The Future of Personal Transportation Will Be Shared (Part 2)

share_rideIn the future, every car is going to be part of the future personal transportation service. If there’s a vehicle with available empty seats going to same direction than you are, the chances are that you’ll get onboard with that car. Things are changing – the younger generation no longer sees owning a BMW as something cool, but however, getting from place A to B with just a few clicks on your iPhone is something they want. There are already several startups offering services to get you from A to B but they are struggling with various problems, and to be honest, the current services are not yet truly disruptive either. Yet based on the initial success of these services one may be assured that there is also a true revolution in the personal transportation coming up. Strong resistance from the traditional taxi companies and taxi associations is only one proof of that. This blog post is the first one in series of blog posts discussing the evolution in the personal transportation market.

In my previous post, the key problems of existing Black Car and Community Driver services were discussed. Now it’s time to consider the solutions.

The solution is simple. Let’s integrate a really smart ridesharing backend to these services. This is the answer to the challenges related to demand, supply, pricing and quality. Even though some of these startups already call themselves as “ridesharing services”, they are actually not. In my opinion, ridesharing means a service where the ride is shared by people all traveling from different addresses. So taking two persons from A to B by a community-driver is not ridesharing in that sense, but simply a taxi trip driven by a driver. And whether this driver is a professional driver or community-driver does not really make a difference.

What’s true ridesharing like?

In true ridesharing model the vehicle (car, van, minibus) is picking up and dropping off passengers in such an order that nobody needs to take too long extra ride because of other passengers. But at any time there may be one or more other passengers in the car. In the real-time ridesharing service people wanting to get a ride are matched in real-time to any suitable vehicle already in motion, but carefully avoiding not extending the trip duration of those people in the vehicle already too much.

The technological solution to the ridesharing may come from a rather surprising direction. There are thousands of vehicles in the US alone being part of real-time ridesharing services right now, taking huge number of people from place A to B every day. Some of these systems are quite advanced: trips can be ordered at the last minute, passenger is promised rather small pickup window (15 minutes) and the promised trip travel time is kept as good as possible. As the passengers may sometimes be late, or not show up at all, and the traffic may cause extra delays, the system is continuously optimizing everything in order to enable the service operator to make the maximum profit while keeping the trip “quality” promise given to every customer. Where are these services and who are using these services? These services are actually those operated under the ADA regulation (Americans with Disabilities Act) in the US. It says that transit authorities must provide comparable paratransit or other special transportation services to individuals with disabilities who cannot use fixed route bus services, unless an undue burden would result. In many cases the most cost-efficient means of arranging this is with demand-responsive transportation (DRT) service. Some of these services are really advanced. You can book a ride with relatively short notice if you like, the promised pick-up window is only 15 minutes and your trip is not extended more than certain extra duration. Most of the orders are made with a telephone call, but there are really no reasons why the booking could not be done with a smart phone or a web service. The magic behind the curtains is the full-automatic real-time matching and an optimization software that requires no human intervention. Not all the paratransit services are this good yet, but number of those is increasing every month. The state of Pennsylvania is showing good example and has successfully implemented large number of advanced DRT systems already.

Introducing Economy Class of personal transportation

So what happens when the companies in this field will implement true ridesharing? People will use their iPhone just like now to order a trip. But instead of having only one option available (the current “ride alone” option) there will be another option available, “ridesharing”. Another way to call these two travel classes would be to call them “Business Class” and “Economy Class”. In the business class you travel with more comfort while in the economy class you give up some comfort for substantial savings in the ticket cost. The difference being of course that unlike in the air travel, in ridesharing the trip duration for economy class may be a bit longer than in the business class.

So how would it actually work? Read more about that in my next blog post.