The Unbundling of the Automobile
The invention of the automobile was a giant leap for mankind, bringing people to their destination independently. For decades, people have been in love with these heavyweight machines and depend on them as their main mode of transportation for daily commutes. Americans pay about $20K-$30K for a car and in a high density, land-scarce city like Singapore, a car costs more than $70K. It is expensive but car owners are willing to pay for a car that offers on-demand transport anytime and anywhere; long or short, frequent or infrequent. It is predictable, convenient and a symbol of status and prestige for many people. But this luxury has come at a hefty cost: urban gridlock that affects productivity and costs the United States more than $166 billion per year; more than 1 million road traffic fatalities yearly; loss of bio-diversity due to clearing large swaths of land for construction of infrastructure such as roads; and climate change due to carbon emissions. These mounting problems are causing people to question the viability of car-centric mobility.
Unbundling the Car as an Alternative
Visualise the car as a bundle of trips that you buy. Ex-Uber strategist Oliver Bruce uses a great analogy; buying a car for $20-30K is the equivalent of prepaying for around 5000 on demand trips that you can take whenever and wherever you want. It’s expensive but conveniently predictable, and therefore valuable. Now, break down the car into a bundle of attributes and services: vehicle price, number of seats, engine size, luggage space. Then, visualize that these attributes can be unbundled for daily use and infrequent use. A bundled car, which contains features that are only used occasionally, like additional seating, cargo hold, and all-wheel drive, would then impose a burden on consumers due to higher fuel usage. Unbundling the car would allow consumers to choose to invest in the “daily use” features and pay as needed for the “infrequent use” features. The introduction of new Mobility-as-a-Service (MaaS) options such as carsharing services like Zoomcar or ride sharing and ride hailing services like Uber, play an important part in the unbundling of the car and aim to cover some of the “infrequent use” features such as the car boot, you might only need once a week for shopping.
Our world is on a constant technological shift from bundling to unbundling. Advancement in mobile technology has allowed common items like calculators, alarm clocks, books, radios, games, newspapers to be bundled into a five-inch smartphone. The opposite happened to personal computer: it has been unbundled into phones, tablets and wearables. And this unbundling effect is happening in modern transport now where a car is unbundled into trips that can be purchased when we need them. Modern MaaS transport services are enabling and incentivizing people to unbundle their cars. Instead of a total reliance on the beloved cars to meet all our daily mobility needs, we can choose the most appropriate transport option that matches the nature of our trip. Commuters have access to various mobility options multiple times a day, ranging from public transportation to scooters for short trips, to bikes for medium trips and emopeds and ebikes for long trips. The proliferation of micromobility vehicles like bicycles, Ebikes, electric scooters, electric skateboards and many more are adding to the mobility options to meet different mobility needs at all times.
All in all, buying a trip when it is required is more economical and environmentally friendly than owning a car just to take on short trips, a job which micromobility vehicles can perform just as well and at a lower cost. Short trips by cars also generate the most carbon emissions, exacerbating air pollution. With palpable benefits, this new mode of mobility is catching on in many places. Currently, more Americans are buying micromobility vehicles to replace short car trips than ever before and Lime and Bird which offer ridesharing of micromobility vehicles like scooters are experiencing rapid growth. In Asia, shared bikes are the third most popular mode of public transport in China; with Singapore, Taiwan and South Korea also picking up the pace in the micromobility market. At the end of the day, it appears that convenience and speed are key to commuters and these micromobility vehicles fulfil that criteria. And the cherry on the cake is that fewer cars on the roads means lesser carbon emissions and cleaner air.
It will not be easy for entrenched habits and mindsets to change. Replacing car ownership with fractional car ownership might still be considered unacceptable for many. After all, for decades, we have embraced the concept of individual ownership to guarantee the availability of mobility whenever it is needed. This started with owning a horse and a carriage and over time, the horse carriage was replaced by the automobile but the concept remained the same with people always having control over the car, which is parked in their garage or in a parking lot. People must see that true freedom in mobility lies not in owning a car but in having the freedom of choosing mobility for each trip. To encourage this change in consumer habits, mobility services must continue to evolve to become widely available and accessible so as to be an attractive alternative for every trip that people need to take, not just some. MaaS is still in its nascent stage and it will take time before more people make the switch towards using mobility-on-demand. Finally, there is a need to plan for infrastructures like creating parking space and roads for these small and low-speed micromobility vehicles. Mobility experts across the globe must continue to dialogue and look for new ways for the mobility business to evolve and to create a new mobility ecosystem that is safer, cleaner, more diverse and sustainable for future mobility and travel.