Commuter Ride-Sharing
Car pooling services offered to workers by employers to ensure that they get to work safely, to reduce their impact on the environment, and to reduce the time wasted travelling to work.
Potential Market Size (by 2022):
30-70 Billion USD; ~300 Million Users
THE CHALLENGES
More people are travelling further.
As cities grow so do the number and distance of journeys that people need to take to access work, education, and other services. Low income workers in particular often live further outside
of the city where rent is lower meaning that they take the longest journeys.
It is hard to keep travellers safe.
Road accidents are on the rise. 90% of the world's fatalities on the roads occur in low- and middle-income countries, even though these countries have approximately 54% of the world's vehicles. Communal transport often provides an opportunity for petty or violent crime too. Women in particular face an additional risks of harassment.
It is expensive to build a fair public transport system.
People earning lower wages often live further away from their work. Because they have lower ability to pay, it is usually not possible to serve them without government subsidies or without compromising on quality.
Cities face a legacy of underinvestment and poor city planning.
The majority of cities in the developing world were not designed to cope with modern mobility patterns and have faced many years of underinvestment.
Source: TomTom Traffic Index 2015
THE NEEDS
Getting to work each day can be a long and painful journey for hundreds of millions of people. They waste hours in transit in traffic and on inefficient routes, using many forms of transport. The same people often spend significant portions of their paycheck on these long journeys. Poor transport limits the services people can access, the jobs they can pursue, their educational opportunities, and reduces the time available to do other tasks and to spend time with family.
"Only 7% of the population here can commute to work taking one form of transport. It’s common for people to spend 40% of their daily income on commuting costs."
Raul, 32, Mexico City
"I spend 4 hours commuting to work everyday, sometimes 6 if something goes wrong on the route. I’m constantly whatsapping my boss to say I will be late."
Maricela, 38, Mexico City
In Mexico, women of all ages are concerned for
their safety during transit. How and with whom
they get from point A to point B is constantly on their minds. For mothers who work, time spent battling traffic means less time to invest in the lives of their children.
"The fact that I can’t travel by myself because I’m a woman makes me feel like I can’t be the strong, independent person I want to be. It reinforces sexism in society."
Yvette, 34, Mexico City
"Life is very hard when you have children and work. Because of traffic kids spend a lot of time alone and doing things that you don’t know about."
Lynda, 41, Mexico City
Most commutes are uncomfortable and undignified. Worse, many commuters face the possibility of theft, assault, harassment as well as unsafe vehicles and driving. The ability to have a seat in a safe vehicle, travelling a direct route, alone or with friends is currently a luxury most could never afford.
"Taking public transport can be such a pain. Imagine being constantly crammed up against a crowd of people for hours and hours everyday."
Olivia, 43, Mexico City
"If I could afford a car, or to take a car everywhere, I would. Even with traffic it would be more enjoyable."
Mariana, 29, Mexico City
GLOBAL MARKET POTENTIAL
Potential Revenue
in Billions (USD)
addressable market
Potential Users
in Millions
people
Assumptions
Based on Mexico City market:
50% of number of large enterprises
30% uptake of staff in each enterprise
Average distance of commute of 6500-9000 kilometers per year per person
Price of 0.16-0.27 USD per kilometer (not including costs shared by riders)
Extrapolated to global, taking country populations and adjusting for:
Urban population
GDP per capita (PPP)
Internet usage
Extrapolated to 5 years time using projected figures for the year 2022
5 yrs time with even more access for BoP
See above, except with:
Inclusion of staff working in medium-sized enterprises
Source: Dalberg analysis of World Bank data (urban population, GDP per capita - PPP), INEGI (number of employees), UN Habitat and Globescan (commuting distance), Innovator websites and interviews (price, uptake data), ITU (internet coverage)
WHEN IT WORKS
Develop business models which make ride-sharing affordable for commuters (e.g. by working with employers to subsidize commutes etc.)
Make safety a number one priority and create product features that enhance the safety of riders and drivers
Create a more enjoyable riding experience for passengers.
Implement product features and updates that ensure the most efficient rides possible.
INNOVATOR STORY
SPLT
SPLT is a corporate ride-sharing enterprise based in Mexico and the USA founded in 2014. SPLT’s offers a ride-sharing services which matches the routes of employees to work, allowing them to split the cost of the commute. The company pays for SPLT and offer it as part of their employment package.
By using SPLT, employees are able to avoid the usual dangers of their commute by controlling who they ride with, and they save by sharing the cost of each commute.
Companies which use SPLT ensure that all their employees are able to reach work more safely and reduce their carbon emissions. For example, during a 6 month pilot with Bosch in Mexico, SPLT found that 1000 employees saved 75,000 KM of driving.
SPLT is continuing its expansion in the Americas and looking at ways to work with smaller businesses, as part of their expansion approach.
