How city-dwellers get from point A to point B keeps getting more attention, and car ownership is getting left in the rear-view mirror.
Moovit, a public transportation app that uses crowdsourcing to help commuters pick the fastest route, announced Wednesday that it has raised $50 million from a handful of investors, including BMW iVentures.
Car manufacturers such as BMW appear well aware of millennials’ distaste for car ownership. Instead of commuting every day in a car you own, why not choose between buses, a train, a bike or a car-sharing service? Depending on the day, one option may be best, and app makers want to help you make that decision.
Last week, Ford chief executive Mark Fields announced 25 transportation experiments, including a car-sharing program in Germany and a smartphone app that lets New York and London residents order a shuttle. He spoke of being not just a product company (think physical cars) but a mobility company.
All these efforts are leveraging the rise of smartphones to efficiently reshape how people get around crowded urban grids. While car manufacturers aren’t disappearing — U.S. auto sales just had their strongest year since 2006 — they’re experimenting with redefining their businesses amid changing social norms.
This makes for slightly odd bedfellows. Transportation apps — funded or owned by car manufacturers — will recommend how to best get somewhere, and driving the car you own often won’t be the suggestion. It’s not the type of thing that would seem to help sell cars and aid their bottom lines. But if car ownership is fading, it’s always best to disrupt your own business than let someone else do it. By looking to the future and anticipating customers’ shifting desires, carmakers can stay relevant.
Moovit chief executive Nir Erez tells me he envisions BMW’s car-sharing service in Europe being integrated into the app. Last year, Moovit started giving users the options of catching a ride with Lyft. While the new funding will help Moovit expand around the world, the app will also be adding features to aid commuters.
Two years after first launching in Tel Aviv, Erez’s app is available in 500 cities worldwide, including 50 in the United States. It has 15 million registered users.
A user can plug in her destination and see a variety of ways to make her trip. The app uses GPS data gleaned from users’ smartphones, data users manually input, plus data cities share so that it can predict exact arrival and departure times.
For example, Moovit asks users if their bus is crowded, so it can share that information with riders who may consider taking the same bus.
“It’s happening in such a great way it’s almost like magic,” Erez said. “The camaraderie of people who are using public transportation is way more strong than any community I’ve seen.” He says Moovit gathers 2 to 3 billion data points a month from users. All of that data is power, and means Moovit is better informed and able to steer commuters on the best path.
Aside from BMW iVentures, Nokia Growth Partners, Keolis, Bernard Arnault Group, BRM Capital, Gemini Partners, Sequoia Capital and Vaizra Investments are also investing in Moovit’s Series C round.
Moovit is a free app now, and the start-up is prioritizing growth before monetization. That’s a luxury available when you’ve just raised $50 million. But one day it might prove to be a very lucrative advertising platform. Since the app knows your destination it could in theory share an advertisement or coupon from a restaurant or business that’s a short walk from where you’re headed. These ads would be personalized and relevant, which advertisers are happy to pay a premium for. Erez acknowledges that location-related advertising is in the app’s future.
With 7 billion people on the planet but only 900 million cars, he sees a bigger opportunity to serve non-car owners who want a cheap and green way to get around.
One Israeli transportation app, Waze, already made a mark on how drivers get around. Now we’ll see if another Israeli start-up can do the same for public transportation.