Increasing Revenues by 25 Percent — How StreetCrowd Supported ReachNow
ReachNow, a carshare operator, came to Ubiq in 2018 seeking to improve the effectiveness of their operations in Portland and Seattle, US. With vehicle supply not matching demand, they were missing out on rides. They didn’t, however, want to expand their existing fleet of 1,200 vehicles. Instead we provided them with demand prediction and vehicle rebalancing services allowing them to position their fleet more effectively, increasing revenues by 25 percent. Here we explain how.
“StreetCrowd enabled us to better meet customer demand, tap into unrealised potential and reach operational excellence with our carsharing operations.”
Mike Rimoin, (Former) Mobility Manager ReachNow
Unfulfilled demand with vehicles not in the locations they need to be.
Reduced customer satisfaction due to lower perceived availability.
Expanding fleet size not an option — aim to get more out of existing fleet.
Supplying demand — vehicles in the wrong place
With all new partners we aim to get to the bottom of exactly where opportunities for growth lie. It is obvious that carsharing operators want to increase the amount of time their vehicles are being driven, but the question of how is more complex. ReachNow knew that their vehicles were not where they needed them to be, but they didn’t have the demand intelligence, nor the manpower on the ground to move them. Therefore, they were missing out on trips and, in turn: revenues.
Cars are not cheap to manufacture and a carshare vehicle that is hardly ever used is a major drag on profitability. This is particularly problematic for operators who are looking to expand. For ReachNow, simply adding more vehicles was not an option. They therefore needed to get more out of their existing fleets.
Demand prediction models — a more accurate understanding of demand
Crowdsourced vehicle repositioning via the StreetCrowd app
To begin with, we had to gain a better understanding of the demand for their vehicles. Importantly, this is a prediction of potential demand for a vehicle rather than simply where the shared vehicles have been popular in the past. For instance, there may be a whole load of potential customers who simply haven’t used the service before because there has never been a vehicle available. This doesn’t mean demand isn’t there, just that it was never an option.
To achieve the most accurate predictions, we combined a number of different data sources. These included our cross-operator insights from worldwide shared mobility operations from the last couple of years, point of interest information, as well as proxy data on things such as concerts and other demand distorting events. In providing a dynamic prediction model, we enabled ReachNow to fully understand their demand, providing them with the fundamental knowledge needed to get the most out of their fleet. And with the application of our AI powered micro-rebalancing engine, vehicles eligible for relocation could be automatically identified aiding repositioning operations.
Crowdsourcing of Vehicle Repositioning
While operators often have dedicated service teams to reposition and maintain fleets, the full potential is only realised when integrated with the crowd.
ReachNow chose, therefore, to complement their efforts with our StreetCrowd service. This included our StreetCrowd app, which crowdsources the repositioning to users in return for monetary reward, alongside our demand prediction modelling. The app guides the crowd users to vehicles eligible for repositioning and all crowd handling and payments are then handled by us. Although not new to these cities, they had previously found managing their operations tricky with the hiring and managing of staff particularly difficult.
This provided them with flexibility and required far less effort on their side. The flexible nature of the work decreased the overhead costs of the operator as they were only paying for the work that was actually being done.
Complementary Use-Cases for StreetCrowd
Micro-Rebalancing: Small Changes, Big Results
The deployment of StreetCrowd for ReachNow can be divided into four separate demand scenarios: micro-rebalancing, special demand locations, special events and the airport; all representing different repositioning challenges and demand fluctuations.
At the centre is micro-rebalancing, which can be complemented by other repositioning activities. Micro-Rebalancing is small adjustments in positioning (e.g. a few blocks south) allowing ReachNow to move vehicles that had spent a long time sitting idly, into high demand locations which previously had been under-supplied. In this case, even the smallest adjustments made a huge difference to the revenue potential of their service. This, no doubt, also satisfied customers who could rely on a more accessible service.
Whereas micro-rebalancing is a collection of marginal gains, service moves require a different repositioning task. These include special demand locations like garages and also for strategic positions such as marginalized areas. ReachNow sought to provide additional vehicles in areas where car ownership rates are low in order to provide better mobility for those previously neglected. In this case, ReachNow was able to align its commercial interests with the wider interests of improving urban mobility for everybody.
The fourth demand case important to ReachNow was the airport in Seattle. They wanted to position their fleets here to attract tourists and for branding purposes. In this case, as in the other two service move types, the distances for repositioning are greater. This puts different demands on the crowd and the greater distance and time commitment requires a different incentive structure. The greater movement distance also provides the opportunity to combine it with other tasks such as cleaning, charging and fueling.
25% revenue increase
$35,000 in saved parking fees
Combined with other services to improve the bottom line
While the StreetCrowd service was fundamentally deployed by ReachNow to increase revenues and customer satisfaction, they were also better able to control their business costs with our parking services. This included our API based ticket buster service which warned drivers if restrictions for parking apply, helping the company to reduce fines and tow away fees. This same information was also used for parking fee reporting, saving the company $35,000 in overpaid fees. By giving them a more accurate breakdown of where their vehicles were parked at a given time, the company was able to claw back the additional money they were previously spending on parking fees.
This latter service was more of an add-on but highlights how the smart deployment of mobility software has the potential to save costs that the operator is unaware of. In partnership with Parkbob, ReachNow was able to generate a sizable amount of additional revenue. By giving them a clearer idea about the demand for their service, as well as more control over the supply of their vehicles, we were able to increase the effectiveness of their operations. In doing so, they were able to get much more for less.
To get a better idea of the vehicle demand and supply of your service and the for more information on best practices for vehicle moves — get in touch with us at email@example.com
Maximilian Mayer is Head of Business Development at Parkbob. You can connect with him on LinkedIn.