The Case for Investment

The c.$7.0 trillion global mobility market is already changing profoundly in the largest, wealthiest cities. As we pay-as-we-go, a ‘cloud’ mobility service system is emerging, disentangling ownership from usage. In San Francisco alone, ride hailing is 4x bigger than the local taxi market, indicating the potential for the service.

If all global tier 1 cities (e.g. London, New York, Paris etc) fostered ride-hailing businesses 4x the size of their local taxi markets ride hailing is set to grow eightfold to $285billion by 2030 (Source: Rethinking Mobility Goldman Sachs 2017)

Whether for work, education, shopping or simply to visit friends, people want and need to travel. Globally, we spend $7trillion each year on ‘mobility’ including buying and running cars, and various forms of public transport (excluding air travel).

The urban population is growing, driven by global population growth and amplified by rural to urban migration. Based on UNPD projections, the urban population is set to grow at a compound annual growth rate (CAGR) of 1.6% to 2030, vs. 2.2% average growth over the past two decades. With more people comes increased demand for mobility. However, cities’s mobility ‘capacity’ is not growing with population, as the car runs out of space in which to travel. Worsening congestion and pollution are driving authorities to legislate cars out of many large urban centres, and this is in turn creating an opportunity for new mobility models, in particular pay-as-you-go models, such as ride-hailing apps, that separate car usage from car ownership.

‘Pay-as-you go’ mobility is on the rise. A transition is under way from a world where moving people, goods and services requires owning a vehicle, to one where we can ‘bid’ for single journeys’ or ‘packets’ of ‘mobility’ and consume them on a pay-as-you-go basis. The switch is as much about convenience as it is about cost. It is becoming increasingly likely that in cities, we travel in a vehicle we do not own.

Ride-hailing services like Uber have essentially invented a ‘cloud’ mobility network (akin to cloud computing). Whereas today we ask a specific service to take us from A to B, we are moving to a world where we request to go from A to B, and have the ‘cloud’ offer mobility solutions (perhaps involving various prices, times, speeds or levels of luxury). ‘Aggregator’ services will be the point of contact for the consumer, i.e. the app through which we access a broadening range of mobility options, including ride sharing, public transport, and potentially bicycle hire and other options.

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