Current Mobility Challenges Facing European Markets

By Graham Jarvis

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5th November 2021

In 2011 a partner of Arthur D. Little, Wilhelm Lerner, wrote a report on the Future of Urban Mobility – Towards networked, multimodal cities of 2050 to assess the maturity and performance of 66 cities worldwide and finds most not just falling well short of best practice but in a state of crisis.

He found that many cities’ mobility systems were standing on “a burning platform and if action is not taken in the very near future, they will play a major role in slowing the growth and development of their host nations”. It is subsequently suggested that European mobility was being held back.

Moving forward a decade, his colleague Joseph Salem, who’s also a partner at the firm, writes in the foreword of the company’s Autonomous Mobility Journal, Edition III for September 2021: “We live in unfortunate times where the transportation industry worldwide continues to be impacted by the COVID-19 pandemic and supply chains across the automotive industry have been disturbed… amid the challenges, one of the important lessons that we derive from the pandemic is this: innovation is now a must. COVID-19 has underscored the need for innovation in devising safer and faster mobility solutions and already the signs are encouraging. For example, progress is being made in the development of autonomous transport by air and sea to support the creation of an intermodal ecosystem.”

To provide a more integrated approach to mobility, he argues that it has become more critical for authorities and mobility solutions providers “to anticipate future trends, challenge the robustness of current business models and question whether future evolutions are being correctly foreseen”.

Key trends

Francois Joseph Van Audenhove, managing partner at Arthur D. Little and head of its global travel and transportation practice, adds that things have changed significantly since 2011. Three types of trends have been identified: global, behavioral (influencing mobility demand) and technology (influencing mobility supply).

He explains that global trends include growing socio-economic inequality. Many people are now captive to one single mode of transport, the take-up of e-commerce, the home delivery of goods, and he says there have been changes in the shape of cities, making them multipolar. He adds: “The awareness of the need for climate action is also driving the electrification of mobility.”

The pandemic has created new behavioral trends too by accelerating the impetus to work from home and the adoption of more flexible working hours. He finds that this has created “a flattening of peak-time demand, higher expectations in terms of comfort and hygiene when traveling, and healthier mobility lifestyles, with the growth of active and micro-mobility”.

There is also the push for digital transformation, stimulated by technology and new market trends. He suggests they are driving the digitalization of the mobility offering, the increased acceptance of new forms of mobility such as on-demand and micro-mobility, the market consolidation of private mobility players and the acceleration of enablers for intelligent transport systems. He said: “The automation of mobility is also progressing but its implementation will take time.”

So, what strategic hurdles must be overcome to develop an effective mobility on demand solution throughout Europe? Steve Bell, principal analyst at Wards Intelligence responds by commenting that shared mobility schemes initially thrived in cities but they had an adverse effect on public transport, which lost passengers in dense areas while not serving less populated or rich neighborhoods.

He explains how this impacted public transport: “This put economic pressure on public transport systems and reduced service levels. Additionally, for Europe and other regions no solution for semi-rural and rural areas has been created yet.” This means there is a fundamental need to innovate by developing a shared co-operative mobility system that he says acts as “a connected cross-border infrastructure for which a sustainable business model has yet to be created”.

Mobility growth

Jan Tore Endresen, CEO of ShareBike believes that the growth within mobility has been too rapid, particularly with micro vehicles such as electric scooters. They have grown the fastest because there is a lot of venture capital behind them. In Oslo, he reveals there were at one point 30,000 e-scooters in a city with a population of 800,000 people.

“That means that every 26^th citizen in Oslo has had one scooter to share and it’s obvious that this is no sustainable,” he comments. Regulation is one of the hurdles that e-scooters need to overcome and so he says cities are entering a regulatory process to establish the rules of usage of these vehicles. Usually this means that restrictions will be placed upon them: how and where they are used. However, the positive side of this discussion will lead to a debate about what kind of mobility cities, towns, and even countries want to have. The conversation in his opinion needs to make the public sector defend itself and recognize the potential of the private market.

The discussion needs to also consider how integrated mobility as part of a public-private partnership is going to be implemented. He explains: “The direction of this line that bounces out of both sides is about what type of mobility we have and how it’s going to be implemented. It is more reflected discussion, involving the bus, tram, and train companies to how the mobility system should be designed to meet with public needs.”

No one fits all solution

Augustin Friedel, shared mobility expert and advisor describes mobility and transportation as being hyper-local. Yet expectations, service design, or demand for certain types of shared or on-demand mobility differ city-by-city, and perhaps even regionally.

He suggests: “There is no one fits all solution for Europe, the on-demand solutions need to be tailored to the requirements of citizens, existing infrastructure and local authorities. A closer collaboration between different players and the openness for public-private partnerships could help for a faster and more integrated adoption of on-demand services.”

He believes that public transit is the backbone of urban mobility. Public-private partnerships could provide support to supplement the “existing network of services with additional ones, and this could increase the service level within a city and convince more citizens to switch to shared mobility and public transit permanently.

“Partnerships could also help to reduce the overall costs, as on-demand solution might be the more efficient solutions in certain areas or during certain time slots during the week. For example, it might be more convenient for users and more cost efficient for the operator to run an on-demand shuttle service during night hours instead of a bus with fixed route and schedule.”

Not being held back

In conclusion, Endresen argues that European mobility isn’t being held back because the private players are eager. However, it does think there needs to be a display of more public sector competence with regard to the authorities, the politicians, and the public sector. The problem is that they are focused on every aspect of mobility, except for the mobility solution.

He explains: “For example, with Boris Bikes, 89% of the focus is on advertising or anything else but for transport and that is because of competence. If you are uncertain, you don’t want to enter a discussion and so there needs to more competence with transport and especially within micro-mobility. The public sector might say they have that competence, but they have not a clue what micro-mobility is. The biggest exception is Barcelona in Spain. It is very competent, very professional and very capable in all these areas. It is said to be the role model of Europe. Helsinki shows how to control the service.”

He warns that autonomous vehicles won’t succeed until towns and cities have dedicated lanes for them, arguing that they can’t technically work within the technical urban infrastructure that currently exists. For safety reasons, they still require a human driver and so he sees them as being less efficient than buses. He believes autonomous vehicle technology is not capable of working within an ordinary city environment and, therefore, thinks the AV proposition is a flop because it will, in his opinion, never been an effective way for public transport.

Act today

Van Audenhove nevertheless proposes that all mobility players, governments, and mobility service providers alike, need to act. His company has identified three game-changers that city governments and authorities can use to frame and enable mobility systems for the post-COVID world to prevent mobility from being held back. Van Audenhove suggests that there is a need to think and act at a systems level with a vision, regulation, execution planning and with a mobility funding equation.

He says there is also a need to foster innovation through public-private collaborations on technology and innovative business models, and focus should be placed on creating Unified Mobility Management Models, which go beyond mobility-as-a-service to enable real-time optimization of flow and assets. However, at the end of the day, European mobility could still be held back if operators fail to re-build customer relevant and trust, while improving operational resilience. Part of this will require the public-private partnerships to accelerate the digitalization of mobility offerings and operations for preference and resilience. Key will be the pre-emption of risks and the building of agility within the systems too.