Finding a Way to Rent Carshare Cars to Ridesharing Drivers
Interview with RIDECELL, Mark Thomas
2020년 03월호 지면기사  /  written by Sangmin Han@autoelectronics.co.kr



In January, AE spoke with Mark Thomas, VP of Ridecell, who gave a keynote speech at the MaaS Forum at Automotive World 2020 in Japan, on the profitability of shared mobility and preparations for self-driving.

written by Sangmin Han@autoelectronics.co.kr




Q1. Under the theme "Automatic Delays Open Up Shared Mobility Opportunities," you highlighted the meaning of autonomous driving and the right course of preparation with the right partners in the shared mobility services. Why can Ridecell be the best partner for companies preparing for the sharing business, businesses doing it, and others? And Please briefly introduce Ridecell and main milestones.
A. In the very long term, autonomous driving will be solved and it will change transportation forever. Once autonomous driving is safe and widespread, our need to own vehicles will drop, since it will be significantly cheaper and more comfortable than using a car we own. If at the press of a button you can request the perfect car for your needs, and then enjoy a relaxing ride to the destination, is it really required to have the car sit and wait? Or can you just call another car when you’re ready to go out again? Much in the same way that people no longer feel the need to own a music CD since they can listen to music anytime using their phones, we won’t need to own a vehicle if we can get anywhere anytime using our phones to call for a ride. And like with music, which is cheaper to subscribe than try to buy and own CD’s, using shared mobility will be less expensive and more convenient than owning a car.
 
Ridecell makes the sharing platform where companies that are getting into the business today for carsharing or ride hailing can start off with the software solution provided by Ridecell and run their own vehicle sharing services. It’s the shared mobility cloud that offers all the features and software required to get into the business of running a profitable shared mobility services. Some of our customers are running station based, scheduled carsharing, others are using it for free floating on demand carsharing. And others yet are running ride hailing services using the Ridecell platform. We are also making a fleet operations product that helps any fleet be better cleaned, maintained and charged/fueled using our Fleet Ops product. Ridecell is the only company in the world that will take you from driven to driverless shared mobility and let you build and run high-yield shared mobility fleets today.


Q2. I know You are an IoT expert. How does this connect to Ridecell?
A. IoT is a critical element of shared mobility. With IoT, everything is connected all the time, and information from things is used to make decisions about how the things are managed. With our solution, cars used in a carsharing service are always connected. They have the ability to call for assistance when they recognize that they are low in gasoline or low in charge. They also can call for a tow or for maintenance when they recognize that they have low tire pressure or some issues with the engine. Letting the vehicle call for their own cleaning, maintenance and refuel/recharge is an important step.

The car also uses IoT to let the car identify the proper driver of the vehicle. When the car detects the phone or the command from the owner from their phone the car will unlock and also allow itself to be started. It’s important that the car be able to share the full vehicle state so that if the person gets out of the car and leaves, if they forget to roll up the window or leave the trunk open the car can alert the driver and request they fix this situation before ending their reservation. In the future the cars wil have cameras watching the inside of the car, so that when someone leaves an item the car can alert the driver and ask them to pick it up before they go. It will also be able to smell what’s in the car, and detect smoking and alert the driver immediately to put out the cigarette. So IoT keeps the cars clean and safely locked in addition to being used to provide access and permission to drive. 



Mark Thomas compared the situation of current car sharing and ride hailing, saying the importance of car sharing business for future shared mobility.

Q3. While there are mania looking for vinyls, as you said the change in ownership of cars is like a ‘change in the way they buy musics’. Ridecell is accumulating the experience of sharing mobiles in various cities around the world. So I think you know better than anyone how fast this is accelerating. Please tell me the status.
A. When something becomes cheaper and more convenient to use, that’s when the world changes their ways. With music, if the streaming services like Melon or Spotify or Apple Music were $100/month, while convenient they would not replace people buying music CDs. However, when the price becomes less per month than even buying one CD and it’s more convenient, since there is no going to the store, no needing to load the CD into the player, no needing to carry CD’s anymore with you, that’s when the market takes off. Today, ride hailing like Uber is convenient but much more expensive than using your own car in all but the most expensive cities. It's convenient, but at $2.00/mile it’s about 3 times more expensive than driving yourself.

