If Mobileye’s and Moovit’s plans move forward like the companies want, within a few years our travel experience is going to look something like this: You’ll open your Moovit app, where you’ll be offered a range of travel options, such as train, bus or electric scooter. Side by side, you’ll also see which of a fleet of self-driving cars – using Mobileye technology – are nearby and can take you to your destination.
The Israeli startup’s system will enable Mobileye vehicles to be allocated intelligently across a city according to local supply and demand. A vehicle with room for 12 riders will be dispatched to a high-demand location while a smaller one will be sent to where demand is less.
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It sounds no less than fantastic, especially measured against the state of public transportation in Israel today. But that’s the logic behind the announcement on Monday by Intel, Mobileye’s parent company, to fork over more than $900 million to buy Moovit – $840 million to buy the business and another $100 million for its employees to coax them into staying on.
Moovit offers a popular app that lets users get real-time information such as arrival times and routes of public transportation and other alternatives. But what really interests Intel and Mobileye is Moovit’s giant database of people’s travel behavior. It’s an invaluable resource for Mobileye as it embarks on its vision of autonomous travel services.
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“The acquisition of Moovit was undertaken after we realized that in order to develop new urban travel solutions we need to be able to measure the supply and demand balance in the city and know who is operating what transportation,” Erez Dagan, Mobileye’s executive vice president for products and strategy, told TheMarker in an interview.
“Mobileye is developing advanced technology for cars to take people from place to place. They need to know where the users are and their commuting habits,” added Nir Erez, Moovit’s CEO and one of its founders. “It has to be an economical, sophisticated process of planning the routes these vehicles will travel. Mass transit won’t go away, trains carrying 900 people will not be replaced by cars, but the connection between mass transit and autonomous vehicles is critical.”
Mobileye, which wants to become an automated transportation service provider and not just the supplier of the underlying technology, is working on several pilot projects for autonomous taxis in several places around the world, including Tel Aviv, together with Volkswagen.
“The timetable for commencing operations in 2022 hasn’t changed,” said Dagan. “Our partnership with Volkswagen in Tel Aviv still needs to choose a supplier for information and ride-booking elements, but it’s easy to guess that the choice will be more obvious, given our tie-up with Moovit.”
Added Erez: “We’re already working with on-demand transport services, only today the car has a driver. The opportunity we have here is to replace the driver – the cost of operating a driverless car drops by 60% to 70%. This will facilitate the transition to autonomous vehicles.”
Self-driving cars are still a distant dream and the coronavirus crisis is adding to uncertainty. Aren’t Mobileye and Moovit taking a big risk?
Dagan: “The future of autonomous vehicles isn’t hypothetical. The social value they give is unarguable. There’s no question it will come. The current crisis is winnowing out less resilient players and our position is actually being strengthened.”
Erez: “In our conversation with [Mobileye CEO] Amnon Shashua and Intel CEO Bob Swan we saw that Intel is committed to the long term. The coronavirus came and hopefully it will go.”
Moovit is based on data that comes from users and volunteers, as well as from local authorities and governments. After Waze was bought by Google, its volunteers asked for a share of the proceeds. Do you expect the same thing?
Erez: “Moovit owns all the information it uses. When we started, only a small number of cities had digitized transportation data. We built it for them from zero.
“We own the biggest public transportation database in the world. Look at it the other way: The cities value the work we’ve done, and that the communities do. Regarding Waze, we started after them and we share the same law firm. The entire community knew that the data wasn’t open and that it belongs to Moovit, so we avoided that mistake.”
The Moovit app is today used by some 800 million registered users, with tens of millions of active users every month. The company promises that the app will continue to be available under the same brand. In addition, Moovit is collaborating in Israel with the Pango parking app and Bank Hapoalim to bid on a contract to provide an app for payment for public transportation. That partnership will also continue.
How will the acquisition affect Moovit?
Erez: “The company will remain independent just like Mobileye is independent inside Intel. We received approval for our plans for continued grown and expansion. Our employees understand that they will stay on – were not even replacing their contracts – and the sense of security is strong. We’re still operating from [headquarters] in Nes Tziona and there are no plans to change that. The only one who’s getting a new title is me, as vice president at Mobileye and Intel.”
You’ve also said you will be continuing existing partnerships, but one of them is with Uber, a direct competitor of Mobileye in autonomous vehicles. What’s the future of that?
Dagan: “Moovit’s position in the market as a service supplier is important and will be maintained at all costs. Mobileye operates in the market as a competitor and a collaborator … We’re adding a product that we’ve built especially for autonomous solutions. Our vision is broad: to create a network of collaboration.”
About its carpool service with Waze, Erez said: “The carpool service remains operative and we aren’t making any changes.”