Mobility integration, the new business model underpinning the corporate move towards mobility budgets and total cost of mobility, is influenced by and aiding a wider shift towards more sustainable means of travel, explains Martyn Briggs of Frost & Sullivan.
We are witnessing a paradigm shift in the way we view travel behaviour, broadly referred to as a shift towards mobility, affecting the consumer and business markets. For example, people are questioning whether they need to own a car in densely populated urban environments, as improved public transport and new business models such as car-sharing are increasingly adopted. In addition, a continuing progression towards sustainability in transportation and indeed in all major corporate environments, coupled with technological advancements in reporting and management, has led to a significant increase in the sustainable mobility options adopted by large corporations, for example, through fleet management and telematics, or corporate car-sharing or pooling solutions.
Of course, this is being driven by several trends currently influencing the products that key industry stakeholders are offering to the market. As well as these urbanisation and environmental considerations, social preferences are changing, with younger people in developed economies in particular no longer considering car ownership a symbol of status and preferring cost-effective alternatives. This is followed by the trend for collaborative consumption, otherwise known as value for many, whereby the pooling of resources or consumers and sweating of assets (such as vehicles) is feeding into this social change. Government policy also continues to play a key role in defining mobility standards and choices, whether through facilitating more open data networks at one extreme, or subsidising sustainable choices such as zero-emission vehicles at the other.
The most important differentiator, however, will be technology, which has facilitated several smart mobility initiatives such as remote vehicle access, tracked and traced movements of vehicles and goods through telematics, and allowed access to important transportation data such as traffic jams or delays to public transport through increased connectivity, whether in the car or through portable devices.
A door-to-door mobility solution
The key segments making the move to mobility are automotive manufacturers, fleet or leasing managers, transport operators and technology firms or other third parties. However, there is an increasing level of convergence among these stakeholders, leading to increasingly integrated mobility solutions. Indeed, several organisations are beginning to align their corporate travel and employee benefit packages with this way of thinking, moving from a total-cost-of-ownership approach to a mobility budget or total cost of mobility, either by allocating a designated monetary value to each employee, or by changing travel-reporting processes to consider several modes of transport rather than individual expenditure, such as company cars.
Recent research by Frost & Sullivan has identified a number of scenarios, business models and examples of such concepts, whereby organisations combine various modes of transport and products to offer an integrated, multimodal, door-to-door mobility solution, to consumer and business customers.
The consumer mobility market has been galvanised by the increasing amount of data collection on key transport routes/modes, and the rapidly evolving consumer electronics market, which has seen the proliferation of smartphones offering real-time updates of transportation services on the go. This has led to several solutions, whether operator-led initiatives such as Transport for London's iBus, equipping all 8,000 buses and many stops with real-time information and automatic vehicle location, or mobile applications such as moovel from Daimler, which integrates all transportation data from the cities of Stuttgart and Berlin to offer the best choice of travel in those locations.
For the business-to-business market, with increased focus on corporate social responsibility and cost reduction, several organisations are beginning to consider mobility budgets and new mobility business models for employees, rather than simply providing a car or allowing free rein on corporate travel. In some cases, this complements the offer of a car as an employment perk, adding a budget for multimodal travel as an extension to the car, but in many cases, companies are looking to use technology to encourage behaviour change, through promoting shared or downsized vehicles, or reducing the need for travel through teleconferencing and other remote working techniques. The latter has also gained visibility from policy-makers; for example, at Frost & Sullivan's Urban Mobility event in June 2012, UK Transport Minister Norman Baker introduced himself as the 'minister for not travelling', given the opportunities presented by technology and for smoothing demand into off-peak periods to optimise the transportation networks.
Mobility budgets in practice
While the move towards mobility budgets and calculating total cost of mobility is a relatively new concept, there are already several examples of this in practice. From automotive manufacturers, we've seen products such as the MU Professional via Carbox, a collaboration between Peugeot and Carbox to deliver a multimodal booking and payment platform capable of managing mobility budgets for employees.
BMW leasing subsidiary Alphabet has launched AlphaCity, a corporate car-sharing platform that enables companies to provide vehicles for business use for employees as required, attributing the agreed costs to various business departments as the vehicles are used, while enabling companies to recoup costs by charging personal use of the vehicles to the employees directly. The rationale for this is that Alphabet gains by charging a premium price for the technology, and the organisations benefit by effectively becoming their own car-sharing organisations, which Alphabet estimates saves a company 30-40% of the total cost of ownership of the vehicle.
Furthermore, in the Netherlands, Leaseplan has diversified its offering with Mobility Mixx, a card that allows employees to pay for long-distance travel, car-sharing and rental, public transport, parking and refuelling, taking the administrative process away from the organisation by providing a post-use invoice. Of course, reducing the time spent on administration can save considerable costs, for which companies will be willing to pay a premium.
ALD Automotive has joined forces with Mobispot to offer office-rental facilities in addition to mobility services, while some leasing companies have diversified to offer bespoke consulting services in this regard, such as Athlon Mobility Consultancy.
Transport operators are also witnessing this trend; most prominently, the NS-Business Card has been launched by NS trains in the Netherlands, which allows all modes of travel on a single invoice. As well as providing significant administrative benefits, this offers convenient travel across the country, the use of additional services such as short-term rental of office space and business-class lounges, and integrated travel options such as bike and car-sharing.
There is also a role for third parties like fleet management companies that provide telematics and post-travel analytics to give customers an overview of their mobility costs. This is being led by companies such as Zenith and Chevin, but there are other stakeholders like mobile network operators with increasing machine-to-machine capabilities and traffic-management service providers, which are providing services in this regard, whether through graphs and analysis, or through applications and bespoke user interface. This opportunity extends to car-sharing operators, which are increasingly targeting corporate customers.
Several companies are already looking to reap the benefits of a total-cost-of-mobility approach. Siemens has adopted a 'mobility à la carte' scheme in Belgium, enabling company car users to allocate part of their budget to other mobility modes by using a more environmentally friendly company car. Accenture has adopted the AlphaCity solution, but felt the need to take the waiting time for taxis (and resulting lost productivity) into consideration in its business case calculations.
Undoubtedly, the possibilities of mobility integration are prompting finance directors, fleet managers, and human resources and facilities departments to think about the levels of savings that could be achieved at their respective organisations. Therefore, while efforts are still required to make mobility management more effective, continued technological and product advancements, along with increased interest from industry stakeholders, will lead to a continued move towards mobility integration, underlined by smart and sustainable choices.
These topics will be a focus of the forthcoming Frost & Sullivan Urban Mobility 3.0 event in London on 19-20 June 2013. Visit www.urbanmobility.gilcommunity.com for further details.