Carsharing is much cheaper but it requires walking to a car, driving it then finding parking when you are done which is frequently a difficult assignment. Once we have self driving cars, the cost of getting a ride somewhere will go to roughly half the total cost of using your own car. And be much mor convenient since you wont’ need to work about parking it. Or keeping it cleaned. Or maintained. Or insured. Or fueled up. It’s quite a set of responsibilities that are involved in keeping a car. With shared mobility, all of those go away.

 
Q4. Some media only highlight the fact that sharing mobility services such as Uber, Daimler-BMW and Maven are still experiencing profitability problems. What do you think about these news?
A. Getting into shared mobility is easy. Becoming profitable at it is much harder. Many of the failed carsharing initiatives were built with unsophisticated software that was designed to let people lock and unlock cars, but without much else to help run the operations of a vehicle fleet. It’s important to focus on things that delight the customer, help get more utilization of the vehicle and make it less expensive to operate the service. For customer delight, it’s important not just to have a good app and technology that works, it’s also important to have the cars always cleaned and charged. And parked where the customer demand will be. It’s important to have more than one business model for the cars.

For instance carsharing is used widely during the day but not at night. Ridehailing is used at night more than in the day. So successful operators should find a way to use the carshare cars for ridehailing at night. BMW ran their own ridehailing service as well as carsharing service all with the same fleet of vehicles. Finding a way to rent carshare cars to ridesharing drivers is a key element of being successful in this market. Finally operating a shared mobility fleet requires a specialized workforce management tool to direct the workers that clean and reposition and service the cars.  Ridecell is the only company in the world with a fleet operations management tool as well as complete software platform for carsharing and ridehailing designed for high yield shared mobility.



Early self-driving cars are not good drivers. Paid passengers will not be satisfied with inefficient and slow-moving cars.

 
Q5. You said improving the customer experience, increasing fleet utilization and operational efficiency were important. What are companies missing from the customer experience? I thank that functions such as path finding, repositioning and dispatch that reflect and predict real-time traffic are key to fleet management. Am I right to think so? What else is very important?
A. If you know where the customers will be when they request a car, you can make sure that there is always a car available for them when they are requesting it. For instance we know if there is a commuter who uses the car every morning to get to work. So with that analytics and understanding our customers are able to reposition vehicles to be nearby the commuter so that they magically are always delighted that there is a car whenever they need it. We also use big data to predict when cars are parked in places where there might not be much demand for them. Our system automatically changes the price of the car to offer a discount and encourage people to walk farther in order to use that car to save money. You can also incentivize users when there is a car that is parked in a street cleaning zone to encourage them to take the car that will likely be ticketed with a fine and instead of sending someone there to move it we get a customer a price discount for them to take that car.



The initial self-driving car will be very effective in repositioning the Free Flowing Car Sharing. 

 
Q6.  You emphasized the importance of car sharing for the future. I thought car-sharing and ride-hailing would be the same service in the era of autonomous driving. Is it wrong? 
A. In the long term, there will be no carsharing once ridehailing is autonomous. But in the medium term, there are many uses for autonomous driving that can help the carsharing operator. Today autonomous vehicles are not efficient drivers. They frequently can’t make a left turn, and so they are required to make three right turns. As a paying passenger, no one would be satisfied with a car that drive slowly and inefficiently. But if you were to use this earlier inefficient driving autonomous car to reposition itself or drive itself to the charging station when the charge was low, this could be done in the middle of the night when there are few people and cars on the street and with no one in the car to complain that it’s driving slow and not the fastest route.

 
Q7. Ridecell seems to have a variety of experiences and solutions, ranging from station-based and free-floating car sharing models to ride hailing and delivery services as well as electric and autonomous fleet types. What are the major differences and considerations in each business model?
A. Station based carsharing was the first kind of carsharing. It is when the car has a dedicated spot and the customer who uses the car must take the car from that spot and bring it back to that spot. It’s almost always rented by the hour and is scheduled ahead of time. This ability to reserve a car is important to customers. But the requirement to take the car back to the original parking spot is not convenient for people and as a result there is much less demand for this kind of carsharing. A more modern kind of carsharing is called free floating or one way carsharing. That’s when a user can reserve a car nearby when they are ready to use it, then walk to it and drive it where they are going.

