THE LEADERS IN URBAN

MOBILITY WILL BE
REGIONAL, NOT GLOBAL
By Nikolaus Lang, Markus Hagenmaier, Camille Egloff, Brian Collie, and Dominik Keupp

D on’t underestimate the power of

mobility platforms. With digital
interfaces in play, urban transport solutions
mobility platforms will be a global phe-
nomenon but will develop differently in
different regions. In the US, entrenched
will be delivered and consumed as a mobility providers such as transport net-
service in the future, accelerating the shift work companies and ride-hailing firms
away from personal-vehicle ownership. will be in the vanguard. In Europe, indi-
They will also bring order to the plethora vidual cities will be the front-runners,
of mobility offerings, each with its own helped by neutral integrators. And in
app, that are available today in many cities. China, Asia’s biggest market for new mo-
And cooperation among different mobility bility solutions, local public-private part-
players will be the key to their success. nerships will emerge.

Private transport companies, such as ride- These players will determine the future
hailing and e-scooter services, will link up shape of the mobility landscape in their
with public mass-transit operators in order region, influence how various travel op-
to establish intermodal platforms that give tions are used, and ensure that there is a
end users choice, simplicity, and a seamless balance of public and private transport
travel experience, regardless of where they modes.
are located around the world. Savvy city
planners will get in on the act, mining the Mobility and technology providers that
travel data of individuals and vehicles col- want to be part of this revolution in urban
lected by platform providers to meet mu- transport will need to adapt their strate-
nicipal goals such as reduced traffic conges- gies in response to regional differences.
tion and lower emissions. They will have to decide what role they
want to play in the local mobility eco-
But even with the best collaborations, system and take proactive steps to achieve
someone needs to take the lead. Urban their ambition.
 Urban Mobility Through a Motivate, the biggest bike-sharing opera-
Regional Lens tor in the US, a year ago and has rolled out
We estimate that the market for urban mo- electric scooters in several cities. Uber
bility platforms will be worth about $25 acquired bike-sharing startup Jump in
billion by 2035, split mainly between the January 2019, using part of its $1 billion
US, Europe, and China. By 2035, end users investment budget. It has also expanded
in each of these regions will, on average, into the freight market. In May, Uber
select and purchase tickets for about 400 announced that customers in Denver
trips a year via an urban mobility platform. would be able to pay for tickets on the
(See Exhibit 1.) Although platforms will be city’s public buses and trains via the Uber
only a small portion of the global mobility- app. And in recent months, CEO Dara
as-a-service industry, they will play a key Khosrowshahi has spoken publicly about
role in urban transport systems, enabling how, by turning itself into a platform
providers to control the customer interface company with multiple mobility offerings,
across multiple travel modes and steer cus- Uber could become the Amazon of trans-
tomers toward different transport options. portation.

Here’s how we expect urban mobility plat- The endgame for such players is to offer
forms to develop in the key markets world- users nationwide a variety of city-based
wide. (See Exhibit 2.) public and private mobility options via
their apps. The options will be optimized
US: An Amazon of Transportation. In the for individual travel preferences, real-time
US, large mobility providers such as Lyft traffic situations, and weather conditions
and Uber are expanding into new trans- and will include last-mile transport, which
port areas outside their traditional busi- takes travelers from their local bus or train
nesses. For example, Lyft purchased station to their doorsteps.

Exhibit 1 | The Global Market for Urban Mobility Platforms Will Reach $25 Billion by 2035

Annual revenues and number of trips booked via urban mobility platforms
Europe

US China
$5.2 $12.4 $3.9
billion billion billion
~11 billion ~35 billion
~35 billion trips
trips
trips
RoW: $3.6 billion | ~48 billion trips
Trips considered for
estimation of urban
mobility platform market

Public Taxi Ride hailing Urban Car rental Car sharing Bike sharing Scooter Urban air
transport ridesharing sharing mobility

Source: BCG analysis.

Note: This market size includes commissions on trips the platform provider gets for each journey booked through the platform but excludes
additional revenues such as paid advertisements.

Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 2
 Exhibit 2 | One Journey Out of Four Will Be Booked on an Urban Mobility Platform by 2035

Estimated market penetration of urban Share of bookings via

mobility platforms (US, Europe, and China) Rationale comparable travel-related
online platforms, 2018
Today's market penetration
of urban mobility platforms
is only ~1% in the US, Hotels:
Europe, and China 37%

Average booking shares of

comparable travel-related
online platforms are ~25% Flights:
today 20%
25%
17% About 10–15 years would be
1% 4% Car
required to attain these
2020 2025 2030 2035 levels of market penetration rentals:
as an aggregator 19%

Bookings with a mobility provider

Bookings using an urban mobility platform

Sources: Phocuswright Online Travel Overview, 2018 (US, Europe, and China); App Annie; BCG analysis.

By providing a comprehensive selection, Given that the new platforms will be an at-
these companies will become the de facto tractive route to market for other mobility
platform providers in cities across the US— operators, we expect platform providers
though not, in our view, worldwide. Estab- will be able to make money by selling their
lishing market dominance will give them own transport services as well as charging
control over the customer interface and en- other players a commission for being on
able them to dictate the pace of future de- the platform.
velopment. Municipal authorities, attracted
by these providers’ compelling propositions, Europe: Cities as Mobility Orchestrators.
robust market positions, and strong brand European municipal authorities have
loyalty from users, are likely to select the watched from the sidelines as their cities
companies as preferred partners to develop have become swamped by new mobility
new platform-based transport offerings in offerings. In Berlin, for example, users can
their cities. In time, these platform compa- select from more than 20 services, includ-
nies may share data—for a fee—that en- ing shared electric bikes, cars, kick scooters,
ables cities to meet their transport-related and electric scooters. But many cities are
goals. now realizing that they need to take the
lead in organizing these services into a
Strong US players will be prepared to can- cohesive and interconnected ecosystem
nibalize part of their core ride-hailing busi- in order to avoid chaos on their streets,
nesses in order to achieve the bigger goal simplify life for end users, and reduce the
of becoming a platform provider. They will large volume of private cars in urban areas.
leverage their customer bases in cities
across the US to rapidly scale up their in- Europe’s heterogeneous nature—with di-
termodal platforms and introduce high ser- verse regulations, data standards, and pri-
vice standards in the process. Other mobili- orities—will make it hard for large mobility
ty companies will join these platforms to providers to make significant inroads into
access a growing pool of customers and the region. Furthermore, these players are
will be drawn by the high standards offered likely to face strong resistance from city au-
by the platforms. thorities worried that the companies will

Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 3
 favor their own mobility offerings on the vertisements about nearby entertainment
platforms at the expense of those offered and recommended restaurants) to end
by competitors. users.

