Utilizing the Crowd to Improve Fleet Efficiency
While the majority of people are sleeping at night, a small army of short term contractors comes out to move fleets of free-floating carsharing and micro-mobility vehicles. In the early hours of the morning they move cars and scooters into different districts of the city in anticipation of the next day’s demands.
This is just one of the ways in which carsharing operators address the problem of under-utilization and in doing so maximize the revenue potential of their service. But, what if operators didn’t have to rely on hired contractors to do so, what if they could also encourage users to do it themselves?
We continue our series of blog articles to explore StreetCrowd and how the “crowd” is being used to make mobility smarter.
Offering a good service with competitive rates is of course important when it comes to winning and retaining customers. However, that is only part of it. Unlike ride sharing services — like Uber and Lyft — carsharing enterprises such as BMW’s DriveNow must provide and maintain their fleets which is far more capital intensive. Therefore, to run a profitable service, operators must seek to maximize the utilization of their fleets — that being the percentage of time that the vehicles are in use. In fact, a typical utilization of 10 to 15 percent means that operators are often missing out on potential revenue.
There are many reasons that utilization can be low and it is of course unrealistic to imagine that fleets would be in use anywhere close to 100 percent of the time. One just needs to observe the usage patterns to see why this isn’t possible. During the week, usage is often defined by single trips in the morning and the evening, with people going to and coming back from work. In the night usage is generally low and on weekends, rentals tend to be longer round trips. Therefore, carsharing operators have to find ways to get as many people in their vehicles at the right time and in the right place. This, of course isn’t easy when demand is neither regular nor conveniently distributed.
“Cold zones” into “hot zones”
To address when and where a customer will need a vehicle, operators rely on demand prediction. Without knowing when and where users will need one, operators cannot guarantee that their vehicles will be in the right place to provide their service. And, in a competitive mobility market, users aren’t going to wait around for a car to suddenly turn up. Therefore, operators use software that develops algorithms to establish usage patterns, enabling their fleets to be well positioned as not to miss out on demand surges.
Once demand has been established it is then possible to get to work on repositioning vehicles. Those parked in “cold zones” where they will not be booked for a longer time, need to be moved into areas of high demand, “hot zones”. In some cases, this is for specific events like a big football game or concert, in others it is simply providing fleets ready for the morning commute to work.
The question is, how do you get cars from cold zones to hot zones? The most obvious way is to hire contractors to reposition vehicles based on predicted demand and this is often done on a nightly basis. Alongside this dynamic pick-up pricing or well-timed advertising can have the effect of distorting demand to best match an operator’s fleet positioning.
Another innovative option developed by Ubiq is incentivizing users themselves to do the repositioning. Ubiq's StreetCrowd service encourages users to pick up vehicles and move them from A-to-B. With its experience building parking prediction models, Parkbob is able to make accurate demand prediction, allowing vehicles to be picked up and dropped off into real-time “hot zones”. By using incentivisation and bonification schemes — with a gamification element added to the mix — the service allows citizens to turn time into money. Operators in turn can increase the utility of their fleets, without adding cars to the road. In doing so, operators can develop greater engagement amongst users who can benefit from the service-ecosystem in different ways.
While we have already proved this approach to be successful with carsharing operators (for more details: https://www.ubiq.ai/streetcrowd), similar rebalancing can be effective in the micromobility market too. Interestingly, users moving the cars are often using micromobility scooters and bikes anyway to get from one car to another. This highlights the effectiveness of micro rebalancing which are short trips to neighbouring blocks with high demand. This just goes to show, how an integrated mobility ecosystem can better serve the demands of citizens. The boundaries that once divided users, contractors and operators are now blurred and StreetCrowd is at the heart of this.