11 business & product lessons we take away from building mobility services

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The mobility industry has been booming in the past couple of years. The concept of seamless mobility was already introduced in 1911 by the French architect Eugène Hénard, but we had to wait another 100 years until phones, apps, and the internet became widespread.

Appetite for intelligent mobility solutions is evergrowing, with many initiatives and regulations pushed by the public sector and municipalities in pursuit of becoming greener and sustainable. Probably in every smart city concept, there is a chapter linked to mobility, so it's no wonder that many startups and even enterprises develop or already operate their own mobility service. Does that mean that the market is saturated? How do you build a successful service that generates profit?

Today, I'll share with you a few lessons learned from mobility projects we've built from A-Z or have participated in their development. These projects include e-scooter sharing or Multimodal routing app/MaaS. Mobility is a pretty challenging field, so our hands-on experience will hopefully help you answer a few crucial questions.

1. How to profit from mobility services?

Having a mobility service is a loooong-term business, and it's a privilege to operate one. Most of the mobility services need vast amounts of money to launch and stay on the market. Patience is also essential because you won't see black numbers for many years. Even the most prominent hegemons like Uber, Citymapper, and others struggle to generate revenue. That's a fact. If you can't handle reds for a long time, then this segment isn't for you. I experienced a situation when a new service was pushed to deliver revenue after only 1 year on the market. It made them change their strategy, which sank the product's value for users and business. Be patient and have a full bank account. By full, we mean full – Citymapper raised almost 60 million dollars during various funding rounds.

2. How to convert users to your service?

To users, your mobility solution is probably just an alternative to their old commuting habits. They still have a car, can walk or hop on public transportation. So how do you convince them? Sometimes regulations such as a ban on old vehicles in the city center create an opportunity, but that's not a thing to rely on. That's why you have to teach people about the benefits of your mobility mode. Chances are that some users never drove a scooter, but they'll give yours a shot if you educate them on how to ride. Also, the conversion between different mobility modes is super challenging. If you operate bike-sharing, you probably won't target car users. It's too convenient for people to stay in a car, so you need to offer them a similar comfortable way of transportation. For example, it would make more sense to target public transport users with your bike-sharing. Here you can see why it's difficult to convert more people into different mobility modes.

3. Partnerships are a must

You can't do it yourself. Unfortunately, it doesn't work this way in the mobility industry. You need to have partnerships with municipalities, cities, owners of buildings, offices, shopping malls, etc., to offer the most valuable service for your users. Just imagine that you launch a bike-sharing service, but the city will not allow you to build docking stations or park bikes on the streets. That happens. Not to mention that not all citizens will welcome your service with open arms. Therefore a good relationship with third-parties and local authorities is vital.

4. Offer multiple comfortable alternatives

As mentioned, offering at least a similar level of comfort is important. Some people will never rent a bike or scooter in the city just because it's not comfortable for them or they are scared of the traffic. Comfort, fear, ignorance, lack of comfort, and stereotypes limit the pool of potential users. What can you do with it? Offer multiple mobility modes. That's precisely what Uber, Bolt, and others do by integrating extra mobility modes into their primary business model – kick scooters, e-bikes, public transportation, and other types of transport provide a broad spectrum of ways people can travel. Users can then select the most convenient way based on current weather, flat or hilly road, or mood.

5. Provide the most straightforward user journey

One app should handle the full service. That means finding a vehicle, booking it, renting it, and paying for it. Noone likes switching between multiple apps. When you integrate services from more than one provider, you should still have only one payment system so that a user saves a credit card once, and that's it. This approach requires deep integrations, which can become a sticking point from a business and Ops perspective. Many potential partners and providers aren't prepared for such a deep integration – either from a technical point of view or simply because they aren't willing to go for it. Also, when you resell someone's service, you should think about who will be responsible if something happens and provide support.

A quick hint about pricing – how to add your VAT to the final price of a third-party mobility provider? Obviously, selling it through your app for a higher price isn't the right approach – no one likes to pay more. When you aim to aggregate more providers in one platform, subscription models and various packages that include free minutes or kilometers are vital business models. And it's convenient for users! For inspiration, check out Citymapper in London.

6. Don't skip public transport!

Roughly 55%* of all commutes in Prague is carried by public transport (41% in Europe). So if you're building a MaaS or multimodal platform, PT must be integrated. That can be hard, especially when PT data isn't public, but luckily this changes over the years, and more and more public transport networks provide their data for external integrations.

Our tip: Let the user buy an online ticket for PT in the app. We learned that this feature might be the key to success.

7. Make decisions based on data

It's easy to fall for assumptions and hypotheses while building any product. In the mobility industry, the stakes are high, so if assumptions prove false, it's going to be expensive. Therefore, make sure you gather as much relevant data as possible (we wrote a whole article about that). Introducing new mobility types is about teaching people something new. Check studies, analyze your target groups, get inspired by behavioral theories and most importantly – learn from data that your app generates. Everything can push you in the right direction. Bottom line? Always validate your ideas with the target group and available data.

8. Solve and implement one use case at a time

Keep your focus, and don't try to implement everything at once. When you're building MaaS or services with more mobility modes, choose your priority and solve one use case entirely before moving to another. Each mobility type is usually aimed at a different target group which creates a need for validation. Handling different segments and different providers all at once is almost impossible, so prioritize. If you plan to include 5 mobility modes, focus mainly on 2 or 3, which bring the biggest impact.

9. Keep it under 2 transfers

Users don't want to have more than 2 transfers on their trip. Think about that when making the perfect routing.

10. Deal with sub-urban areas

Suburban areas provide immense potential for mobility services. Everyone talks about how shared mobility will transform our first or last mile, and we agree! Most suburban areas have no metro, long waiting times for buses, and the stations are far from each other, creating the perfect playground for new services. Everyone wants to waste less time commuting. If a scooter can take you to the nearest subway in 3 minutes instead of 10 minutes, you would have to spend on the bus. That's a significant gain.

So why aren't the suburbs already swarming with e-scooters, shared cars, or bikes? Because they are treacherous too. Take the weather, for example. When it rains in the morning, no one wants to ride on a scooter or bike. Still, people have to make it to work, so they'll choose PT or cars. That means a wasted day for your service because even if the sun starts to shine, your vehicles will remain on the outskirts and won't serve people on their way from work. Last but not least, you need a significantly larger fleet to cover suburbs than just a broader city center, which brings us to the final point.

11. Density is everything

Starting out small won't take you far in the mobility industry. Why? Because you must cover your city thoroughly if you wish to attract users. Most people are willing to use a shared vehicle if it's less than 5 minutes walk away. When it's 10 minutes, 50 %+ won't make it. Only 5 % of users are so stubborn that they will walk for 15 minutes to rent your vehicle. Therefore the density of your vehicles is crucial. Sure, you can compensate for lesser cars by multi routing users towards them, but it's not that convenient, and people aren't used to it.

How do you solve density problems? Either you manage to have at least 2 vehicles per square kilometer or integrate more services from the same mobility mode. If you choose the latter, don't forget about those deep integrations so that everything is seamless for users.

These are our lessons learned and takeaways from designing, building, and operating mobility services. We have already participated in many focus groups, read studies, and tried to understand different behavior, so build on our knowledge and don't fall for the same mistakes.

Reach out to get more information.

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