Instead, city authorities will value neutrali- China: Public-Private Partnerships with
ty. They will select software companies that Local Technology Giants. New Chinese
can impartially integrate different mobility mobility solutions have attracted huge
players on a bespoke digital platform, leav- private investments in recent years. But,
ing the authorities to decide how the plat- for several reasons, urban mobility plat-
form will operate, who can join, and how forms in China will develop along a
to balance public and private transport different path than they have in Europe
modes. In 2016, for example, Helsinki and the US.
chose Finnish technology startup MaaS
Global to build an app-based mobility plat- China’s government has prioritized the cre-
form that simplified the commuter experi- ation of smart cities that apply digital solu-
ence. The company has since rolled out tions holistically to deliver better transpor-
its Whim platform to Amsterdam and tation and other urban services. Chinese
Birmingham, England. technology giants are investing in smart-
city technologies, such as sensors and
Successful platform providers will develop camera systems. For example, leading tech-
a white-label software product that caters nology players are participating in the de-
to a city’s specific transport requirements velopment of Xiong’an, an area in China’s
and policies and carries its branding in or- northwest that is a flagship hub for several
der to succeed in the world’s biggest mar- initiatives. As a result of this holistic ap-
ket for urban mobility platforms. Mass- proach, mobility platforms won’t evolve as
transit and new mobility companies will a discrete business area but instead as part
join such a platform because of its local- of a comprehensive smart-city agenda that
ized characteristics and appeal to a distinct will include digital infrastructure.
customer base. But platform providers will
design their products using standardized Another reason for the differing dynamic: a
components that can be customized for handful of large domestic technology play-
different city archetypes so that their plat- ers—led by Baidu, Alibaba, and Tencent—
forms can be more easily duplicated in new dominate the Chinese urban mobility mar-
regions and urban areas. ket. These same companies are also big
investors in China’s online-payment provid-
The platform provider, on its own or in ers, whose apps users access to pay for bike
partnership with a city’s main mass-transit and scooter trips. For example, Alipay, a
company, will operate and maintain the leading Chinese digital-payment service, is
platform on a daily basis. In Berlin, Berliner owned by Ant Financial (an Alibaba affili-
Verkehrsbetriebe (BVG) is partnering with ate), while Alibaba is an investor in ride-
Trafi, a Lithuanian technology startup, to hailing company Didi. Because a small cote-
run the city’s Jelbi platform. Cities that op- rie of private companies controls both mo-
erate their own urban mobility platforms bility offerings and payments, Chinese com-
will be the exception because they typical- panies face less market pressure to develop
ly lack the necessary capabilities. city-based platforms that combine these
two functions across transport modes.
We expect the neutral platform providers
that will dominate the European market to We expect these technology companies will
make the bulk of their revenues by provid- lead the development of new mobility-
ing software solutions to cities on an as-a- related technology solutions, including in-
service basis. They may supplement their termodal platforms, as part of their ambi-
income, however, by charging mobility op- tion to become the preferred partner for
erators a commission and providing value- the Chinese government’s smart-city agen-
added services (such as location-based ad- da. They will form public-private partner-

Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 4
 ships with leading Chinese cities to devel- We believe that five imperatives are the
op, finance, and roll out the new solutions. key to tackling these challenges:
Foreign companies (including software
firms that provide routing or ticketing func- •• Focus on users. Successful platforms
tionalities) will need to form deep supplier will make urban mobility as simple and
relationships with China’s technology gi- convenient as possible by offering a
ants, such as through equity investments, smart and seamless end-to-end travel
in order to be able to access the country’s experience.
mobility market.
•• Remain impartial. Platform providers
Signs suggest that key players are putting that act as unbiased brokers will gain
in place the building blocks for future the support of municipal authorities
platforms: Baidu Maps and rival online- and mobility operators.
mapping service AutoNavi, owned by
e-commerce giant Alibaba, have started to •• Take an open approach to IT. Provid-
beef up their offerings. The companies, ers should keep the barriers to entry
which already allow users to access a vari- low and use common APIs (application
ety of ride-hailing services within their programming interfaces) in order to
apps, are integrating more and more pub- encourage mobility operators and other
lic transport options. stakeholders to join.

The Chinese companies that emerge as •• Customize for local stakeholders. To

platform providers will generate revenues flourish, platform providers need to
by charging retailers that want to advertise tailor their offerings to local require-
on their platforms or by providing fee- ments by using a city’s branding and
based value-added services to end users. adapting to its transport systems and
regulations.
For a discussion of different ways that lead-
ing companies are changing urban mobility •• Facilitate scaling. Providers should
systems around the world, see the sidebar, adopt a standardized, modular approach
“Three Current Approaches to Solving the to IT so that their offerings can easily be
Urban Transport Challenge.” scaled up in new locations, and they
should deploy cloud-based IT solutions
that can be replicated elsewhere.
Five Lessons for Platform
Providers The relative importance of these factors
Although mobility platforms will develop will vary depending on the region, how-
differently in different regions, our experi- ever. (See Exhibit 3.) In the US, where we
ence in the sector suggests that urban mo- expect established mobility players to dom-
bility platform providers will face several inate, maintaining a laser-sharp focus on
common obstacles in their efforts to estab- end users and scaling rapidly across major
lish a dominant market position. These cities will be especially important to build-
will include reconciling the often conflict- ing a strong market position. Because of
ing agendas of participants in the urban European cities’ role as orchestrators of the
mobility ecosystem, integrating mobility urban mobility ecosystem, successful plat-
operators’ varied pricing models and ap- form providers in that region will need to
proaches, consolidating legacy IT systems offer individual cities an impartial platform
and data formats, customizing their plat- solution that is tailored to their needs, pro-
forms for local users while also replicating motes an open IT architecture, and ensures
them in other cities, and finding ways to full integration with existing public and
monetize their business model in an private transport options. And to prosper
emerging global market where platform in China, providers will need to combine
providers are still struggling to achieve every aspect of platform functionality in a
profitability. fully integrated offering, prioritize user

Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 5
 THREE CURRENT APPROACHES TO SOLVING
THE URBAN TRANSPORT CHALLENGE
Leading regional players are adopting ing weekend and 30-day travel passes.
different solutions, and prioritizing The company’s stated aim is to reduce
different goals, as they seek to improve private-car ownership in European cities
urban mobility systems. by encouraging city dwellers to use
alternative forms of transport. Currently,
Uber—a Player with Bold Ambitions users of the platform can choose be-
Uber has defined its own strategy for tween public transport, taxis, car rentals,
urban mobility by developing a closed bikes, scooters, and ridesharing.
platform that controls the options
available to users. Founded in 2009, the Alibaba—a Technology-Driven
company has moved far beyond its initial Smart-City Partner
beginnings as an app-based automobile Alibaba is part of a small group of
ride-hailing service, adding car sharing, Chinese technology companies that are
electric bikes and scooters, mass-transit competing to provide smart-city services
tickets, and freight services. The addi- in China. Hangzhou in eastern China has
tions are in line with its ambition to implemented Alibaba Cloud’s City Brain
become the global leader in mobility project, and Kuala Lumpur and Macau
platforms. Unlike neutral platform have adopted similar Alibaba technolo-
providers, however, Uber selects which gies. City Brain combines sensors with
transportation companies’ mobility big data and artificial intelligence to
offerings are available on its platform in analyze real-time traffic data and reduce
order to limit competition with its own congestion, improve travel times, and
offerings. Uber’s plans are unlikely, accelerate response times from munici-
therefore, to include a shift to a fully pal emergency services. By monitoring
open and neutral intermodal platform. passenger density across the city, it
enables mass-transit operators to match
Whim—a Neutral Integrator for Cities the supply of vehicles with the demand.
Helsinki-based MaaS Global’s Whim is Cities maintain ownership and control of
one of only a handful of platforms that their data, which is stored on Alibaba
aim to integrate the full range of public Cloud’s secure platform. In the medium
and private mobility options within a city. term, the company could leverage its
Users can access these offerings via a established infrastructure, data manage-
single app. This combines both booking ment capabilities, and experience in city
and payment, allowing users to select planning to become an aggregator of
and purchase tickets for different types urban mobility services and help
of transport through a digital interface. manage city transport infrastructure.
Whim also features a variety of pay-as-
you-go and flat-rate fare options, includ-

requirements, and build platforms that can and regional dynamics depending on their
easily be scaled up as necessary. current position and where they want to
play in the future.

What It Will Take to Succeed in Cities. In Europe, cities aiming to be

the Mobility Ecosystem mobility orchestrators will need to actively
To be sure, these are only rough guidelines. shape the mobility landscape. They will
Nevertheless, all players in the mobility have to build expertise and skills in areas
ecosystem—not just platform providers— where these are often lacking. For exam-
will need to adapt their strategies to local ple, cities will need to learn how to effec-

Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 6
 Exhibit 3 | Three Regions and Three Different Strategies to Win in Urban Mobility Platforms

Success criteria US Europe China

Focus on users

Remain impartial

Use an open
approach to IT

Customize for
local stakeholders

Facilitate scaling

Apply an uncompromising Approach cities with a Cooperate with local tech

end-user focus and scale neutral, tailored approach champions and offer them
quickly to achieve a dominant and facilitate an open IT a strong value proposition
market position ecosystem
Source: BCG analysis.

