For all the potential around the launch of Volkswagen’s move into on-demand transportation services, it knows it must focus on the benefit they have on society rather than the technological innovation if it is to take on Uber.
As obvious as the distinction sounds, the fledgling business doesn’t see its rivals making enough of it. “This is something we want to build on because there’s a human element that we forget around the discussion of technology,” said Maria Soni Reissfelder, the marketing director picked to shape the brand Volkswagen has named Moia.
Launched last month, the 50-people strong business is the tip of Volkswagen’s bid to futureproof its profits, targeting those who would prefer to pay for mobility services (like a ride-haling app) instead of owning a car. If successful, then the standalone outfit believes it will be a “top three mobility provider” over the next 10 years and consequently become a “substantial portion of the [wider Volkswagen] group’s profit”.
Moia’s corporate funding will be used to invest in early-stage companies. Later, Volkswagen hopes to be able to generate profit from external investors for those start-ups it can develop further.
The $300m it invested in Gett’s ridesharing business will only get it so close to its 10-year goal, proving the need for a strong brand to take it further. Part of this positioning will stem from how Moia requests and uses personal information, a stance it hopes stands it in good stead ahead of Europe’s new privacy directive that will prevent companies from using someone’s data unless they have their consent.
Technology not marketing is normally top of mind for launches like Moia, which is why Reissfelder believes Moia’s “people-focused” brand can make a splash even if the Uber-sized odds seemed stacked against it.
Moia in Sanskrit means “magic”, which encapsulates exactly the sense of wonder and excitement it wants people to feel when they use its services; magic lives and dies by how well a trick is communicated to an audience, which is why Moia’s marketers have been involved so early on its development.
Analysts have noted that car companies will need to rebrand themselves as mobility service providers if they are to take advantage of a trend that has wide-ranging opportunities. Flooding the market with as many vehicles as possible is not sustainable when its clear people no longer buy at the same frequency, pushing car makers to work out how to curb manufacturing to sell less vehicle variations and yet sell those remaining models several times. Meanwhile, revenue from services like ride-hailing and car-sharing could - in the long term - exceed what one person would pay for a car.
“When I talk to my peers they are very clear that we will have autonomous cars and that everything is changing for the better. And yet when I talk to my friends or family it’s a future that they aren’t so sure about,“ Reissfelder explained.
“This [the difference] is our starting point and therefore we are based in Berlin; an urban centre where can clearly see the pain points to address. We’re taking a very customer-led approach to integrating people in the phase before we launch services to get their feedback. The idea is not to disrupt with whatever new technology we produce but rather act like a good partner in how we help transform their lives.”
It’s a far more reserved manifesto compared to those for other technology firms but then most don’t have to worry about quickening the demise of their owners. There’s no ignoring that younger people are driving less than previous generations thanks in part to the ride-hailing services Moia hopes to emulate. And yet it’s a trend that will play out across several innovations from autonomous cars to connected cars rather than just the idea that people won’t own cars in the future.
Yes, car ownership is “still important” to Volkswagen, argued Moia’s marketer, though there are wider socio-economic factors tipped to make it less of an issue in some markets, specifically highly-populated cities such as London. “Traffic jams” and “no parking spaces” normally characterise these places, she continued and so the brand is focused on communicating how its services help people “move through cities” as well “help cities face their problems such as noise, pollution, waiting times and stress”.
When it launched, Moia said it would only use “legal driver sources” and would not attempt to flout existing regulation and infrastructure to recruit drivers. The rationale being that Moia wants to complement existing public transport services rather than replace them, added Reissfelder. These claims of peace aside, Reissfelder and her team will need to work hard to convince city administrators and regulators to collaborate around areas such as licensing and infrastructure to help it achieve its 10-year goal.
For all the praise heaped on the likes of Uber, the social cost of them is an ongoing issue; from crime to implications for the future of low-wage work, Volkswagen is mindful of the myriad of issues it will need to overcome if it is to become profitable. Whether it being in Berlin – one of the most crowded places in Europe for transport options – is the right way to go about tackling these issues remains to be seen.
No wonder then that Reissfelder plays down the idea that Moia could be a threat to the wider Volkswagen group, arguing that it needed to be closer to the sector’s trends after previously being slow to embrace electric cars and reluctant to pursue alternatives to ownership.
Volkswagen’s leap into mobility with Moia dovetails with its ‘Strategy 2025’ to focus on new technologies that some analysts predict could cost in the double-digital billion range. For a business whose image has been tainted on the back of the falsification of emissions data, mobility services such as Moia could help not only help it bolster customer sentiment but also carve out new business models.