They have the option to park the car and leave it whereever they are, as long as it’s in the service zone and in a legal parking spot. This is convenient because many times you just want to get somewhere and not have to pay for the car while you’re not using it. The disadvantage is that it’s harder to reserve a car ahead of time since there is no designated parking spot for these cars. Then there’s a mix and match combination where cars are parked in parking garages but they can be left in a different parking garage. It’s a mixture of the two above. This is convenient since to offer true free floating requires a permit from the city that gives the cars permission to park anywhere, including parking meter spots. Finally our company offers ridesharing software and apps that let companies start their own ridesharing service similar to an Uber or a Kakao service.



Three components of profitability: customer experience, Fleet utilization and operational efficiency


Q8. Prior to autonomous driving, EV fleet management will be a new challenge and opportunity with new elements such as charging. For example, what factors does Ridecell incorporate into the solution?
A. EVs require being charged. Gasoline cars require being refueled. The big difference between the two is that drivers are comfortable adding gas to a car and if you leave a credit card in the car they will refuel it. But with EV cars most customers don’t know how to charge and EV and because it takes so long to charge an EV customers aren’t interested in charging cars. However, with today’s long range EVs that can drive for 250 miles between a charge, the cars can be recharged once every three days. In this case, the cars will also need to get to the cleaning depot once every three days to keep them fresh, so that when they are getting cleaned they can also be getting charged. EVs are a natural to be used in the shared fleets since overall they are 75% cheaper to operate and maintain than a gasoline car. Ridecell ensures that the cars with low charge are automatically taken out of service and have someone charging them soon so that they can be back on the road and earning money for the fleet owner.

 
Q9. How important is parking site to various types of current and future sharing services?
A. In the long term when we have autonomous driving shared mobility, parking will be done at large service depots where the cars will be charged and cleaned. The need for parking in general will decrease as people get rid of their cars and there is less demand for parking spots. Personal garages in homes will begin to be converted to living space. Parking structures will become converted to commerce or torn down for housing. Street parking will become more scarce and instead we will have loading and drop off zones so the shared mobility vehicles won’t be dropping people off in the middle of the street blocking traffic. 

Today, however, access to parking is a critical element of running a carshare enterprise. It’s critical that customers who use the carshare cars have places to park them. Otherwise what good is it driving a car to a destination and finding there is nowhere to park it? Most successful carshare operators have parking garages where a customer can leave the car and not worry about street parking. It’s also important that if a customer goes to a residential area that the car have a permit so that it can be parked in a neighborhood that may have restricted parking just for local residents. It’s important to have both city sanctioned parking as well as contracts with private parking garage operators to offer the most choice for the carsharing operator.



Ridecell's solution to support multiple business cases

 
Q10. 'How do we prepare for self-driving services' may be the most important question for the future, but people are still wondering when autonomous driving services such as autonomous repositioning, autonomous delivering, and autonomous ride hailing will be possible and how they will evolve. What do you think about it?
A. No one knows when autonomous driving will be complete and ready for services. But everyone agrees that if a company were to wait for all the pieces to be done and then enter the market they will be too far behind the competition to become successful. It’s important to become a service provider today in order to gain the expertise for tomorrow’s business opportunity. It’s also well understood that in the future the services will own their own vehicles. This model where drivers drive the cars they own will not be the case anymore. Imagine if a pilot was required to own the plane for the airlines that they fly for?
 
Q11. In Korea, ride hailing services like Uber are illegal. Also, Seoul does not accept roadside parking for car sharing due to congestion. What legal and regulatory issues is Ridecell overcoming for autonomous services?
A. Once cities realize that each carsharing vehicle will take off 10-14 cars from the road, they will begin to appreciate that carsharing will reduce congestion, not increase it. Also the sales of EVs has not been keeping pace with the expectations in a large part because the charging infrastructure isn’t growing to put in charging in the places where people live, work and shop. Owning an EV is still hard for the owners except those who have a dedicated garage for their own private charging station. Cities will realize that by offering street parking to shared EVs that they will find it much easier to get EVs being used than trying to encourage people to buy an electric vehicle. In Madrid they gave away free parking and carsharing permits to any company that wanted to start a carsharing fleet with EVs. They also made the center of the city only open to EVs so that people needed to use an EV to get across town. So they generated a lot of demand for EVs from that ruling. They also are getting a city with much less pollution due to the amount people are using electric cars now.


 

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