tively direct and regulate an array of new platform, relinquishing exclusive customer
mobility providers, foster innovation, and access. Scaling rapidly across multiple
resolve conflicts between players with cities and establishing a firm market posi-
differing agendas. They will also have to tion will strengthen their ability to collabo-
select private companies to partner with rate effectively with successful platform
so that they can achieve their goals. In providers in their region.
China, cities are already in a strong posi-
tion to orchestrate the mobility ecosystem Software Companies. Software developers
in partnership with domestic technology of white-label platforms can also take
companies. proactive steps. They need to prioritize the
countries where they can best succeed
Mass-Transit Operators. Although city (particularly in Europe), identify cities that
transport planners will decide platform are potential customers, and work with
priorities and balance private and public them to create partnership and monetiza-
transport options, traditional mass-transit tion models that will benefit the city and
operators will continue to be the backbone themselves. Developing a more modular
of transport networks in most cities around offering and quickly replicating it across
the world. They should start a dialogue cities and countries will allow them to
early with the key stakeholders in their build scale and momentum.
region—whether these are US mobility
players, European software providers, or Car Makers. Automobile manufacturers
Chinese technology giants—to ensure that will need to prepare for the day when cities
future solutions maximize the benefits for are a no-go zone for private cars owing to a
users and that the necessary public fund- combination of congestion fees and regula-
ing and capabilities are in place. tions. They will have to decide what role
to play in the mobility ecosystem of the
Mobility Startups. New mobility opera- future. Leading car makers have the
tors should be prepared to adapt their advantage of global footprints and large
business models so that they can achieve customer bases and could adopt a different
profitability even when they integrate strategy for each region so that they are an
their offerings into a city- or regionwide attractive partner for platform providers.

Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 7
 For example, one option would be to oper- clear about the role they can play in an ur-
ate and maintain large fleets of shared, ban mobility ecosystem built around a digi-
autonomous vehicles in some cities. tal platform. They must also be proactive
and take the necessary steps to achieve
their ambition. But without a global solu-

M obility platforms are the future of

city transport. We expect platforms
that aggregate public and private transport
tion, players will have to be sensitive to
fluid regional factors and dynamics. They
must think locally, take a flexible approach,
offerings will become an integral part of and be open to partnerships if they are to
urban transport systems over the next de- come out on top.
cade. Different participants will need to be

About the Authors

Nikolaus Lang is a managing director and senior partner in the Munich office of Boston Consulting Group.
He manages BCG’s collaboration with the World Economic Forum and is a member of the forum’s Global
Autonomous and Urban Mobility Council. You may contact him by email at [email protected].

Markus Hagenmaier is an associate director in the firm’s Vienna office. He is an expert on the future of
mobility and leads the operations of the Center for Mobility Innovation. You may contact him by email at
[email protected].

Camille Egloff is a managing director and senior partner in BCG’s Athens office. She leads the transpor-
tation and logistics sector globally at BCG and is on the global leadership team of the Center for Mobility
Innovation. You may contact her by email at [email protected].

Brian Collie is a managing director and senior partner in the firm’s Chicago office. He leads BCG’s global
automotive and mobility sector and is on the global leadership team for the firm’s Center for Mobility In-
novation. You may contact him by email at [email protected].

Dominik Keupp is a partner in BCG’s Zurich office. He is a coleader of the firm’s Center for Mobility In-
novation. You may contact him by email at [email protected].

BCG’s Center for Mobility Innovation works with clients around the world to navigate this space of rapid
change and new challenges such as congestion and pollution. We help our partners identify areas for ac-
tion and launch new mobility concepts. And we secure lasting results for the public and private sectors.
The experts working in BCG’s Center for Mobility Innovation offer a full range of support: we help clients
develop their mobility vision and strategy and innovate by leveraging evolving mobility technologies. Work-
ing in partnership with our clients, we bring to market state-of-the-art solutions and connect with the right
stakeholders along each step of the value chain. We address the specific needs of each client in today’s
changing environment.

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Boston Consulting Group | The Leaders in Urban Mobility Will Be Regional, Not Global 8