Costs, control, & customization: comparing in-house and third-party software for shared mobility

21. July 2023 Reading time: 8 minutes

This choice can significantly impact the efficiency, profitability, and overall success of your operations - let's discuss the pros and cons of each option

All shared mobility operators find themselves at a critical impasse when it comes to developing software solutions: should they build in-house or rely on third-party software providers? It’s the age-old question: to build or to buy? This choice can significantly impact the efficiency, profitability, and overall success of your operations – regardless of whether you’re a micromobility operator, multi-modal operator or managing a corporate vehicle sharing program.

As a software provider to organizations of all shapes and sizes, we’ve helped shared mobility operators in making this kind of decision before. And it’s true, in some cases in-house efforts may make more sense for a business than partnering with a third-party provider. But for those operators with complex use cases and ambitious fleet growth goals, external software can be an irreplaceable element of your success story.

Read along as we offer our perspective and advice in helping you navigate the decision-making process and determine whether in-house development or partnering with a third-party software provider is the better fit for your organization.

In-house software development

Tailored solutions and control

Building software in-house allows shared mobility operators to create customized solutions that align precisely with their unique requirements. This level of control enables operators to design and incorporate features specific to their service offerings, such as pricing models applicable to the operator’s specific use cases, branded user interfaces, and any specialized fleet management capabilities.

Of course, it should also be noted that with a flexible software provider, you would still have the option to integrate your own brand into the user experience. For example, the goUrban white-label app offers operators the ability to add and modify the end-user application with their own brand identity and language requirements.

Intellectual property and data security

By developing software internally, shared mobility operators retain ownership and control over their intellectual property, including proprietary algorithms and operational data. This reduces the risks associated with sharing sensitive information with external parties. In-house development also allows for the implementation of robust security measures, ensuring data protection, privacy, and compliance with regulations, which is particularly vital in an industry dealing with sensitive customer data such as payment information.

But we’d be remiss not to mention that any worthy software provider also takes your data security extremely seriously. We have a team dedicated to keeping our software up-to-date and secure, which includes regularly releasing updates and patches to address vulnerabilities and emerging threats. Whereas in-house software, you might not be able to prioritize regular updates due to other business demands, leaving your system exposed to potential security breaches, with a software provider like goUrban you’ll have professional security advocates with you every step of the way.

Long-term cost efficiency and scalability

While in-house software development requires upfront investments in infrastructure, talent acquisition, and ongoing maintenance, it can prove to be cost-effective in the long run for shared mobility operators. Additionally, an in-house development team can adapt the software to accommodate changing needs of the shared mobility service without relying on external parties.

Should you pursue in-house software development for your shared mobility operations?

When done right, developing software in-house has many advantages that can ultimately prove to be the most fruitful choice for your organization. But the “done right” element needs to be examined closely.

Here are just a few of the many things your team will need if they want to experience long-term success with in-house software:

  • Comprehensive market research and analysis to identify unique business requirements and challenges
  • Establishment of a dedicated in-house software development team with expertise in various domains, including backend, frontend, UX/UI design, data analytics, and quality assurance
  • Robust project management capabilities to coordinate software development activities, set clear goals, and ensure timely delivery
  • Adequate financial resources to invest in software development, including personnel, infrastructure, tools, and ongoing maintenance
  • Implementation of robust security measures to protect user data, prevent unauthorized access, and mitigate potential cyber threats
  • Regular software updates and feature enhancements to stay competitive in the rapidly evolving shared mobility market

It is essential to not underestimate the time, expertise and expense that is required should you choose to pursue the development and maintenance of in-house mobility software. As you scale your service offering, the demands on your internal teams will grow exponentially and being unprepared to handle sudden volume changes could lead to service outages that damage not only your reputation with customers but also your bottom line.

Now let’s take a look at what awaits shared mobility operators who opt to partner with an external software provider to manage their fleets.

Third-party software provider

Outsourcing your software development to a third-party provider offers several key advantages to your organization, beginning with the external expertise you’ll gain from a team of mobility experts who have seen it all before. In some cases, you can even gain a community out of your partnership.

For instance, we run quarterly events that bring together operators, local government representatives and other stakeholders to discuss emerging trends and strategize on industry challenges. If you’re considering a third-party software provider be sure to enquire about how they can eventually connect you to others in the mobility space – these relationships can be very fruitful.

goUrban’s Mobility Meetup at Climate Lab in Vienna, Austria

Specialized expertise and time-to-market

Partnering with a dedicated software provider like goUrban grants shared mobility operators access to a wealth of industry expertise and knowledge. Providers like us have teams with a deep understanding of shared mobility technologies, best practices, and emerging trends. Leveraging our specialized expertise can significantly reduce development time and if you’re just starting out, accelerate time-to-market, ensuring that you can quickly launch or scale your services quickly not to mention leverage new features to stay ahead of the competition.

Scalability and flexibility

Outsourcing software development provides shared mobility operators with the flexibility to scale their operations efficiently. Third-party providers are equipped to handle projects of varying sizes, allowing operators to tap into additional resources during periods of high demand or when expanding into new markets. Moreover, by entrusting software development to external specialists, operators can focus on their core competencies while delegating non-core activities to experts who can handle them more efficiently.

Cost savings and risk mitigation

Choosing a third-party software provider can often be a cost-effective solution for shared mobility operators, especially for those with limited resources. Outsourcing eliminates the need for substantial upfront investments in infrastructure and dedicated development teams. It also reduces operational costs by transferring the responsibility for maintenance, updates, and support to the provider.

Additionally, it’s also possible to mitigate the risks associated with software development, such as service delays, outages and other such disruptions, as your provider would take on these responsibilities, allowing you to focus on delivering excellent service to your end-users instead.

Building or buying: which is right for your organization?

For shared mobility operators, the decision of whether to build software in-house or partner with a third-party software provider requires careful evaluation. There’s no one size fits all approach for a decision like this.

While in-house development provides tailored solutions, control, and data security there is a heavy upfront investment required and ongoing maintenance costs which as we’ve said, can’t be underestimated. Instead, outsourcing to third-party providers can offer operators specialized expertise, easier scalability, cost savings, and risk mitigation, but may limit some customization and control – however these can also be reduced or avoided altogether by selecting the right partner. For example, goUrban has developed dedicated APIs for different use cases so operators are not limited to only 3rd party resources. Many of our clients are using these APIs to build on top of our comprehensive solution features and functions that are unique to their operation, to make their overall service offering even more complete.

To make an informed decision, shared mobility operators should consider factors such as the complexity of their software needs, long-term business goals, and their current and future available resources. There’s also always the option to explore a hybrid approach that combines in-house development for some core functionalities with third-party solutions for non-core activities. At goUrban, we work with operators to help them evaluate which of our services best fit into their operational needs. If you’re leaning towards onboarding a software provider, be sure to assess them using a thorough list of basic requirements.

Ultimately, whichever path you choose must align your specific needs to ensure efficiency, profitability, and a seamless end-user experience in the rapidly evolving landscape of shared mobility services.