In September, I took an in-depth look at the current state of the On-Demand Ridepooling market which has seen impressive growth over the last 2–3 years. Given the article’s nature as snap-shot of the status in September, I decided to update some key statistics at the end of this extraordinary year, which has brought unprecedented challenges to the mobility market.
As I regard the key findings and conclusions drawn in my earlier article to be still correct, this article focuses on updated data to reflect On-Demand Ride-Pooling services that have been launched in Q3/Q4 2020 as well as subsequent additions to the dataset gathered through additional research and feedback provided by readers of September’s article.
The On-Demand Ridepooling World Map
As of December 2020, almost 400 On-Demand Ridepooling services have been deployed globally of which 270 are currently running. Over 40 new services were launched between September and December 2020. In September I predicted that 2020 will see noticeable less project launches than the record year 2019, but Q4 almost closed the gap: Over 130 projects were initiated in 2020, compared to almost 150 in 2019.
(If interested, please see the notes how this map was compiled in my first article.)
2020 was of course defined by the COVID-19 pandemic which has upset the mobility market fundamentally. However, it has not had a significant impact on the launch of new On-Demand Ridepooling projects. While the number of projects that have been specifically introduced in reaction to the pandemic (essential workers transport etc.) is not very large, very few projects in the pipeline seem to have been delayed or suspended because of COVID-19.
Driver of this development is clearly the B2G segment (=public transit) which has also surpassed its total number of project launches of 2019. This is hardly surprising given that the plummeting demand on fixed-route bus services and a certain aversion of passengers to large vessels due to the pandemic made a strong case for flexible, demand-responsive mobility in small vehicles. Also, the time between Go-decision and actual service launch (i.e. passenger rides begin) can easily take 1.5 to 2 years with public stakeholder, which means than many of the recently launched services have actually been planned way before the start of the COVID-19 outbreak.
When looking at the delta between new service launches and completions of former services, this picture gets even clearer. The B2G segment is going strong with a large positive delta (=more new than discontinued services) in two consecutive years. While it seems adequate to be optimistic about of the overall prospect of the B2G segment, it stands to be expected that there will be a slump in future when the large number of pilot projects (>60% of all projects) that are currently running or have been recently initiated end, as many of the very small pilots are unlikely to be transitioned into permanent, commercial services.
The other two segments are looking much less bright: While it remains to be seen if the B2B segment can recover from this year’s plunge, the B2C segment has been on a negative trend for the last 2–3 years. This year has seen the de facto market exit of CleverShuttle in Germany and the fact that the overall delta stands at “only” -1 needs to be put into perspective that this year’s newly launched services are very small and often cover niche use-cases. The plummeting demand (home-office, less recreational mobility, surge in bicycling etc.) due to the COVID-19 Pandemic has been particularly hurtful to the B2C Ridepooling players, like Via’s B2C operations in US cities (e.g. NYC) or MOIA in Germany.
Geographically, 2019 and 2020 have been quite similar, but North America and Europe switched places, putting the NA market into the top spot, thus making the USA the world’s largest national market. Growth in Asia is unbroken and the MENA region has seen a noticeable number of new projects in 2020 with multiple launches in Israel and UAE. In contrast, Latin America did not pick up any momentum in 2020 with only one new short technology demonstration conducted by Shotl in Belo Horizonte, Brazil.
When examining the Technology Provider Market, the overall dynamic is unchanged with Via far ahead of all competitors and quite a lively battle for #2 on this ranking. Some consolidation has happened within Germany’s Deutsche Bahn, which first re-positioned CleverShuttle as Operations-as-a-Service provider and later acquired moovel from Daimler/BMW and will consolidate its White-Label B2G On-Demand Ridepooling technology development at its subsidiary ioki (i.e. pending market-exit of CleverShuttle and moovel on-demand as technology providers). Besides Deutsche Bahn’s activities and Via’s large funding round in Q1, no noteworthy investments or M&A’s have happened in 2020.
Conclusions & 2021 Outlook
All things considered, 2020 has been another strong year for the On-Demand Ridepooling market with over 130 new services launched globally. With close to 30 new services already announced for first half of 2021, there are strong signs that this positive trend will continue in 2021.
To pour some water into the wine, two aspects should be kept in mind:
- We are clearly seeing the bow wave of B2G (i.e. Public Transport) services, which tend to jump on the innovation bandwagon with a major time-lag, have long decision-making processes and have a tendency to repeat pilots locally instead of leveraging experiences from other regions, especially if third-party funding (e.g. federal or national government) is available. As those small-scale pilots will struggle to demonstrate a significant leap in terms of ridership or economics compared to previous fixed-route or call-a-bus services, it stands to be expected that this wave will flatten significantly once the pilot projects have ended and funding sources have run dry.
- The average fleet size of this year’s newly introduced On-Demand Ridepooling services was only five vehicles. While that clearly correlates to the large number of B2G services, whereof a large proportion is constituted by small-scale pilots, fleet sizes will have a defining influence on the role of On-Demand Ridepooling in the sustainable mobility mix and the future prospect of the technology provider market.
As Felix Zwick et al. (2020) point out in a recently conducted study for Munich metropolitan area, On-Demand Ridepooling can have a strong positive effect on traffic if deployed in high-density areas with large fleets. Vice versa, small services have an unfavourable ratio of passenger kilometers booked to vehicle kilometers travelled, hence not contributing to a relief in traffic.
“Despite the low efficiency, [first/last mile feeder services or in sparsely populated areas] may still add societal value if the attractiveness of public transportation is increased.”
While I fully echo this assessment by the study’s authors, it circles back to one key question I raised in my article in September: How do we want to leverage the opportunities that the technological innovation of On-Demand Ridepooling is presenting us?
Currently, the predominant reason for public stakeholders for introducing On-Demand Ridepooling is either to replace a dysfunctional fixed-route bus line or to upgrade a dial-a-bus service into the digital age. Both motives are completely fine and may create limited value locally, but it seems very unlikely that these types of service will make a relevant number of people seriously consider switching from private car to shared mobility. And in the end, isn’t that the ultimate goal?
On-Demand Ridepooling has the potential to become an important building block for the transformation of urban mobility. But it needs to be understood not as a means to fill gaps in the Public Transit network, but as an equal member of a city’s sustainable mobility mix. Success will only come, if the service is creating value to the customer beyond what traditional public transit can offer. And that requires large coverage areas, long operating times and most importantly, high availability (i.e. fleet size). Obviously, this will cost money and to a certain degree, it might compete with existing public transit services. But even as public transit is luckily back on many policy-makers’ agendas, there is clearly a market which is not adequately addressed by fixed-route, fixed-timetable services. In the end, it’s about getting people out of their cars and into pooled forms of mobility. And in order to achieve that, dedicated investments in compelling Pull Factors in form of convenient, high quality, broadly available services are needed. And to ensure both user adoption and financial viability, equally strong Push Factors like congestion charging, electronic road pricing or radical reduction of on-street parking are needed.
Will we see that happening in 2021? In my prediction: No. But perhaps 2021 can become the year in which we have that much-needed discussion in order to lay the foundation for the next generation of On-Demand Ridepooling projects that take a bolder approach.