Where mobility goes next: lessons from ride pooling

In the twentieth century most modes of transport, like cars, trains, and buses, were either fully shared or fully owned and used privately. But in the twenty-first century, a grey area has emerged between what is owned and what is shared. Carsharing, where people rent vehicles for a short amount of time (possibly just for an hour), exists in this shared-private spectrum, and there are several similar mobility options on the horizon.

One promising model is ride pooling. In busy urban areas, the passenger enters their pickup point and destination into an app and is told where their nearest pickup point is - hopefully only a short walk away. The passenger is then picked up by a vehicle, possibly with other passengers who need to go in the same direction, and then is dropped off at (or near) their destination. Some global brands like Uber, which marry technology with their mobility options, have already introduced a ‘ride pooling’ option to their offering. 

For the businesses that operate these services, ride pooling offers a lower cost base than individual carsharing systems. This is because the vehicles are shared between two or more passengers and because there is no need to go exactly to each passenger’s final destination. This enables the vehicle to spend more time being used by paying passengers per journey than in a traditional carsharing model.

“Ride pooling could be a public or private service,” says Olivier Guillot, Partner, Mazars, “a public version could seek to replace publicly-run bus services. A private version could either comprise drivers’ privately-owned vehicles or operate as a distinct fleet by a central operator.”

Ride pooling as the future of urban transport

If it can meet its potential, ride pooling offers a number of advantages.

Ease and cost - For busy areas and travel times, ride pooling has the potential to be as easy to use as the carsharing services already established in many cities. But by having passengers share journeys, it can be a cheaper option than both individually owned cars and traditional carsharing.

Network efficiency – Ride pooling could make urban transport systems more efficient on aggregate. There is evidence that when used to complement traditional bus services and other forms of urban transport, it improves the efficiency of the network as a whole.

Emissions reduction - Ride pooling could reduce emissions as it has the potential to enable the same number of journeys with fewer cars. It also has the potential for cars to be used more efficiently as privately-owned cars sit empty 95% of the time.

Research from the US found that a ride pooling service that uses fuel-efficient vehicles and has an average occupancy of two passengers would offer an efficiency improvement of 66.5% compared to private vehicles. That is even more energy efficient than most bus services.

The hurdles to ride pooling

Ride pooling is a relatively untested model at present, only being offered by some major mobility players in a handful of cities. It could, however, take off if a number of conditions - organisational, cultural, and technological - are met.

The key organisational challenge is centralised route coordination. Ride pool operators need to know where and when to schedule routes. That involves balancing considerations of which pick-up points work logistically and prove popular at times of peak demand with using as few vehicles as possible to take as many people comfortably as possible. This is a test of operators’ data collection and analytics capability, (discussed further below).

It will also rely on an assessment of where journey densities are high enough to make ride pooling a viable option. One simulation calculated that almost all trips in cities could be taken in shared cars if the trip demand density was at least 6.5 trips per hour per square kilometre.

Ride pooling vs buses

If ride pooling is to replace publicly operated bus services, perhaps as a client of the local authority, the authority will have to learn how to tender and write public transport contracts in a new way because ride pooling requires different key performance indicators from buses. Peter Cudlip, Partner, Mazars, explains: “Contract structures for conventional bussing services are typically based on kilometres or time-based service payments, while on-demand bus contracts are likely to depend on number of users.” Local authorities will also have to alter how they measure success. “While ‘on-time’ metrics work for traditional bussing, ‘wait time’ will be more suitable for “on-demand” services,” he explains.

Ride pooling will require cultural shifts as well: people rarely share vehicles smaller than buses (at present) but culture can change, as it did with house-sharing to enable the rise of Airbnb, for instance.

Of course, the pandemic has already changed norms. Road traffic is down worldwide, and though it is creeping back towards pre-pandemic levels, many are using the opportunity to reimagine their own transport use. A survey of workers in the UK found half would not return to their normal commute.

Ride pooling relies on passengers feeling safe enough to travel in a vehicle with people they don’t know, a consumer behaviour seriously impacted by Covid-19. “The pandemic could slow pooling’s potential as people might want to travel alone to avoid possible spreads of infection,” says Cudlip. “Carsharing operators, for their part, have to commit to serious health and safety precautions if they want to have passengers feel safe, now and after the pandemic.”

Pooling relies on technology too. Whereas bus networks use carefully planned routes that are drawn then tweaked over months and years, the shift to an on-demand model means fleets and networks have to adapt on a daily, even hourly, basis. “It can be difficult to predict late arrivals or ‘no-shows’ by riders, leading to a sub-optimal service for those who are on time,” warns Cudlip. “This can be partly solved, however, by using artificial intelligence to predict busy areas and traffic densities.”

As an operator, success in the ride pooling market will rest on the ability to analyse data and assess the most efficient routes, areas, and capacities. Ultimately, the ride pooling business could become a competition between operators’ data and analytics capabilities.

If ride pooling becomes established in some areas, there is no reason why it cannot be extended to solve other mobility challenges. Could a similar model be used for logistics, especially for the last mile of the delivery? Could ride pooling encourage greater sharing of public and private application programming interface to offer more seamless information for urban passengers? “Many pragmatic partnerships between public and private actors are already on track,” says Guillot. “Whenever there’s a chance of a win-win agreement that optimises the transport experience and captures revenues, a deal is always possible.”