New Solutions for Transportation in Major Urban Cities
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New Solutions for Transportation in Major Urban Cities

Photo by:   Mike Ramírez Mx
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Rodrigo Andrade By Rodrigo Andrade | Journalist & Industry Analyst - Tue, 11/08/2022 - 08:50

With the COVID-19 pandemic, teleworking became an interesting option for thousands of businesses and schools in Mexico, however with more and more people returning to their pre-pandemic routine, it seems that transportations problems are becoming more evident than ever. 

The Mexico City metropolitan area offers a variety of public transportation solutions like Metro, Metrobús, trolleybuses, bicycles and mini buses that aim to meet the needs of millions of commuters. However, this portfolio of options is often insufficient: Metrobús does not cover the whole metropolitan area, the Metro is normally crowded during rush hours and other options for shorter distances are not reliable due to the lack of fixed schedules, routes and lingering insecurity issues. 

Shared mobility rises as a new solution to fill the gaps in the traditional mobility offering. These solutions cover all means of private transportation, from bicycles and electronic scooters to cars and vans, which gives the user the freedom to choose the method that best fits their mobility needs at any given time. The population without a vehicle is growing, yet experts agree that customers still want to have the option of a private and reliable transportation method. “People are looking for long-term options that provide freedom without commitment. There is a segment we call ‘car-hesitants:’ 25 to 35-year-olds who are earning enough to buy their first car but do not want the commitment, hassle or risk,” said Sampo Hietanen, Founder and CEO, MaaS Global and Whim.

According to Future Bridge, vehicle sales are expected to drop by 2030 as a result of the growing trend of sharing a vehicle. The future of shared mobility seems bright as the market is forecast to reach a value of US$180 billion in 2025, a CAGR of 16 percent since 2018. Mexico will follow this same trend, with the sector expected to reach US$17 billion, with a user penetration of 79.4 percent in 2022. This number is expected to grow to 88.9 percent by 2026, according to Statista. Although this represents great areas of opportunity within the automotive sector, it invariably brings new threats to traditional OEM working methods. The industry must start veering toward a service, rather than a product-oriented approach.

The solution for millions of people lies in mixing public and private transportation services to obtain better results, especially in cities like Mexico where it is virtually impossible to avoid traffic during rush hours. Mobility as a Service (MaaS) hopes to meet this need by re-shaping the way citizens interact with transportation systems to be more efficient at moving around. 

Mobility as a Service 

According to Deloitte, MaaS relies on the massification of smartphones and digital platforms to provide integral end-to-end trip planning services that incorporate every type of transportation system, making use of booking, electronic ticketing and payment services. Whim was one of the first applications to encourage the use of this service. The aim of the company is to “create a world where people do not have to own a car to live a fulfilling life.” 

A key driver for the development of MaaS is the growing preference among users for sustainable alternatives to their day-to-day consumption. In the EU, 40 percent of carbon emissions are generated by vehicles. At the same time, 38 percent of car owners in the region would give up their vehicle if they have the possibility to do so, representing 70 million vehicles that could be off the road, according to data from the consulting firm Frost & Sullivan, as reported by MBN. 

“Fifteen to 35-year-olds do not dream of owning a car anymore, especially in the developed world’s urban areas. Even in the US, the dreamland for car ownership, people have been getting their driver’s license at an increasingly later age for the past two decades. However, those without cars are extremely underserved and their freedom to move on a whim is limited. Our job is to provide these services without impacting personal freedom,” states Hietanen.

While Mexicans still value vehicle ownership, experts agree that this trend is shifting with younger generations. It is clear that mobility solutions are needed in the country and that, so far, no single solution has been able to meet the growing demand for these in the country’s major urban centers. “OEMs’ collaborations with dealerships will remain crucial. Vehicles will be associated with much more than taking people from point A to point B,” said Jaime Pedraza, CEO, AutomotiveSolutions, at Mexico Automotive Summit 2022 ECHO

Photo by:   Mike Ramírez Mx

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