Four Ways Mobility Startups Can Accelerate Public-Private Partnerships

Feb 26, 2020

Private companies and government players need each other to navigate the heavily regulated industry of mobility, whether it’s to introduce new automotive models, fund transportation infrastructure or launch new initiatives. A Deloitte report found that just 16% of public infrastructure projects are able to self-fund. Meanwhile, private companies benefit from municipal support for real-world pilots and projects that add credibility and attract investment, partners, and customers.

Yet, public agencies and private companies often butt heads. Uber, for example, clashed with the Los Angeles Department of Transportation (LADOT) over municipal regulations on sharing location data. To LADOT, sharing that data would mean better and safer mobility infrastructure. But to private companies, it risks jeopardizing valuable assets and user privacy. Such friction slows much-needed progress and closes doors on opportunities.

As in any collaboration, public-private partnerships (PPPs) require compromise and a flexible mindset. To work, each side must recognize the beliefs, policies and goals of the other. The following guidelines can help mobility startups and their public partners see eye to eye.

1. Seek Public Partners Whose Goals Align With Yours

Public agencies must answer to constituents, and thus, all PPPs must align with a government’s obligations. Mobility startups can smooth the partnership process by learning what potential public partners want. Due diligence into a prospective government partner’s goals will guide startups toward ideal collaborations. On the startup side, this may mean even adjusting their offering to suit a municipality’s policies or values in order to increase the chances of a partnership.

Current events shape government priorities. For instance, with climate change and urbanization on the rise, public pressure is on to develop smart and environmentally conscious mobility systems. A growing number of cities, including Madrid, Paris and Oslo, have announced strict reductions for the number of private cars allowed on their streets. Mobility startups that can facilitate the shift to public transportation or smart city infrastructure will be desirable partners, but other mobility startups can also be attractive if they’re willing to switch focus to address potential partners’ needs and provide value. Conversely, public agencies of municipalities should seek out private partners willing to prioritize their needs.

2. Get Creative About Financing

Alongside voters’ sentiments, the other major factor driving government decisions is the availability of funds. Facing tightening budgets, public agencies are often receptive to well-funded startups able to finance a PPP. Private companies, startups and enterprises alike have more available funds and creative ways to finance such projects upfront and are looking for that healthy return on investment or testbed to live-test their technology.

Energy Service Companies (ESCOs) show how the private sector can ease budgetary concerns for municipalities that lack the initial capital needed to retrofit facilities for energy efficiency. If the company can prove that the city will see a significant return on investment, governments may agree to divvy up savings in exchange for private cooperation and support.

But, making such a PPP work requires the goals and priorities of public and private players to align and maintain a creative mindset on both ends. There must be the promise of an ideological, as well as a financial, return.

3. Think Small, Not Big

Many startups desire partnerships with major municipalities for access to the large transit systems, big budgets and prestige they bring. Yet, big cities also mean more competition, making it harder for startups to win bids and lessening the need for governments to roll out incentives to attract companies. Smaller municipalities looking to make a name for themselves, though, are often willing to incentivize innovation. This presents savvy private partners with myriad benefits. For example, the city of Gainesville, Florida (population 132,000), has partnered with the University of Florida and Transdev on a three-year, $2.7 million, free autonomous shuttle project.

Size is equally important with regards to the scale of the project, not only the partner’s size. According to a World Bank report, large-scale “marquee” projects aren’t necessarily as impactful as smaller ones, which are just as vital. The report imagines a world in which people can zip to their destination on a new highway, only to arrive in a dirty, dangerous neighborhood because necessities like waste management, public safety, and street maintenance were neglected. Startups shouldn’t be afraid to “think small” when it comes to improving everyday life.

4. Seek A Gap In The Market

If you see an oversaturation in the products provided to the public sector, go in the opposite direction.

For example, extended periods of snow, rain and ice make winter ground delivery difficult in Reykjavik by slowing down services or blocking entire routes. While many companies focused on ground deliveries, drone delivery startup Flytrex thought differently. It asked, “Why not take to the skies?” This is a novel idea that won them a partnership with ICETRA (the Icelandic transport authority).

In our case, we noticed that a huge majority of the data currently used to power autonomous vehicles and survey road conditions is visual. We saw an endless number of startups focused on visual perception capabilities. And even with all this visual data, it’s still not enough to make automated driving a reality. Our solution was to turn to tactile data to offer another dimension of understanding of the road. Because this insight can apply to all different types of mobility, it opened us up to a wide array of potential public partners.

When private and public companies are pragmatic about their goals and values, open-minded about solutions, and prepared to seek realistic partners, they can implement successful PPPs. Such partnerships not only add credibility and generate financial value for both ends, but they also have a genuine impact on society — by improving vital infrastructure. But this public impact isn’t possible without working sincerely together. By collaborating, we can achieve more together than we can alone, especially when it comes to developing mobility systems that are safer, smarter and more sustainable.