Drive a BMW – Why Not?

RideCell has developed a platform to aid in an array of transportation services, including: ride sharing, car sharing, on demand (counter-less) rentals and traffic system management. It has probably received the most notice because of its relationship with BMW, which is also an investor in the company.

RideCell’s platform is employed to manage BMW’s car sharing – or on demand rental – service in the U.S. which is called ReachNow, currently available in Seattle, Portland and Brooklyn.

A user downloads the ReachNow app and can then reserve a car or simply walk up to a car in a convenient location (cars are parked around the city) and gain access. The cars include the electric BMW i3, the crossover SUV BMW X1 or one of its MINI brands, MINI Cooper and MINI Clubman.

ReachNow advertises an introductory price of $0.41 per minute (normal price $0.49 per minute) for driving and $0.30 for parking. There are also flat hourly, multiple hourly and daily prices.

BMW has had considerable experience with the service in Europe, where it is called DriveNow and has several hundred thousand users. Interestingly, BMW has partnered with Sixt SE, a major international car rental firm based in Germany.

Ride Sharing, Car Sharing, On Demand Rental, Traffic System Management

The cross currents in the automotive industry involve both:

1. Technology – whereby cars and other vehicles are getting loaded up with information and communications tech, leading up to the eventual advent of autonomous vehicles;

2. Business Models – whereby there is an unprecedented amount of experimentation with different ways that cars may be utilized to create new revenue opportunities.

Where RideCell fits into the emerging new automotive value chain is explained by CEO Trivedi. He states that there is an assumption that some day there will be autonomous cars, “and everyone will just switch.” But he says “the hard part” is how the vehicles and vehicle fleets will be managed.

RideCell has developed a sophisticated platform for managing an array of services and combinations of services, including all of the above titled ones: Ride Sharing, Car Sharing, On Demand Rental, Traffic System Management. The company emphasizes that it has been at this task since 2009.

Multiple Services: Vehicle Utilization – The Key

Trivedi emphasizes that the key benefit of the new automotive technologies will be a vastly higher utilization rate of vehicles. He describes RideCell’s major strength and differentiator as the unified nature and breadth of its software platform, which operates in the cloud and incorporates a considerable amount of artificial intelligence (AI).

The platform can equally manage the range of emerging new transportation applications. Definitions may be somewhat confusing. Car sharing has been defined as a model whereby different persons may drive a car, usually each for short periods of time – it seems the key characteristic of car sharing is that there is a multiplicity of potential drivers.

Ride sharing has been used to describe situations ranging from services such as Uber and Lyft, – where there is one driver who may own the car but shares its use with others, carrying passengers for fees (like a taxi) – to other situations which are like “car pooling” – several people riding in one vehicle (whether or not there is a fee involved).

Another example of ride sharing would be Chariot, which offers commuter ride share, utilizing 12-seat van-like “chariots” with employee drivers. Closely related to car sharing is “on-demand rentals” which would include the BMW ReachNow service as well as companies like Silver Car that offers a simplified mobile-based car rental system, which started at airports.

RideCell’s expertise also extends to traffic management and optimization for cities or other units, such as campuses. The company claims over 20 active customers, including: Santa Clara Valley Transportation Authority, University of California at Berkeley, and University of Southern California plus corporate clients like 3M.

Power of The Platform

RideCell’s message is that the maximum utilization of vehicles can be obtained by providing multiple services from a common fleet. Thomas states, “The utilization rate drives profitability.”

RideCell describes their platform as a “unified mobility operating system.” It can gather data from numerous sources, including “mobility apps, infrastructure operators, transit operators, and sensors.” Trivedi states that it can help balance supply and demand for transportation, within a single customer’s fleet, or for an entire municipality.

He also describes its “robust fleet management” capability, pointing out that vehicle tracking is only a small part of the challenge. The company can customize the end user experience, depending on the desires of its client. The platform includes features such as assuring that the vehicle is available at the location specified, that it is fueled, that its navigation system is working, and others.

He states that they are working on further features, such as controlling lighting and temperature settings, checking tires and providing predictive maintenance features, which would signal taking the car for service during a period of anticipated low utilization.

The company states that it is in pilots with some OEMs. While it will not identify any of these companies, Thomas told us that the OEMs are experimenting with: Authentication (how to confirm the identity of the person entering the car); Algorithms for pooling and for route optimization.

Thomas states that their current business model is based primarily on revenue sharing of revenues collected by their various clients on services offered to customers.

The Progression to Autonomous Cars

Its involvement in all of these areas makes it very well-positioned to understand how the transition to autonomous vehicles may occur. Trivedi envisions a future in which a vehicle may be used for one purpose in the morning – a single user or group commute – but be available for an on-demand rental for someone who is going to the theater in the evening.

Thomas noted that while there is a sort of “consensus” that Uber type ride-sharing will lead into the era of self-driving cars, he describes this as a “fallacy,” stating that the experience with car sharing is more relevant to the progress towards vehicle autonomy.

He explains that car sharing and autonomous vehicles both deal with an issue of maintaining a fleet of vehicles, whereas ride sharing is largely involved with managing vehicles and drivers. He asserts, “Car sharing is the best way to prepare for autonomy.”

Thomas believes that the future will not involve as high a degree of individual car ownership and that it will largely rest on subscriptions to “Transport as a Service.” He muses that dealers may find themselves in the unfortunate position of Blockbuster store owners as Netflix and streaming have taken over.

RideCell believes they are helping to provide a pathway to the autonomous future. Trivedi points out that their cloud based platform permits OEMs to trial various services in a limited manner, without incurring heavy upfront expenses. Successful services can then be scaled up.

They foresee a number of changes in the fundamental philosophy of OEMs, many of whom they expect will embrace services as a key revenue growth source. Trivedi says that some OEMs already contemplate that services may constitute 30% of revenues within a few years.

Changes that RideCell expects include:

a. Some OEMs embracing a wide swathe of services, perhaps even across the spectrum of luxury and economy vehicles;

b. In some cases they expect alliances between luxury and economy brands to cover the market broadly;

c. Dealers may even be included in some services – e.g., suitable used vehicles on their lots could be used for car or ride sharing services.

Our Take

The above listed use cases illustrate the need for business process experimentation by the automotive sector as to what model fits your industry niche best. The RideCell platform radically reduces the cost of implementation and appears to be ready now for such testing by an industry trying to find its way in a new tomorrow.

For some time, we’ve identified the issue of automobile utilization as the key driving factor for the industry in the future. (See: “Apple Titan: Are Cars The Ultimate Mobile Cloud Devices?” MCE 10/11/15.) So we roundly agree with the emphasis RideCell places on this point in crafting its platform and services.

The applicability of the concept of “Transformation” clearly needs to be tested in the MaaS (mobility as a service) of RideCell. The automotive and surface transportation sectors are major industry groups with vast national economic impact. High benefit to cost ratio applications such as those which change asset utilization models from single digit, ie. the car being used less than 5% of its life, which is today, to double digit levels, are transformative.

We believe that the progression to the autonomous vehicle is not simply a series of technological steps and that there is a powerful need for supportive management infrastructure. RideCell appears to be doing a very credible job in this area and to be positioned as a must-buy acquisition candidate, down the road, for numerous large entrants in the autonomous vehicle field to contemplate.

Visit their website: www.ridecell.com/autonomous.html
CC Image courtesy of mariordo59 on Flickr