How do economic efficiency and public services find a balance?

The mobility sector is undergoing a profound transformation. Digitalisation, climate protection and changing mobility needs require new solutions to make transport more efficient, sustainable and socially equitable. While public transport has traditionally played a central role in ensuring essential services, an increasing number of private providers are entering the market with new mobility services. Ride-pooling, car-sharing and digital platforms are either supplementing traditional public transport or competing directly with it.

This development has led to a key area of tension. On the one hand, private mobility services have the potential to make existing transport more flexible, efficient and customer-friendly. On the other hand, there is a risk that they will primarily focus on economically viable routes, leaving less profitable yet socially necessary services reliant on public funding. A particularly contentious issue is the extent to which public funds should be used to secure essential services provided by private operators – a question that frequently sparks political debate.

In 2018, Berlin launched the BerlKönig, an on-demand shuttle service developed as a public-private partnership between the Berlin public transport company BVG and mobility provider ViaVan. The service aimed to fill gaps in public transport and offer a flexible, environmentally friendly alternative to private car use. The concept was based on ride-pooling, where journeys were algorithmically grouped to ensure efficient vehicle utilisation.

Despite high expectations, the service was discontinued in 2022. The main reason for its failure was economic unviability. Operating costs were high, and fare revenues alone could not sustain the service. During the trial phase, significant subsidies were required, making economic scalability difficult.

Another issue was the limited integration with the existing public transport system. Although BerlKönig was intended as a supplement, it remained a standalone service with separate fares and booking systems, creating barriers to use and limiting broader acceptance. Furthermore, the service area was restricted to the inner city, leaving out suburban areas where flexible mobility solutions were most needed.

While the BerlKönig struggled, a similar concept has gained traction in Hamburg. MOIA, a ride-sharing service launched by Volkswagen in 2019, has successfully complemented the city's transport system, providing a flexible and environmentally friendly alternative to conventional public transport. MOIA operates on a ride-pooling principle, where multiple passengers share a vehicle along the same route. Bookings are made via an app that optimises routes to maximise efficiency and minimise empty trips.

MOIA closely collaborates with the Hamburg Transport Association (HVV), ensuring seamless integration into the existing public transport system. MOIA fares align with HVV pricing, allowing passengers to use their regular tickets or subscriptions. This integration has helped expand services to areas that are less well connected by buses or trains, making MOIA a flexible addition to the transport network.

MOIA also receives public support and subsidies. The "Hamburg-Takt" initiative, which promotes innovative mobility solutions, provides funding to enhance the service’s sustainability and efficiency. The fleet consists entirely of electric vehicles, reducing CO₂ emissions and addressing the city’s need for flexible, sustainable transport solutions.

Hamburg is also pushing forward with autonomous mobility. As part of the ALIKE project, up to 20 fully electric, autonomous shuttles will be tested in a 37-square-kilometre area of central Hamburg from mid-2025. Vehicles such as the Volkswagen ID. Buzz AD and the HOLON Mover will be bookable via the hvv switch and MOIA apps, aiming to complement public transport flexibly. Initially, safety personnel will be on board, while the impact of autonomous driving on urban mobility will be scientifically evaluated.

Thanks to its close cooperation with public transport operators, MOIA is seen as a key component of Hamburg’s public mobility offering and makes a significant contribution to the city’s transport transition.

A study by the IZT has examined various mobility providers and identified ten ideal business models that range between purely public-interest-driven and fully commercial approaches. These models differ in terms of financing structures, degree of cooperation with public transport and underlying value orientation.

The study was based on a quantitative survey of 27 mobility providers and eight qualitative expert interviews with industry representatives. The findings provide valuable insights into the challenges and future prospects of mobility providers. It became clear that companies engage with public transport in very different ways. While some see themselves as complementary to public transport and support greater integration, others pursue an independent, market-driven strategy.

Financial uncertainty emerged as a key challenge. Many business models depend on public subsidies or private investors, making long-term planning difficult. Additionally, regulatory barriers often complicate cooperation with public transport, as approval procedures are frequently lengthy and inconsistent.

A further obstacle is the technical integration of digital platform solutions with existing public transport systems. However, this is not just a financial issue, as Ingo Kollosche explains: “The public sector partners with professional providers because it often lacks the technological capacity and expertise to develop and operate complex IT infrastructures. Backend technology, servers and data processing – these are all areas where private providers play a central role.”

For PPPs to be successful in the long run, clear contractual frameworks must be established. Simply integrating private providers into public transport is not enough – they must adhere to specific requirements to ensure that public welfare objectives are not overshadowed by purely economic interests.

As Kollosche emphasises, public authorities have a crucial responsibility: “When a city enters into a partnership, it must clearly define what it needs – be it service areas, fares or data access. Private providers must then decide whether they can meet these requirements. And if they fail to comply, there must be consequences.”

Well-regulated PPPs can drive the mobility transition – but they must be designed in a way that ensures they are not only economically viable but also socially just and sustainable in the long term.