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Lack of focus on consumer behaviour is slowing transition to sustainable mobility

by Matt Hester | Sep 10, 2019

The pressing need to transition towards more environmentally-friendly and sustainable transportation services continues to receive high levels of coverage in the media. Electric vehicles are widely available, but uptake is still relatively low. MaaS (Mobility as a Service) options, from commercial car sharing and ride hailing (e.g. Zipcar and Uber) and more recently e-scooters and peer-to-peer car sharing (e.g. Bird and Drivy), have gained traction to varying degrees, but we have yet to see the sizeable shift to these alternatives that would reduce petrol and diesel car ownership, and help us achieve looming environmental targets.

The disconnect between macroeconomic targets and microeconomic realities means there remains a number of barriers to adoption for these alternative transport methods, and further emphasises the need for a better understanding of what will encourage consideration of alternatives and bring about behavioural change amongst consumers. Only with this understanding can countries across the world have a better chance of achieving vital environmental targets.

In terms of Electric Vehicles (EVs), despite strong growth in sales in recent years, EVs have only achieved 2.2% penetration in the global light vehicle market (link). Price is a key factor – for example, VW’s electric e-Golf is £6,620 more expensive than a basic petrol Golf model, even after the government’s plug-in grant (link). Although the cost of producing EVs will continue to fall, it will be several years before equivalency is reached. For consumers considering their next vehicle purchase, the lack of an established 2nd hand EV market and the high list prices make EV purchasing expensive. Added to this the lack of widespread charging infrastructure in many markets, and price will continue trump ethics for the vast majority of consumers for the time being.

What about alternatives to car ownership? Ride hailing (e.g. Uber, Lyft) and ride sharing (e.g. ZipCar) have been touted as alternatives for car ownership, but how viable are they? Not really, at least for now. We know from our own research (link) that usage of ride hailing services doesn’t correlate with a reduction in car ownership intent – in fact, frequent users of ride hailing services are more likely to be considering an imminent car purchase than those who use less frequently. There are broader factors at play here, such as income and where you live, but it raises the question whether ride hailing services are used instead of regular journeys in owned vehicles or as well as. Our research suggests it’s more of the latter. Car sharing services like Zipcar have become more widely available, but it comes back to price and availability again. Given the comparable costs to regular hire cars, services like Zipcar are more feasible for infrequent users or people using primarily for business where they need a car at short notice, i.e. a small fraction of journeys made.

e-Scooters are a much more frequent sight on the streets of many major cities, but our urban infrastructure and regulation will need to change before these can achieve significant adoption as recent problems in London highlight (link).   

It should be noted that conditions vary by market and region, and they continue to evolve: the availability of MaaS-based services, as well as more environmentally-friendly transport methods (EVs, e-sccoters, etc.) differs by market, as does the supporting infrastructure (e.g. charging networks) and regulation (e.g. government incentives and levies). Additionally, consumer behaviours vary (both by market and across sub groups within markets), as will their preferences and resulting adoption levels.

This second point emphasises the need for a more fundamental consideration of consumers’ own sense of personal mobility, as well as convenience and habits. These 3 factors are interconnected – most of our journeys are short, habitual ones which we don’t think about too much and for which invariably, we will use our own car or public transport. Trying to disrupt this behaviour, particularly for journeys taken in our own cars will require significant investment in marketing and even before that, a better understanding what mobility means to people. Despite the fact I live in suburban London and am well served by public transport, bike sharing, ride sharing and ride hailing services, I can’t see a point at which I’d seriously consider using any of those alternatives for one of the many simple, habitual journeys I make on a regular basis, like going to the supermarket or taking my son to a football match. I recognise the need to change my behaviour with regard to car usage for the broader benefit of society (and the environmental targets we all have a stake in achieving), but haven’t yet got my head around doing that at the sake of my own convenience.

There have been some credible attempts to try and disrupt mobility behaviours – Whim (link) whereby you can pre-pay different amounts per month and gain access to range of transport options (e.g. bike hire, public transport and car hire), some of which are included for the fee paid, others are discounted. A slightly different example is Shotgun from Directline (link), which is a free app encouraging young drivers to drive more safely using a gamified approach (they can get to the top of a “leader board” by being the safest driver), and through which they can get cheaper car insurance from Directline once they’ve demonstrated their safe driving.  

This latter example gets closer to showing an understanding of how people make decisions and how to encourage behavioural change. There is a clear financial incentive – users are trading off their desire to drive as they please for a reduction in the cost of insurance. Likewise, consumers will make other trade-offs, either consciously or sub consciously. For example, they may be willing to accept less convenient forms of transport if there is a clearly defined financial benefit, or if an environmental benefit could be defined and quantified. This could also play out in different ways across different journey types as decision making will vary depending on whether you’re popping to the supermarket vs. driving 300 miles to see relatives.

  • Our advice to clients looking to address new mobility opportunities is this:

    Think about the depth of understanding you have regarding consumer behaviours and motivations - use segmentation or needs prioritisation exercises to properly understand and profile consumers. Targeting specific journey types or consumer profiles may be the more effective route to success.
  • Through qualitative or “landscaping” studies, develop a broad range of potential service attributes and features which could be included as part of a new proposition. Think creatively about the features which could address the needs and motivations identified in stage summarised above.
  • Through choice experiments and scenario modelling, test those attributes and features and identify those which are valued most highly by consumers and the optimal combinations of features which maximise demand. This would also identify the price points at which propositions becomes viable, or also help identify where subsidies from 3rd parties, such as governments, are required to make the proposition viable.
  • Finally, consider proposition messaging and how the benefit is positioned and conveyed to consumers. Behavioural science has shown us how messages which tap into consumers’ desire to conform, for example, have driven proposition consideration more so than spelling out specific benefits. This could be particularly relevant in trying to encourage behavioural change which has a broader societal benefit (e.g. using environmentally-friendly transportation methods).
Matt is a Senior Director at Strategy Analytics and leads our European consumer research business. Contact: mhester@strategyanalytics.com
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