Interview with Ole Harms, CEO of the Volkswagen subsidiary MOIA
Starting in April, the Volkswagen subsidiary MOIA will fill the gap between public transportation and taxis in Hamburg. CEO Ole Harms explains the effects on urban traffic and what he expects policy makers to do.
Mr. Harms, your service is scheduled to start in April in Hamburg – initially with 100 vehicles. What are you planning to do until then?
We have just started testing our all-electric MOIA vehicles on the streets of Hamburg. One of our goals is to train our drivers – to use the vehicles and the app. We have already signed contracts with 300 drivers, and they are now getting the training they need. Additional vehicles will be delivered in the coming weeks, registered and integrated into the system. We will be able to start operations in April with 100 vehicles. The drivers and vehicles need depots and we are currently erecting them, including the charging infrastructure. We still have a lot of work to do. But we are now heading down the home stretch.
Where will MOIA be available in Hamburg?
Within the first 12 months, we will cover nearly the entire city area north of the Elbe River. This will add up to about 300 square meters. A highly concentrated network of virtual stops will be set up in this area. We are currently in the process of defining these stops. Altogether, we will have significantly more than 10,000 stops. No customer should have to cover more than 250 meters to reach a MOIA. We simply have to set up a tightly meshed network.
How much will users need to pay for a ride with MOIA?
That will depend on a number of factors – like the time of day, ride volume and the number of riders. But most important: customers will be able to see what a ride will cost before they book it. The prices will be fixed and will not change even if the shuttle gets stuck in traffic, for instance. An average ride will cost between 6 and 7 euros per person.
That will be less than the cost of a taxi ride, but more than the price of a public transportation ticket.
In terms of price and concept, this is exactly the gap that we will address with MOIA and our pooling principle. We do not want our prices to be below the price of a public transportation fare. We have no intention of luring people from a large shared vehicle and having them climb into a small shared vehicle as a way of generating additional vehicle miles. This is exactly what US ride hailing services have done by setting the rates for their rides very near the public transportation fare.
Let’s talk about pooling: Is ride pooling nothing more than the modern version of shared taxis?
Ride pooling is a new concept for Europe. No legal framework has ever been set up to quickly and easily approve the services. Terms like “shared taxi” and “car pool” do not exactly describe it either. Our goal is to combine trip destinations by using a similar approach. But our service is digital, highly efficient, route dynamic and scaled. No concept has been able to do that yet. Urban mobility is changing, and we believe that pooling can be used to solve traffic-induced problems like congestion, air pollution, noise and lack of space.
Critics have said various mobility concepts would simply worsen the problem of urban transportation by putting even more cars on the streets than the ones already there. How do you respond?
This criticism is frequently expressed without the necessary context. Last year, a US business consulting concluded that alternative mobility concepts had worsened transportation problems in cities because people had switched from public transportation to private mobility providers. The following three aspects should be considered to put things into perspective. First: The study examined traffic volume in US metropolitan areas – unlike Germany, the United States have no legal framework that precisely regulates passenger transportation. In Germany, private drivers who do not have transportation licenses are inconceivable. But they are no problem at all in the United States. Second: The study focuses on delivery and ride hailing services, that is, taxi-like door-to-door trips that generally involve just one passenger. And, third: The rates of the services were frequently lower than the fares for public transportation, something that is much less well-developed in US cities than in Germany. You can learn all sorts of things from the study. But you cannot apply the results to Germany and certainly not to MOIA.
But you are now in a position where you must demonstrate that MOIA will relieve urban traffic problems and not worsen the situation.
For this reason, research in Hamburg and Hannover will be conducted by us and the individual cities to determine the exact effect we are having on inner-city transportation. We are very transparent here. The study will also be designed to show the impact of MOIA on public transportation and to simulate conditions under which an entire transportation system can function with MOIA. We assume that our service will have an improving effect. However, one thing is also clear: Change processes are long-term. This means that some time will have to pass before you can measure the first results.
MOIA has been approved only with the help of an experimentation clause in the German Public Transportation Act. The permits are each limited to four years.
The time factor is one of my points of criticism. There is no binding, long-range and transparent legal framework. Please don’t get me wrong: The German Public Transportation Act is an important achievement. It regulates the transportation of people in Germany and prevents a ruinous bidding war to the bottom or unfair competition like we see in places like the United States. In its current form, however, the law stands in the way of sensible new mobility concepts that are important to the desired transformation of transportation. Cities that want to authorize these services for sustainability reasons hardly have another choice: They have to apply the experimentation clause. This requires a major effort by the cities. It also creates a real legal burden for providers because they do not know what will happen after four years. This has to change. The issue has even been included in the coalition agreement in Berlin.
You seem to be unwanted in Berlin?
We still have not received official notice from the Berlin Senate, the executive body that governs Berlin. But the signals that we have received have not been positive ones. Berlin seems to lack the political will to offer innovative mobility services like MOIA on a city-wide basis. This is certainly regrettable for us because our headquarters are in Berlin.
You are talking here about the city-state of Berlin and not the national government?
That’s right. Regardless of what national law has to say, these decisions are a matter of the individual cities. We submitted a permit application to the appropriate office of the city-state of Berlin last summer. As we have learned from media reports, we should expect to receive a rejection letter any day now. We can only speculate about the reasons right now. On the national level, work is focusing on amending the Public Transportation Act, that is the legal framework. The law would help cities that view ride pooling as a part of the solution and not as part of the problem with the approval process. Also, in terms of international competition, it would be very helpful to have the law amended in the near future.
If the framework is changed, will we see MOIA in more cities?
Before we introduce our service in other cities, we will use Hannover and Hamburg as labs where we can test, improve and stabilize our concept under real-world conditions. We want to have thoroughly tested our concept before we expand it to prevent any scaling flaws. Obviously, we intend to offer our services in more cities than Hamburg and Hannover.