Value Chain is Needed
As much as IoT requires proper infrastructure for connectivity, so does the use of Electric Vehicles require ubiquitous charging infrastructure. The current scenario is pretty awkward wherein potential EV drivers do not see an infrastructure that allows them to buy an EV and drive with confidence, and on the other hand, potential infrastructure providers do not see mass demand insight. Until the time charging stations become as common as gas stations are today, this one barrier-to-entry will make the adoption of EVs a far-fetched dream.
#5 Another Major Driver is Government Policies
Central, state, and city governments can join hands to speed up the adoption of smart mobility systems. Although several US state governments have already directed their focus towards measures such as tax credits and rebates to make smart mobility more affordable for early adopters and are also imposing strict vehicle emission standards for automobile manufacturers, the need of the hour is to offer exclusive EV parking in congested areas, and establishment of ZEZs or Zero Emission Zones wherein traffic will be restricted to bikes, pedestrians, delivery vehicles, and electric vehicles – measures already in place by the city governments of London, Brussels, Paris, and Madrid. Such government policies are sure to accelerate the growth of the smart mobility market.
Top Companies Expected to Dominate the Smart Mobility Market
To create technologically evolved smart mobility solutions, companies need to come up with products that are developed from a long-term market perspective as opposed to short-term creations. This is because as the smart mobility market is set in stone and matures, consumers will naturally demand integrated solutions – a mix of travel services with ancillary services.
As of now, the following companies are expected to take the lead in the future smart mobility market –
- MaaS Global Oy
- TomTom International
- Innoviz Technologies Inc.
- Toyota Motor Corporation
- Ford Motor Company, among others.
Despite its present sluggish growth, smart mobility will be a factor in customer preference, changing the way people travel. It’s only a matter of time before this service model comes to the mainstream, and come it will, reaching its projected growth of $70.46 billion by the year 2027.