Climate Action

Is public mobility the next public transport revolution?

 Could mobility subsidizing help us achieve climate targets?

Could mobility subsidizing help us achieve climate targets? Image: Kolumbus Bysykkelen

Lars Christian Grødem-Olsen
Managing Director and Advisor, Movability
Nils Fearnley
Senior Researcher, Institute of Transport Economics
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This article is part of: Centre for Urban Transformation
  • Public transit authorities are evolving into public mobility authorities by integrating and subsidizing shared mobility options, including bike-sharing, carpooling and micromobility services.
  • Successful examples demonstrate the potential of subsidies and incentives to promote shared mobility.
  • Governments, municipalities and private shared mobility operators must collaborate to offer passengers more flexibility and choice, leading to less congested and less polluted urban areas.

Norway has been lauded as a success story for its electric car incentives. Almost 90% of new cars sold in Norway are now electric. However, this has yet to solve the problems of congestion, noise and accidents in urban areas. In fact, the success poses a threat to public transport, which is now facing stagnation. When Norway has second thoughts about the private electric car, it is worth asking how we as nations can stimulate mobility that will help us all reach the Paris agreement.

And as car-sharing operators and micromobility operators – those offering transportation with lightweight vehicles such as scooters and bikes – fight to be profitable and leave unprofitable markets, a new trend is emerging. Public transit authorities and municipalities are subsidizing and integrating new mobility into their offering.

What is happening?

Have you read?

What is public mobility?

During the past decade, Norwegian public transit authorities such as Ruter, AtB, and Kolumbus have reframed themselves as mobility companies with more autonomy in deciding their menu offerings to compete with private cars.

Total French carpooling keeps growing after a COVID-19 slump.
Total French carpooling keeps growing after a COVID-19 slump. Image: Movability.io/Local carpooling observatory

France has allocated €150m to subsidize short-distance carpooling, a growth engine for getting people to share commutes. As a result, drivers are paid €3 per passenger and the passenger rides for free. Drivers are also given a bonus of €100 after completing 10 rides; one operator reported that 94% of drivers continued carpooling regularly after receiving the subsidy.

mobility short-distance carpooling subsidies
How short-distance carpooling subsidies create a transit network outside of main transit lines. Image: Movability.io/Blablacar

Public transit authorities are also expanding the offerings in their monthly tickets. In Trondheim, Norway, the local public transit authority AtB has partnered with operators to offer season ticket holders unlimited bike-sharing rides and two hours of car-sharing a month. Ruter, Kolumbus and AtB have subsidized the launches of micromobility schemes in rural areas.

“When we started promoting carpooling for commuting in our area, the response was very low,” says Jacques Doridam, VP of the Communauté d’Agglomération du Beauvaisis, in charge of mobility. “We were convinced that simply encouraging it wasn’t enough, so when the law [Loi d’orientation des mobilités] allowed it, we immediately chose to compensate carpoolers alongside the operator.

“During periods of rising fuel prices and then inflation, drivers quickly understood the financial advantage they could gain and the savings for the passengers. What initially seemed like a gamble is now a real success, as we have multiplied the number of completed trips by 10 between 2021 and 2022, and it’s still growing.”

Public transit authorities from Brussels, Paris and Berlin are also launching journey planner apps that integrate taxis, micromobility, car-sharing, demand-responsive transport and carpooling. The apps allow customers to plan, book and pay for multi-modal journeys. The benefit to new mobility operators of access to the public transit authority’s large customer base is obvious.

These signs point to a potential reframing of public transit authorities to public mobility authorities. Public mobility authorities coordinate transit and shared mobility to compete with private cars in their regions.

But why not just increase transit?

Your enemy’s enemy is your friend

Despite its well-known external costs, the car retains a dominant market share in most cities worldwide. Public transport alone cannot win the battle to reduce car reliance. People in the 21st century are used to the convenience of direct travel with a car – they’re not prepared for the inflexibility of public transit.

Improving transit and mobility to entice users is much less effective than restrictive policies discouraging car use. However, to avoid inequality, motorists must be given a convenient, curated public mobility menu.

Shared mobility services and transit can join forces here. For decades, municipalities have subsidized urban transit in areas where it isn’t profitable for the sake of public good – why not do the same with shared mobility?

Unfortunately, this is not as straightforward as one may think.

Mobility Questions for governments

Regulators and operators need first to change their perspectives to become aligned. Since they operate commercially, viewing shared mobility markets as transit is not common. They also need to start answering some difficult questions together:

  • Where are the boundaries of the roles of the municipality and the public mobility authorities?
  • Which kinds of subsidies should be applied in which areas and under which circumstances?
  • How can the logic of public and commercial entities align, let alone adhere to state aid and other legislations?
  • How do we subsidize a market with immature and unprofitable services and technologies?
  • How do we get citizens to demand the benefits of new mobility services?

Generous electric car incentives will exacerbate urban congestion, noise and accidents. Yet neither public transport nor any other shared mobility alternative on its own can outcompete the car. Their combination, however, can create a powerful travel alternative. Rather than limiting themselves to scheduled public transit services, public transport authorities across the globe should seek to become public mobility authorities.

Local authorities can continue to discourage car use and promote shared mobility through regulation and reallocation of infrastructure. Commercial shared mobility providers will provide service, availability, and pricing data with a coordinating entity in return for access to a larger market.

If private cars are to be dethroned, the government, municipalities and private shared mobility operators must work together. The end result will be flexibility and choice for passengers, less congested cities, lower pollution and a small but important contribution toward climate targets.

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