What is Alternative Mobility? And Why Digital Identity Is Crucial For Its Future

A fundamental analysis of the status-quo of urban transportation

A new mobility ecosystem is upon us. Cities are changing at a pace like never before, largely made possible through technological advancements.

It has disrupted existing industries and paved the way for a shared mobility market - one that redefines the way people move and interact. Being able to effortlessly move across cities enabled billions across the globe to access opportunities, tap into great products and services, while connecting with people that are important to them.

The growth of the mobility industry and the momentum it gained came at a cost - traditional transport was incredibly time-consuming and lacked advanced safety systems.

What’s driving the next frontier in urban mobility?

Traditional transport burns time and cost - it forces many to spend hours of their lives in traffic, with reports highlighting that the average Los Angeles citizen spent over 102 hours stranded in traffic.

Cities in Europe, Latin America and Asia were seeing similar trends. Nearly 60-90 hours were spent every year being stuck in road traffic - a statistic that carries significant costs for businesses and the economy at large.

Being trapped in gridlock cost the U.S. alone a staggering $305 billion last year and the city of London saw its direct and indirect costs climb more than 8 billion euros. The environmental impact of traffic is also significant. It accounts for over 70 percent of carbon emissions in Europe.

Urban mobility is looking to tackle just this - the flawed transport system.

The status-quo of urban transportation is rapidly shifting

The mobility landscape is changing. In recent years, enabled by robust technology solutions, we are looking at a rise of alternative mobility which include more efficient means of transport mushrooming across the globe - including ride sharing, autonomous vehicles (AVs), mobility as a service (MaaS) and some of the biggest automakers developing electric vehicles (EVs). This caters to the rising mass of customers that demand clean and sustainable solutions to travel.

The rise of shared mobility - a market valued at $619.5 billion by 2025

Digitalization welcomed a new wave of mobility services that included app-ordering services, peer-to-peer car sharing, ride-sharing, free-floating services and car-pooling. This has prompted many customers to resort to alternatives like electric scooters and bikes, and other ride-sharing services instead of relying on traditional public transport or taxis.

“Challenging the economic efficiency of car ownership is exactly what is at the heart of all mobility services offers. And consumers are convinced with this message," a research report by IPSOS highlighted.

Thus, more than 50% of current car owners predict that instead of owning a car, people will use shared mobility services in future, as it will be the cheaper option,” the report said.

A game changer: Alternative mobility gives rise to advanced technologies

With alternative mobility slowly but surely replacing the ownership culture, ridesharing has shifted its dynamics. From a time when customers touted ride-sharing to be a novel experience, it has now becoming a base expectation - all of it largely enabled through technology.

The boom birthed electric scooter startups like Bird and Lime that expanded quickly, acquired a significant number of customers and soon penetrated into markets such as Bogota and Mexico City, densely populated regions that were known for their crippling traffic and heavy congestion during peak hours. Public transport in some of the major cities in major Latin American cities were often stressful for the traveler.

Enter alternative mobility services. Startups like Lime and Bird, valued at over $1.1 billion and $2 billion respectively in just under 14 months after founding, have captured a sizeable market.

Investors are betting big on several players in the bike sharing sector, a space that’s now witnessing billions in funding flowing in.

The increased funding has enabled the platforms to expand and resolve cracks in their growth model. Many of the startups have spearheaded alternative forms of transport for users, helping reduce the negative impact non-electric vehicles have on the environment - be it carbon emissions, greenhouse gases and higher fuel usage. Over the long term, this business model is sustainable, clean and will support future technologies that enable electric vehicles.

Better yet, a large number of internet-based technologies have permeated the market - ensuring that safety and security are not compromised. Intelligent transportation systems (ITS) are seeing a boom, with advanced features expected to further augment the market in the future.

"Generally, the interests of business (mobility providers) and city authorities coincide, with both parts aiming to reduce the number of cars on the roads," according to a report by IPSOS.

“Free parking for car-sharing vehicles, tax privileges for electric cars, high-occupancy vehicle lanes, allowance to use public transport lanes for electric cars: these are just a few of many vivid examples of cities supporting the development of mobility into its current form. Surely, more and more different pilots of state-business partnerships will appear,” it added.

Behind the curtain, multiple technologies power the mobility sector

There are a variety of technologies including real-time GPS, identity and access management, IoT, insurtech and mobile computing that the mobility sector uses to keep their services running smoothly. Shared vehicles like bikes, scooters or cars tap into IoT to gather real-time information through the internet.

When it comes to shared mobility, GPS is used to track the vehicle, allow locking and unlocking through the app and even enables options like collecting data about the vehicle status to predict maintenance cycles.

How does this help companies? It allows them to ensure evenly distributed vehicles, saving millions in maintenance costs and helping them track vehicles in order to prevent theft.

However, the data that's collected may be shared with other third parties like insurtech companies. Simply put, insurtech is the set of technologies that disrupt the insurance industry.

It enables customized policies that are dynamically priced and easily accessible via mobile. The customization oftentimes relies on data collected through IoT.

So if a user rents a scooter, the insurtech company could provide him with an individual offer based on this driving style from previous routes.

Eventually, all these technologies form a connected ecosystem that support the rise of shared mobility services.

A McKinsey report remarked that “currently just 12 percent of cars are equipped with embedded connectivity solutions, and monetisation is still weak (less than $1.5 billion in revenue). But this is set to change.”

The future of mobility is centered around the user

Shared mobility may be an easy nut to crack, but like most services, relies heavily on its users. The entire ecosystem is kept buoyant by its users - a central figure of all intersecting technologies. This extends the age old access management issue - is the user allowed to access the vehicle? And even more important: Is the user really who he or she claims to be?

Creating a Digital Identity for users enables a frictionless sharing mobility

Without connecting the data to a real human being, the system is incomplete. For example, tracking a bike might be important for anti-theft purposes, but if something were to happen, the insurance claim should be addressed to an actual person. It is not enough to connect the data with an online pseudonym.

While access management does not solely revolve around access to accounts, it even includes sensitive details like the location of the user and the places they visited. Here’s where trusted digital identity becomes increasingly important.

Companies run the risk of theft, vandalism and may face damage claims. This may seem innocuous - but what if the user faced legal action or had a history of cases that indicated offense or assault? Riders may need to know who they’re sharing their ride with and if they are indeed the person they claim to be.

This is incredibly important when it comes to safety, and confirming the user’s identity through digital identity platforms will amplify security.

Strong identity access management (IAM) solutions can bolster the enterprise's security. Through biometric technology, digital identity verification platforms help companies identify users, while ensuring the user gets to control their data.

The sharing economy hinges on trust. And that’s why digital identities matter.

The rise of the sharing economy gives an average person the opportunity to start their own venture - be it running a cab business or renting out their properties. Customers today have a lot more options at hand through companies participating in the shared economy - a space that largely hinges on trust.

It’s high time enterprises rethink their approach to identifying their users and authenticating that they are who they claim to be.

Verified and reliable digital identities are vital for the future of shared mobility. Digital identity and access management platforms can connect dozens of government or official IDs from across the globe to prove true identities and build trust between the enterprise and their users.