Movements | June 7th, 2021
What the merging of National & Local transportation says about the next decade of the mobility revolution.
This week is a guest post by our friend David Litwak, founder and chairman of Mozio, one of the early pioneers of mobility-as-a-service in the travel sector. If you’d like to guest DJ or write for Movements, reach out to us here.
Last week our investment group committed to invest in Landline. Landline is building the common language between our national and local transportation infrastructures, starting with a bus codeshare network that allows you to board a United Airlines bus from an airport gate, but ends with something truly revolutionary – redefining the idea of the airport to look more like this:
If you’d like to invest alongside us, read the in-depth brief here and invest here, or sign up on our website for to follow along with other investments, but Landline illustrated a wider point that we’ve noticed and that has become a core part of our investing thesis -- the trend away from onboarding to integration.
10 years ago I started Mozio with the idea to build a Global Distribution System (“GDS”) for ground transportation -- a middleman in the ground transportation industry similar to what existed in air travel with Sabre, Amadeus and Travelport.
We were way too early -- we started an integration engine just as the “onboarding” phase, the invention of Uber and Lime and Via, was getting off the ground.
As a result we built a solid business in a relative niche -- airport transfers, and have bided our time while powering much of the behind the scenes activity for major travel brands like Booking.com, Air France, JetBlue, TUI and more.
One of our central theses at Ground Control is that the first 10 years of our current mobility revolution were dedicated to bringing transportation fully online, or “Onboarding,” but the next decade will be dedicated to integration of these various forms of transportation.
Uber brought local car service online, decimating competitors who relied on manual dispatch and call centers. Silverrail brought national rail systems into the modern age and made them accessible for distribution while updating their internal IT systems. Lime, Bird, Tier, Revel, and Motivate added a completely new category of bikeshare and scootershare that we now take for granted. Public transit booking engines like Bytemark, Masabi and more have been adopted and many agencies now run on “Open Loop” systems that allow you to use your Mastercard or Visa to tap on and off the subway.
In air travel, the last 10 years have been filled with airlines finally adopting “NDC” (basically an XML feed), paving the way to basic API functionality and the rise of companies like Duffel and Kyte to disrupt traditional GDS’s like Sabre, Amadeus and Travelport.
Much of the innovation over the past 8-10 years has been simply bringing a lot of these mobility options online or updating systems that were so archaic they didn’t allow for any sort of external integration, and as a consequence much of the mobility revolution has mostly stayed siloed: I remember being shocked that Lyft, Uber, Bolt, FreeNow and most of the major rideshare companies didn’t have fully functional APIs.
Billions of funding and no focus whatsoever on external integrations? Seemed preposterous.
But everyone was SO focused on their own walled garden that no one thought ahead about integration into the wider ecosystem.
This part of the mobility revolution isn’t fully done -- companies like Zeelo and Busright are still bringing company and school transportation respectively online, Portside is building out systems for private business aviation that often exist on archaic systems. And you can argue the “onboarding” phase will go on for quite a while longer -- after all, there will be entire new forms of transportation invented, like autonomous driving and flying cars.
But we’ve been in the “move them off of excel spreadsheets” phase for a while now.
So it begs the question -- what’s next?
Mobility innovation is entering the Integration phase and with it we’re noticing, and guessing, at a few major trends.
The Merging of Local, Regional & National Infrastructures
Air Taxis are the perfect symbol for the coming merging of local and national -- a local form of transportation, the taxi, and a form of transportation like air travel that is synonymous with long distance airlines, becoming one.
Over the next 5-10 years we are going to be forced to figure out how to duplicate some of what an airport offers, from bag check to security, away from the airport and in the city as more people want to take an Air Taxi straight to the tarmac.
I expect there to be entire other businesses adapting rooftops for flying cars and installing lounges & security in high rises.
The idea of selling a full flight that ends in Midtown Manhattan won’t be ridiculous, and in order to do so more and more airlines are going to have to figure out how to interface with new forms of mobility, and vice versa. Landline is tackling this, building out the infrastructure for baggage handling, TSA check, integration into the airline’s booking system and more so that they can sell buses, trains, flying cars and more.
