According to the data in the latest INRIX Global Traffic Scorecard, traffic congestion has been growing at a substantial rate over the past couple of years. The data is interesting, but a bit concerning as well: it shows that commuters in big cities lose up to 100 hours in traffic jams, with some of the slowest traffic in congested periods being below the speed of walking. If you speak money: the drivers lose up to $3,000 per year due to being stuck in traffic.
There are various approaches to mitigate traffic congestion, such as increasing road capacity, moving business HQs to outer city areas, or introducing autonomous vehicles. There is one in particular which may not sound as majestic as others, but is certainly effective and has already sparked real change in many cities: ridesharing.
The idea of “getting more people into fewer cars” (as Uber put it) has been around for a while, but it was mainly used in long-distance rides. It never got its foot (or wheel? heh) into crowded city centers because it couldn’t compete with the convenience of public transport or the comfort of personal cars.
Now, however, there’s a number of last-mile solutions that are redrawing the city road maps worldwide and completely changing the way we travel from one point to another.
How are they reinventing transportation industry, with commuters so accustomed to personal cars, and what does it take for them to compete in such a market?
The first revolution
Car sharing apps were the first to prove that there’s a cheaper and more convenient way to get around in the city than any other “traditional” type of transport. Looking back, they highlighted what are now obvious drawbacks to public transport, taxis, and personal cars. Public transport doesn't have a flexible enough schedule and is often overcrowded. Taxis are too expensive for the level of quality service they provide, and the feedback system is either too strenuous to deal with for users, or non-existent. Personal cars are certainly the most comfortable option, but also expensive to own and maintain.
The transformation of the transportation industry started with the introduction of Uber to the market. It’s not hard to see now why it took on the world so quickly. It combined geolocation with the car hire service and created a platform available to anyone who needed a ride or wanted to provide one. Moreover, it provided more transparency, in that it estimated the cost for users in advance, offered a real-time rating system, and reliable customer support.
Uber has certainly stirred things up in the industry, but the revolution didn't stop there. New apps have entered the market and expanded and/or upgraded the concept of ridesharing, offering a better experience for users. A new market is on the rise, and the battle is no longer between taxis and rideshare apps, but between rideshare apps themselves.
A new battleground
New entrants to the ride hiring market have been able to locate what Uber was missing and build their competitive advantage on that.
For example, Lyft, Uber’s biggest rival in the U.S., enables passengers to split the cost during their ride or tip the driver within the app. (Uber also introduced fare splitting among passengers, but not driver tips). Another car sharing app, Juno, built their whole brand around the “socially responsible way to ride” by creating better experience and work conditions for drivers.
What’s more, the market is not only limited to car sharing apps. After all, if you’re stuck in traffic for half an hour every day, it doesn’t matter if you’re in your own car or someone else’s. This is where bike sharing fills the gap as a more flexible last-mile transportation solution.
Dockless bike sharing is a newer concept rapidly spreading worldwide. In China, there are now 16 million dockless bikes in the country, and each is used on average three times a day, according to the Chinese State Information Center's Sharing Economy Research Center. In the US, the number of bike-share bicycles doubled in 2017, according to National Association for City Transportation Officials (NACTO).
Easy-to-use apps, close availability of bikes, significantly cheaper prices, and the flexibility of leaving the bike wherever you want and locking it within the app - those are all the reasons why the idea took off in many cities.
In some parts of the world, ride sharing started out as part of environmental campaigns. Ofo, bike sharing service in China, was created in Peking University by a student who noticed a lot of bike litter around the campus. The idea caught on and today Ofo operates in more than 250 cities internationally and generates over 32 million daily rides.
The solutions are getting more creative and respond to the specific needs of local commuters in each city. Bird, for example, introduced electric scooters as an option that bridges the gap between cars and bikes.
Finally, even Uber has also recently joined the two-wheel party with its recent introduction of Uber Bike, powered by JUMP, the first company in the US to have introduced dockless bike sharing.
Another wheely good idea
Rideshare industry is an exciting, but a competitive market where everyone strives to provide the fastest, most secure, and user-friendly experience for commuters. City dynamics are changing and users are continuously demanding more. Every step of the user journey matters, especially in user acquisition.
The most important aspect in this context is the fact that rideshare apps are used spontaneously and instantaneously, right when the need for a lift arises. In many cases, even the initial download & registration happen on the go, when other transportation means fail to deliver. If the onboarding process is too long or too complicated, given the urgency of the situation, the user can quickly give up and try with another service.
User onboarding processes not only need to be quick but also secure. The users have to be able to enter their data into the app quickly, and the system needs to gather enough data to be able to ensure their authenticity. Fortunately, with intelligent mobile tech that doesn’t need to be a trade-off. For example, when opening the app for the first time, the user can simply scan their ID card and all data can be entered and verified within seconds.
What’s more, in the case of most car sharing apps (and car rentals for that matter), not just the driver, but also the vehicle info can be captured. Pairing the data from the driver’s license with the VIN (vehicle identification number) helps prevent frauds, ensures a good-quality service, and is a neat UX improvement for the drivers and the companies.
When talking about security, it’s important to look at ridesharing in the context of the whole transportation “ecosystem”. Rideshare apps will be getting more intertwined with other solutions and parts of the transportation system, such as autonomous vehicles, transportation networks, etc. As these parts become more connected and smarter, security becomes a more complex issue. Within that context, streamlining processes for user registration, data and transaction management is essential because it lays a good foundation for building a data-driven, robust security system that will detect and mitigate all possible threats.
Rideshare apps don’t have to face a trade-off between great UX and security, thanks to intelligent mobile tech.
We hope you found our insight into the rideshare industry useful. If you have any thoughts or questions on the topic, feel free to get in touch with us here. We’d love to have a chat with you!