The importance of strategic vehicle positioning to better serve demand
To most of the world, the far-left German militant organization of the 1970s, the Baader–Meinhof Group, remains relatively obscure. Their connection to shared mobility even more so. Yet their legacy lives on not through their acts of violence but to their association with the cognitive bias that its name is associated with - the Baader-Meinhof Phenomenon or ‘frequency illusion’ (the illusion of seeing something for the first time and suddenly seeing it everywhere).
The Baader-Meinhof phenomenon was termed as such after Terry Mullen, a reader of St. Paul Pioneer Press wrote to the bulletin board to describe how, following learning of the Baader-Meinhof Gang for the first time, he would suddenly encounter the term with increasing frequency despite their activity taking place decades ago.
We all know that feeling of seeing something for the first time and subsequently seeing it everywhere. This is especially true for shared mobility. When scooters started to pop up in cities across the world, bright colored vehicles appeared to spring up like mushrooms in fall. Brands that were previously unknown would appear on every corner.
To encourage people to take new forms of transport, they need to be seen. By placing vehicles not just where demand is, but where demand will likely be (in the future), operators can help to drive up adoption. By strategically placing vehicles in high visibility locations and by supplying areas previously underserved, operators can appear to be everywhere, stimulating new demand, despite limitations to fleet sizes.
The Baader-Meinhof Phenomenon
First is selective attention, meaning your brain is seeking out more information on the subject.
Second is confirmation bias, meaning every time you see something related to the subject, your brain sees that as proof the subject has gained in popularity.
When applied to shared mobility it is clear then how important strategic placement of vehicles is to nurture potential customers by first making them aware of vehicles in their area, and second, by confirming their constant availability.
Demand vs vehicle utilization
At the heart of this are two ideas: demand and vehicle utilization. And while they are related in the sense that supplying demand leads to vehicles being utilized, they are not the same. Demand is all the rides that could potentially take place regardless of vehicle distribution. In an unrealistically ideal world, vehicles positioned within every 50 square metres of a city would be able to serve almost any demand. However, vehicle utilization reflects the rate each vehicle is actually used. When vehicles are not located where the demand is, that demand will not be served.
For this reason understanding historical fleet data is important to see areas where demand is high; key to improving the shared mobility experience and long-term profitability. Yet it is worth acknowledging that demand is not fixed. It can expand and decline. Areas where demand may be low now, may be growth districts of the future. What is more, higher visibility can help to spur demand in itself.
It is therefore important that operators focus on fleet visibility. Call it a frequency reality rather than frequency illusion. No one will take a vehicle they cannot see. In this sense, the best marketing asset a shared mobility operator has is the vehicles themselves.
Knowledge is power
Understanding where demand is and isn’t is therefore important. It allows operators to position vehicles in areas where ride adoption is high. But it should also serve to inform operators on fleet deployments in strategic positions such as high visibility locations, like airports, and underserved areas. One district’s low trip numbers may be a self-fulfilling prophecy as there are no vehicles for users to pick up. Vehicles may find themselves concentrated in busy districts at the end of a day, yet there may be underserved demand in more suburban and deprived areas come the following day.
Fleet repositioning therefore is not simply a question of emulating past success, but of also strategically placing vehicles where they can stimulate demand. Improving visibility to first plant the seed in a potential users mind and then nudging them by confirming their constant availability. Operators that can effectively manage this over a wider geographical area, without having to drastically increase their fleet size, will be capable of turning frequency illusion into profitable reality.
Ubiq provides both analytics services and end-to-end fleet operations for rebalancing, enabling operators to better match supply and demand. Whether an operator is new to a city or just starting out, Ubiq’s data-driven approach to shared mobility operations are proven to be effective in increasing average trips per day by providing a seamless fleet rebalancing ecosystem.
Ubiq enables to operators to effectively position fleets to serve strategic goals. For more information contact: email@example.com