Incentivizing Urban Mobility
The notion of urban mobility—how people and things get from one place to another in cities—is in a state of great change. As the task of moving about in a timely fashion grows more complex and expensive, organizations involved with transportation (governments, transit authorities, taxi services, ride share companies, even those who plan sidewalks and crosswalks for pedestrians) are being asked urgent questions about how to get more people to more places, faster.
In an era of smart cities, part of the answer lies in being able to influence customer decisions when it comes to their transit options. That is, how do you get people to make choices that help keep the traffic flowing in the most optimal ways possible?
Toronto-based Velocia is a MaaS (mobility as a service) platform that incentivizes and rewards transportation choices by pairing its app with transit services, such as car sharing, bike sharing, taxi services and even mass transit. When people use Velocia to order a paired service (and agree to share their data), or when their choices improve urban mobility, they earn points. They can then redeem the points for more mobility services. Velocia or its partners use data collected to help guide a multitude of decisions, from where to put bike share stations to how to program traffic lights.“Rewarding behaviours that are lifestyle choices makes it more personal and self-gratifying. We are giving power to users to define their own mobility”, says Hamid Akbari, Chairman of Velocia.
Incentives have long been used to influence behaviour. Tax incentives encourage giving to charity. Loyalty points help drive consumers to a particular airline, drug store or hotel chain. When it comes to transit within cities, however, these programs hardly exist. What’s more, the aforementioned models for loyalty programs are less than ideal. They are all closed systems that reward customers for spending money in a single place with products or services that can only be redeemed from the same organization.
When it comes to mobility ecosystems that move people or goods from point A to B, there will be closed and open systems. Even without incentive programs, closed systems are a problem for mobility. First, they do not communicate with each other. A trip that includes an Uber from office to metro, and then a bike share home requires three different applications with three separate billing and user platforms. Second, closed systems are designed for exclusive control of existing resources to maximize one party’s gain rather than synergy created by many players contributing new resources. Ridership on public transit is on the decline whereas people will experience a seamless, multi-modal, mobility experience and reduced traffic congestion with an open digital infrastructure that allows for cooperation and collaboration. Third, integrated mobility solutions require significant flexibility to build local private-public partnerships, adapt to municipal governance needs, and leverage on-the-ground transportation companies and entrepreneurs, all of which are difficult to achieve with monopoly-seeking, closed ecosystems.
Velocia contributes to the growth of an open mobility ecosystem by enabling interdependence, collaboration, and local adaptation. Any service can build off the platform and enrol their customers in the loyalty points program. It is also integrated. It can be paired with virtually any mobility app—from Uber and taxi to commuter train and bike sharing—to offer customers a seamless ride from point A to B and anywhere in between they wish to go.
In fact, Velocia’s platform does not merely offer openness, it relies on it. Currently, data collected by mobility services is captured and held in silos to be used by that particular service and no one else. That data is never shared, making it impossible for mobility companies or transit authorities to extract truly useful data about consumer patterns and preferences. By limiting themselves to their own user data, they never realize the advantages of an open system.
Velocia believes an open ecosystem will have numerous benefits. It would result in a more level playing field as startups would be able to use data the same way as incumbents do. Carmakers can use the data to better understand the needs of owner-drivers. Airlines can not only get you from one airport to another, but with one app they can bring you from your home to the departure airport and from the arrivals gate to a hotel. Auto insurance companies can use the data to offer discounts to those who leave their cars at home more often. Even gas retailers can benefit, by using collected data to help them decide where to place more pumps.
As Velocia was developing its model, it saw blockchain as an enabling technology. With blockchain, users own their data, can share it securely with whomever they choose and be rewarded with financial incentives to do so.1A user will sign in once and will be rewarded if they choose to share their information with other companies. Each user has the option to give information, but they can also retain or retract the information thanks to blockchain protocols.
User identities, authentications, user reviews and mobility data would all rely on blockchain. This would allow the platform to be decentralized, which would help incentivize providers to use the platform without worrying about governance issues.
Benefits to cities
The model Velocia envisions is one that includes public as well as private transit, reflecting the way most people get around. The hope is that users will be able to buy their commuter train ticket and order an Uber from the same app. This will be made possible by the company’s open platform, which permits and encourages collaboration, and can incentivize consumer behavior across all levels.
The volume and type of data collected by a Velocia platform can help municipalities deal with the pressing issues of congestion and emissions. It offers cities direct touch points with individuals to influence the way they travel in and around their city. This may lead to smarter, more effective decisions about congestion-reduction schemes such as carpooling. It can also help with reducing emissions by incentivizing people to take greener alternatives such as bike or scooter shares or public transit.
An evolving marketplace
While Velocia is certain that the future of transit is wrapped up tightly with MaaS, several challenges lie ahead for the company. One is finding partners to sign onto the platform, which in these early days is a time-consuming, one-on-one process. The hope is that once the platform gains traction, others services will sign on in a frictionless process.
One source of participant hesitation is blockchain, which the company admits is still in its infancy. Several aspects of blockchain are not ready for seamless user experience, real-time applications or the required scalability. Because of this, participants in the Velocia ecosystem have been both intrigued but cautious when it comes to their reliance on blockchain technology. To help mitigate concerns, the company distilled the most important aspects of blockchain and jettisoned the parts that left participants confused or nervous.