Mobility Encounters Reality
by lawrence m. fisher
larry fisher, a former New York Times reporter, writes about business, technology and design.
Published January 9, 2024
The first ever Japan Mobility Show launched in November as a successor to the venerable Tokyo Motor Show (1954 to 2019), suggesting that its automotive company sponsors are now selling something other than cars. Indeed, back when Uber became the most valuable start up in the world, the idea was that automakers would morph into service providers, offering car-sharing and ride-hailing, cars by subscription, bike-sharing, scooter-sharing, autonomous taxis and seamless multi-modal trip-planning. Millennials didn’t want to own cars, pronounced industry seers, they wanted mobility via cellphones and apps.
But what once seemed like a dandy high concept, slicing and dicing ways to sell transportation to fit every consumer’s whim, has lost some luster lately. Just days before the show opened, Bloomberg NEF (Bloomberg’s energy research arm) released a report showing that the auto industry’s mobility activities had peaked in 2019.
“Some of the earliest and loudest backers of mobility services have shuttered or significantly reduced divisions managing these activities,” concurred Bloomberg. “Ford, General Motors, BMW and Mercedes have all exited car-sharing. Stellantis is a rare example of an automaker that still directly owns a car-sharing venture.”
“The real-world wakeup call has been tough for these people who stood around in boardrooms visualizing the perfect solution for all of us,” noted Karl Brauer, an analyst with iSee Cars, an online used-vehicle market. “Why do people pay happily for certain subscription models and not others? They feel like they’re getting good value.”
“One way is to offer an incredibly good service, the other is to offer whatever at an incredibly good price,” he continued. “The problem with the auto subscription is they’re not offering a good service and the price is high.”
When the Bloom Was Still on the Rose
Back in September 2018, Motor Trend asked, “Are Subscriptions the New Leasing?” The article highlighted the luxury brands experimenting with a new form of car ownership, which looked like a Netflix subscription or a gym membership — except that they were selling commitment-free use of a new car rather than movies to binge or unlimited Pilates classes.
With names like Care by Volvo, Book by Cadillac and Access by BMW, the offerings bundled concierge services, insurance, maintenance, roadside service and the ability to “flip” between different models. You could drive a Porsche Boxster daily, and jump to a Cayenne SUV when you needed space for a road trip — all from a smartphone app. Subscription customers tended to be younger and more affluent, seemingly a marketer’s dream come true.
Yet the programs never really took off. Cadillac pulled the plug in November 2019; similar services from Volvo, Audi, BMW and Porsche followed. Some of these programs have since rebooted, but often with a limited choice of models (Volvo) or in a limited number of cities (Porsche). Other plans have nixed flipping or now charge a hefty premium for it. And unlike leases, the subscription rates are never discounted. So where’s the aforementioned value proposition?
“I don’t think a lot of people understand it,” offered Michelle Krebs, an analyst with Cox Automotive, noting that her employer had a subscription business that it ended up folding. “Whenever new things come into the market, they’re just not going to take off in the quick way that often is portrayed in the media or by auto executives,” she concluded. “Somehow we have to figure out how to make transportation more affordable.”
“One way is to offer an incredibly good service, the other is to offer whatever at an incredibly good price,” said Karl Brauer, an analyst with iSee Cars. “The problem with the auto subscription is they’re not offering a good service and the price is high.”
Where’s My Robo Taxi?
Auto subscriptions always looked like rebranded leasing to me, but I confess that five years ago I thought autonomous (self-driving) vehicles would be broadly available by now. And I thought they’d probably be safer than automobiles driven by easily distracted human beings.
Maybe yes, maybe no. Tesla’s Elon Musk once proclaimed on Twitter that the company’s cars had had “no injuries or deaths ever,” and that “Tesla is safest car on road. Approx 4X better than avg.” But while direct safety comparisons with conventional road cars are elusive, Teslas have actually been involved in 481 crashes involving fatalities as of this November 2023, with 42 of those deaths associated with the autopilot feature. In early December, federal regulators ordered Tesla to recall two million vehicles for software modification.
Autonomous car boosters could point to the robotic taxis circulating on the streets of San Francisco, which was the first city with two companies offering the service. Cars from Cruise, a unit of General Motors, and Waymo, owned by Google’s parent, Alphabet, were a frequent sight in some neighborhoods. Pedestrians applauded their tendency to make a full stop at every stop sign, but many noted their inclination to freeze up mid-block.
Then, in last August 2023, a Cruise Chevy Bolt hit a fire engine, prompting the California DMV to ask that the company cut its fleet in half. And in October, the DMV suspended Cruise’s permit to operate driverless cars in the state, declaring the company’s vehicles “not safe for public operation” after a Cruise AV in San Francisco ran over a pedestrian who had been hit by another car and dragged her for 20 feet. GM has said it is slashing spending on Cruise and has suspended roll outs in other cities while it works to rebuild trust. That could take a while.
Meanwhile, anyone with the Waymo app can still hop in one of the operator’s sleek Jaguar iPace taxis in San Francisco, where the company continues to expand its fleet. But it can still be a bumpy ride. Writing in New York magazine, Theodore Gioia recounts long wait times and inconvenient pickup locations. “Only a third of my AV outings were disrupted by an unexplained pause,” he added, “yet the possibility of a freezing incident was a constant psychological undercurrent.”
In Phoenix, residents of some parts of the city have the choice of two mobility services when they book an Uber: riders “may be matched with a Waymo vehicle if the route is part of Waymo’s newly expanded operating territory and a dedicated Waymo vehicle is available.” That sounds like a lot of maybes and ifs. But you might get lucky, or not.
Uber says the Waymo vehicles are part of its effort to become a zero-emissions mobility platform by 2040. But this congenitally skeptical writer suspects the company’s embrace of AVs owes more to its ongoing labor issues than to green virtue. Persuaded by funding from Uber and its rival Lyft, California voters passed a measure that ensured that ride-share drivers couldn’t be classified as employees, and thus must pay their own expenses and do not receive health insurance or the minimum wage. But the measure is being challenged, and AVs will look a whole lot better to Uber if it is ruled unconstitutional.
Let’s Get Small
Click on the “Mobility” box on the American Honda Motor Company site and you will learn the category encompasses Formula One cars, private jets and speedboats — and coming soon, an all-electric autonomous work vehicle. But my favorite Honda mobility product, and the darling of the Tokyo show, is the Motocompacto, a 43-pound electric scooter that folds into a carrying case vaguely reminiscent of an old-fashioned hard-sided briefcase.
“There are plenty of folding electric scooters on sale, plenty of last-mile solutions,” explained Road and Track. “But this one isn’t made by a scooter company, or even a motorcycle company, though Honda owns one. This is made by AHM, the same business unit that makes the Civic. … It is already the world’s largest mobility company. Now it wants to make the whole operation carbon-neutral.”
If you say so. I like the Motocompacto because it’s cool and a bit silly, and I don’t even have a commute. But I think it also speaks to diminished expectations: what commuters apparently really need is an easier way to get to the train.