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17 Mar 20

5 Reasons for low mobility uptake in Australia

As Mobility remains a hot topic in Europe (at least, in less virus-sensitive times) and is somewhat gaining maturity and uptake, it’s unlikely to find a similar level of enthusiasm in Australia. Ride hailing is popular, indeed, as it replicates the comfort of a car and, because of solid competition between the providers, is an affordable upgrade from public transport. But car sharing, scooters, public transport, (electric) bike sharing? Not really a success. Here are 5 reasons why Australia is not (yet) crazy about mobility.

1. Scalability

Australia is a big place – this shouldn’t come as a surprise to anyone – but “big” in Australia also means “empty”, with an average population density of 3.2 people per square kilometer, but a real density of 0 people per square kilometer in most of the country. Shane Curran, the Sydney-based Director APAC at Connector: “Sydney and Melbourne count roughly 5 million people. Add Brisbane (2.4 million people), Perth (2 million people) and Adelaide (1.3 million people) to the mix and you’ve covered 2/3 of the total population.”

Shane continues: “Mobility businesses are low margin businesses that need volume and scalability to become profitable. Compared to Europe, where population density is much higher and major hubs, such as London, Brussels, Amsterdam and Paris are close to each other, the growth potential is much higher than in Australia.”

2. Public transport

The backbone of mobility is public transport and it is not popular in Australia. People in Melbourne, which has the most extensive public transport network in the country, use trains, trams or buses for about 10% of their journeys, versus roughly 30% in Europe. So, what’s the problem?

There seems to be a divergence between the conclusions from local Governments and those from the public transport users. Governments seem to think that the lack of PT popularity is due to behavior: people haven’t “tasted” how good it is, so it’s not perceived to be adequate. User communities however complain about more essential defaults: public transport might be good in city centers, but most people live well outside the CBDs. Suburban Australia is extremely vast and poorly covered, both in terms of availability of public transport stops and frequency of the existing lines. (source: www.ptua.org.au)

This leads to the conclusion that Australian public transport pleases tourist but is not a real commuting alternative for most of the population.

3. Suitability

Even if Australia is, from a cultural perspective, related to Europe and Asia, the country is closer to the US from an automotive point of view. The car is much more than a mode of transportation, it is an essential work tool for many Australians. Farmers need to cover large distances and people working in the mining industry obviously can’t take a train to work. For these people, the car is essential to have access to a job.

Irwan Iriks, co-founder at OviDrive and living in Perth: “It’s not correct to say that Australia is not mobility-ready. We’re a car-centric people, for practical reasons. Ride-hailing, car-sharing and car subscription models are gaining momentum, which implies that Australians are getting used to usership over ownership, as long as the solutions are suitable. This will gradually change as suitable last-mile solutions become available but copying European models won’t work; we need solutions that are fit-for-purpose.”

4. Regulations

Back to Shane: “Many people in Sydney would love to have a decent bike sharing proposal. We have nice weather throughout the year, travel distances in the city centers are within the typical cycling range, which could even be extended to suburban locations by deploying electric bikes. It might convince those people who are looking for active alternatives to trains or cars.”

“Regulations however are not embracing these solutions. Electric scooters are banned from public land anywhere in New South Wales. Also, we need to wear helmets when we use a bicycle, which makes it difficult to hire a bike on an impulse. Not every Australian carries a helmet in their backpack at all times.”

These are a few examples of regulatory obstacles, but generally speaking, there are close to no governmental incentives to leave the car at home and use Mobility solutions instead.

5. Supply chain

As a result of the first 4 reasons, the Mobility supply chain in Australia is very much limited to car-centric solutions. FMOs (leasing companies) are looking into mobility, but again from a car-centric point of view: subscription and short-term rentals models are in scope, but public transport integration or micro-mobility are yet to be integrated. OEMs show very little interest and focus on car sales; OEM innovation is focused on sales channels (digital) rather than on Mobility.

As public transport is (perceived to be) inadequate, public transit solutions are however becoming more popular. On-demand or scheduled shuttle services are popular and have started to fill in the gaps of traditional public transport. Exactly this might become the sweet spot for micro-mobility: the coordination between shuttle services and last mile transportation.

Disruptor-vendor, meet disruptor-client

To some extent, Australia is in no different place than Europe a few years ago. Mobility exists on conceptual level, but still needs find a correct use case that can convince suppliers and corporate clients. This use case needs to be tailored to the Australian suburban user, combine private and public initiatives and solve the problems that commuters face every day: congestion, expensive parking and alternatives for suburban commuting.

Finally, Mobility needs its first big client, be it a corporate client or a governmental fleet, ready to disrupt and try out a new approach. This client might need some time to figure things out, but the potential benefits are immense for the organization, its employees, the Australian cities and the environment.

Authored by: Yves Helven
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