Can Volkswagen’s Moia offshoot revolutionize urban mobility?

If you can’t beat them, join them. That seems to be the motivation behind Volkswagen’s move into the massive urban mobility market with its ride-sharing offshoot Moia.

Car ownership no longer makes a lot of sense for people who live in congested cities, but these individuals still need to get around. That’s is where Moia comes in.

Automotive companies like VW are aiming to grab a share of the burgeoning new economy in on-demand mobility which Uber has ushered in over the years.

Moia will operate hundreds of on-demand shuttles in major German cities like Hamburg and eventually beyond.

Uber’s ride-sharing platform is already used in more than 300 cities in countries all over the world and it enables millions of journeys per day for its huge user base.

Moia uses an app to call up a vehicle, which also collects people along the way with a common or similar destination. The idea is both ecologically-sound and potentially lucrative.

“This market is still in its infancy but it is going to be huge,” says Moia chief Ole Harms. Not that Moia is the only car-sharing service in town – the competition is fierce as firms like Ford and General Motors get involved.

The car industry is responding to market change and Moia aims to win over customers whether they own a Volkswagen car or not.

Uber has show the way although its mobility plans have upset numerous taxi companies and local authorities, Google is on board too and its Waymo outfit recently announced a plan to boost its fleet of autonomous runabouts by buying 62,000 minivans from Chrysler. Waymo is currently setting up a robot taxi service in the Arizona state city of Phoenix.

German premium giants BMW and Mercedes-Benz have just merged their car-sharing businesses DriveNow and Car2Go in order to compete. BMW has also inked a deal with Intel to start production of self-driving cars by 2021.

“We are experiencing a fundamental change in the industry,” said German automotive expert Stefan Bratzel. “Owning a car is now just one of a number of options.”

Car makers could just sell their cars to platforms like Uber but that would mean they are not in the driving seat.

Ride-pooling is a simple concept using an app with a smartphone-based algorithm which brings together people heading in the same direction and arranges for them to be picked up and brought to their destination.

A test in Hanover with 35 VW minibuses worked out well and VW has applied to operate 250 similar vehicles in the city at some point this year.

A milestone for Moia is a major launch in Hamburg in 2019. The firm has applied to operate 1,000 all-electric shuttles in the city although initially 500 will ply the streets. What seems like a concession to taxi firms is unlikely to placate hackney carriage operators. They fear losing trade.

Harms believes shuttles and taxis can operate alongside each other, since customer needs are different. “If you need to get to the airport in a hurry you will grab a taxi and not wait for enough passengers to fill a minibus,” said the Moia man. Taxis also offer more luggage space.

In future autonomous cars will play a big part in all urban mobility concepts, but for the time being human drivers will be needed, said Harms.

Moia argues too that its shuttles will reduce traffic density in cities, leading to less air pollution, noise and congestion.

Angry taxi drivers have thrown a spoke in Moia’s wheel in Hanover by getting a court to order a probe into the firm’s licence to operate on-demand shuttles. The move will delay but not prevent the scheme from getting off the ground.