Founded: 2014
Based in: Mexico & USA
Employees: 15+
Revenue: Not disclosed
Total Investment: ~1.5M USD
Investment Stage: Seed
Business Model: B2B (with customers splitting cost of each commute)
MEXICO'S MARKET POTENTIAL
The Customers
End User:
Employees of large businesses, usually blue or entry-level white collar workers
Who pays?
The employer (sometimes with employees also contributing towards the costs of trips) or individual commuters or travellers.
Investment to Date
Raised to date across platforms we have engaged
~2 Million USD
The Players
(Estimated 3-5 companies)
The Mexico City Market
Urban Addressable Market
Calculated based on uptake of 30% by staff at half of Mexico City’s large enterprises
~2 Million
Directional Revenue Potential
Based on total addressable market taking average commute in Mexico City on working days
USD 250-600 Million
USER STORY
Anya
Mexico City
For many women like Anya, transportation within and outside Mexico city is a big problem. “The amount of time most people spend commuting to and from work each day is just crazy.” Normally her commute requires taking multiple trains and buses to get to the final destination. With traffic and other delays it can often take 3 hours each way. Anya would love to reduce her commute time but moving closer to work doesn’t seem like a viable financial option. “I would live closer [to work] if I could afford to move or live in a different neighborhood but that’s not an option.”
So she’s keeping her eye out for a new opportunity that is closer to home. Anya also worries about caring for children and being able to work in the future, “You need to work to support children, but you can’t support children when you’re gone all the time.”
When Anya can afford it she uses a pooled ridesharing service to get to work because it drops her close to where she’s going and it’s a much more pleasant experience. “Using ride sharing to get to work is such a luxury. I sit the whole ride and pull up to the location.”
She also avoids sexual harassment and feels more safe using pooled ridesharing services than with other options. “On public transport women are constantly harassed and often robbed. Plus, they should never take a taxi alone. It’s way too dangerous. Our options are limited so we just bear it.”
Anya spoke of other safety benefits of using pooled ride sharing services such as being able to see the details of the driver, co-passengers, and their user ratings. “I select my ride based on the reviews, amount of time, and the rating of the driver.” But Anya is still looking to improve her experience and believes these platforms can do more to increase safety. “Maybe there should be a panic button for passengers and drivers.”
She would also love to find more affordable ride sharing options to get to and from work. “If there was a way to better manage the commute I think a lot of people would do it–traveling 3 hours each way is exhausting. There has to be a better solution to the traffic here sometime soon.”
UNLOCKING GROWTH
To catalyze the market, global tech players could use their strengths to...
Advocate for better regulation.
As cities come to terms with new mobility platforms, many cities are proposing tighter regulation. Rideshare (and other) innovations risk being grouped together with ride hailing applications. Tech companies could consider ways to work with and educate city regulators to ensure that innovation is not stifled.
Provide patient capital for innovators.
Matching supply and demand in car pooling as well as negotiating B2B contracts requires upfront capital that is often not available to smaller transport companies.
Be early adopters. In markets where they operate, global tech players would be ideal early adopters for commuter pooling. Responsible employers should include all levels of staff in the scheme, particularly considering blue collar and entry level employees are likely to see the most benefit.
For example, in Detroit, Lyft partnered with SPLT to provide drivers for shared Non-Emergency Medical Transportation, reducing ambulance usage and missed appointments.
To unlock demand, local innovators need to develop products that...
Reduce commuting costs for customers through innovative business models.
Local innovators who think creatively about their business model can reduce the cost of commuting for passengers, for example by passing on some costs to employers.
Use technology to sort out the logistics.
A critical component of making the ride enjoyable is a hassle free experience for riders and drivers. Product features and updates should ensure the most efficient and effective ride possible.
Develop features that increase safety. Continuing to implement product features that ensure safety of passengers and drivers is a necessity for all innovators in the transportation space. However, local innovators should make an effort to understand the unique safety needs of a place and population (especially as the service scales to new geographies and audiences) to ensure increased product defensibility, differentiation, and ongoing customer engagement.
Make the experience enjoyable. Obviously, if a service improves the commuting experience in addition to reducing costs, demand will be high. Local innovators should work closely with drivers and riders to understand what makes a great experience and monitor if and how this changes over time. Local innovators should be keen to help people develop relationships, and a sense of community, in order to encourage continued use.
To realize the potential of every child, UNICEF could...
Advise decision-makers on how to support ride sharing. Suboptimal regulation can limit the opportunities to innovate and compete on transport challenges. UNICEF can work alongside tech players to champion the role of tech in reducing human mobility risks for children, youth and children.
Help create safety standards. UNICEF can convene and help Governments and industry develop standards which meet the needs of vulnerable children, youth and women.