But this trend also applies to existing players starting to push through the lines between urban and national.
Rappi, which started as local food delivery, is launching Rappi Travel. BlaBlaCar, normally regional carpool, has launched collaborations with scooter companies. More will follow as “mobility” becomes a more encompassing term -- I expect some new more general Online Booking Engines (OTAs) to sprout out of regional and local platforms.
The Platformification of Rideshare
Gett launching their corporate travel booking engine and focusing less on their own rides and more on integrating a diverse number of ride options to build a platform for corporate travelers needs is a good example of this -- they recognized that serving a multinational wasn’t JUST about innovation, it was also about integration -- they couldn’t possibly cover every market themselves.
As mobility matures, this trend to integration will increase and we’re already seeing it -- while Mozio was an early adopter working with corporate travel programs like AMEX GBT you now see Voll and Skipr and others launching to help corporate travelers.
And Mozio has noticed over the last year an increased focus by rideshare companies whose strategy previously was to just spend their resources conquering a new market, to actually start putting resources into their APIs.
Uber even bought Autocab, one of the older taxi dispatch systems.
Last year I joked about the 5 stages of transportation startup grief, which was a not-so-veiled swipe at Uber’s fall from thinking they were going to kill taxis to literally buying a taxi dispatch app:
As more and more companies come to terms that mobility isn’t that different from every other form of transportation -- there will be regional and sector champions that will ultimately need to integrate with each other -- rideshare companies will start refashioning themselves as platforms with a balance of “in house” services and outsourced services.
MaaS Finding Its Legs
MaaS players like Whim/Maas Global, Trafi, Transit, Citymapper, Moovit and others have often been restricted to launching route planning/transit apps, selling data as as service or laboring through city specific partnerships with municipalities that happened to be at the tip of the spear -- just look at Whim’s city partners:
No one launches in West Midland and Turku unless quite literally those are the only options available to you . . .
MaaS is currently in the trough of disillusionment in the famous “hype cycle” -- too many local transit agencies weren’t able to be plugged into, too many local taxi or rideshare companies didn’t bother to develop an API.
That’s starting to change.
The Slicing and Dicing of Regional & National Transportation
10 years ago if you wanted to go across town you were largely left with the choice of public transportation or Taxis. Now we have public transit, docked bikeshare, docked electric bikeshare, dockless ebikes, standing scooters, sitting scooters (Revel), vanpool (Via), casual carpool, commuter carpool and rideshare. Every pricepoint, every tradeoff between time, price and convenience, has been accounted for with a new type of transportation.
We’re starting to see this with regional & national transportation -- Blade’s order for flying Taxis from Wisk, which only seat 2 people at a time, is a good example of what’s to come -- we will move from an ecosystem that largely consists of a binary choice between helicopters and jets to a full menu of different options for different types of use cases.
United Airlines just bought 15 Boom Supersonic aircraft, setting up a world where a 1 hour flight from NYC to LA costs twice as much as a 6 hour flight.
This will of course make integration even MORE necessary, as our existing infrastructures need to accommodate more and more types of transportation.
The Rise of Middlemen
And the timing is increasingly good for middleman businesses, like Mozio, in mobility.
Tours and activities are the most recent analog in the travel industry -- the sector spent years just bringing tours and activities online, with numerous reservation platforms like Rezgo, Fareharbor, Peek and Xola tackling the market, one Hop On Hop Off bus or Segway tour outfit at a time. Viator sold for 200M after 20 years of building out the first activities booking platform, and a couple years later GetYourGuide and others were worth billions and now you are seeing a host of middleman who tackle the integration problem pop up, from Redeam to Indie to TripAdmit
In order for integration businesses, or marketplaces, to exist you need to have enough of the industry onboarded and accessible.
As travel and mobility players get their technical house more and more in order, it’s time to look outwards.
Follow along as we invest in these companies at Ground Control, back the first one, Landline here, read more in-depth about it here, and if you are in need of a transportation & mobility middleman, hit up Mozio (www.moziogroup.com).