Managing the new world of transport

The take-away

  • Car ownership could decline by as much as 70% by 2035.
  • Dutch start-up Amber has a fleet of autonomous cars that use algorithms to predict where they will be needed in the next 15 minutes.

More than 130 years after its invention, the automobile is yet to be surpassed for door-to-door convenience. Little wonder that last year Europeans bought 15.6 million new cars, up 3.3% on 2016. Yet while cars won’t disappear from the transport landscape any time soon, the way we use them is changing fundamentally. Waymo, a unit of Google parent Alphabet, is launching a self-driving car service later this year in Phoenix, Arizona, ushering in a significant new era. Meanwhile, private car ownership is making way for on-demand ride-hailing; driver-control for autonomy; fossil fuel for electric.

Managing large fleets of on-demand vehicles across entire cities seems ambitious, but that’s what Swiss start-up Bestmile is offering. Founded by Raphaël Gindrat in 2014, Bestmile has pioneered a platform that allows autonomous and human-driven vehicles of any type to work together in fleets. The platform already supports 12 fleets of autonomous shuttles around the world. The company is engaged with a range of customers, as it can be used to manage fleets of human-driven ride-hailing and micro-transit services as well as autonomous robotaxi services. Typically, their customers seek to embed the convenience and usability of Uber-like user interfaces into their own fleet-management systems, without the costs and risks associated with in-house development.

According Allan Larsen, a transit expert at the Technical University of Denmark (DTU) comparing the concept of Mobility-as-a-Service (MaaS) platforms with Software-as-a-Service platforms like Netflix is fundamentally flawed: “The value of those popular entertainment apps comes mainly from the convenience of their digital interfaces,” he says. “Mobility apps need to control a physical asset in a real-world environment, which is a far more complicated prospect.”

Mix-and-match fleet management

With Uber and Lyft continuously optimising their on-demand ride-hailing solutions, one might think Bestmile is coming late to the party, but that is not the case. The platform is a cloud-based software solution that has everything that mobility-service providers need to design, manage, and optimise autonomous and human-driven fleets. This includes white-label mobile apps for travellers and drivers, but also an operator back-end where services are planned and monitored in real time. With big fleets of driver-operated taxis, all the routing is now the same. In future, transport providers may need to manage mixed fleets with different levels of autonomy and functionality. “Some new autonomous models may be able to handle roundabouts, while others can’t; some may be able to drive on highways, some may not be designed to drive fast enough,” Gindrat points out. “In these scenarios, generic routing is no longer possible.”

Bestmile’s advantage lies in providing a full turnkey solution that is vehicle agnostic. “An abundance of cool optimisation challenges are involved in developing this type of service,” says Larsen. “Bestmile is a very interesting company from my perspective; their ‘core engine’ is built around the same operations management challenges our research team at DTU works on.”

Matching and routing are two of the biggest challenges with pooled multimodal transport services. “A key part of our work is mathematical optimisation routing, despatching, matching supply of vehicles and demand of trips. In order to do that we need our own team of mathematicians and algorithm engineers,” says Gindrat.

Engineering innovations are just one part of a MaaS company’s success, though. Scalability is also crucial. “Our chief technology officer, Zhao Lu, comes from EasyTaxi, the Uber of Latin America,” Gindrat notes. “Adding someone like him to the team means we have a great understanding of how to build a large-scale platform capable of managing a lot of vehicles.” To date, the company has deployed systems in France, Switzerland and the US, generating revenues in the millions of dollars. Looking at the broader picture, the MaaS market was worth €75 billion in 2017 and is expected to grow to more than €518 billion by 2025.

Raphaël Gindrat, CEO of Bestmile

“Local public transport operators realise they can also compete with Uber.”

On-demand is in demand

Bestmile is not the only start-up that sees opportunities to thrive in a sector dominated by industry behemoths and tech giants. Amber began as an on-demand electric mobility project at the Eindhoven University of Technology. Using predictive analysis algorithms, their software platform calculates where cars will be needed in the next 15 minutes. During the service’s initial rollout, cars will be delivered by student drivers. Ultimately, the driving will be done autonomously.

Amber has partnered with five different software companies and research institutes, including Nvidia and Microsoft, which have already developed self-driving software. Their solution may not be state-of-the-art compared to Uber, Tesla or Waymo but for current purposes it doesn’t have to be. The cars run autonomously only at night, with the aid of data collected during driver-controlled daytime journeys.

For now, Amber is collaborating with automotive companies (the BMW i3 is its current car of choice) rather than competing with them – an approach that holds down costs and risks.

While disruptors like Uber and Airbnb are often in conflict with local governments, the cities of Eindhoven and Helmond have already voiced their support for Amber’s mission, offering city streets for testing self-driving cars and local networks for finding investors.

A fast-approaching future

Cultural and regulatory differences could be instrumental in creating space for start-ups to succeed. Gindrat is optimistic about Bestmile’s future. “A few years ago, people thought Uber would take over the entire market,” he notes. “Now we know that’s not true – there’s more competition than ever. Local public transport operators realise they can also compete with Uber, they can provide similar services and don’t have to provide fixed-route services. On-demand transportation can be a reality for them as long as they invest in the right technology.” According to Swiss bank UBS, car ownership will decline by about 70% by 2035. For that to happen, systems will need to work seamlessly. The first companies to manage that could well leave the competition in their rear-view mirrors.