22nd October 2019
Over the last year I’ve been lucky enough to attend a range of transport events, including MOVE, HackTrain, UK Bus Summit and most recently Smartex’s Smart Transport Interactive Masterclass.
I’ve listened to a wide range of representatives from academia, car manufacturers, transport OpCos, tech start-ups, platform, payment and mobility service providers. Many have told compelling and (sometimes very conflicting) stories.
What have I learnt about where smart mobility is heading? What are the challenges in achieving a service based, multimodal transport vision that’s faster, cleaner, cheaper and more accessible than the current offer? Who will be the winners and losers, globally and in the UK?
Here’s my personal view as someone in the middle – who’s trying to create and integrate a better customer experience using these new technologies, for some of the operators who provide the services.
1. When it comes to mobility one size does not fit all
Smart mobility has been a piecemeal process to date, because every urban area has a different challenge in terms of density, legacy infrastructure, public transport network, politics, data access and above all, culture. The choice to use autonomous vehicles vs. public transport can be influenced by personal preferences, as mundane as willingness to walk and the weather. Also, with more than 3500 mobility technology providers currently offering commercial solutions (source: BCG), often there’s simply too much choice to know which horse to back. Consolidation is inevitable.
2. Smart Mobility services are ineffective without the infrastructure, transport management tools and legislation to support them
Smart vehicles, digitally powered mobility platforms, e-ticketing and multimodal travel planning all support better customer experience, but are pointless if the journeys we take remain slow and prone to delay. The challenge of creating and managing an ecosystem where different modes of transport complement each other – rather than increasing congestion – is the bigger challenge for governments and service providers.
For example, the growth in ride hailing services like Uber at the expense of public transport could increase city congestion, because 30% of all ride hail distances currently travelled are “empty” miles. Therefore this shift in patronage needs to be mitigated by an increase in Uber’s ride sharing services and the use of electric autonomous vehicles to reduce vehicle volumes and maintain journey speeds.
To get the best mix of services requires effective sharing and analysis of data, as well as political will and engineering to optimise the available infrastructure for the benefit of one mode over another. For example, the success of Belfast City Transit where bus journey times have improved by 20% and patronage 60%, has been supported by the consolidation of bus stops and the introduction of new routes with dedicated lanes.
3. To be successful smart mobility needs to consider goods as well as people
With a billion more people living in cities by 2030, and with offline and ecommerce growing, freight volumes are projected to grow 40% by 2050. Demand for deliveries is rising too: by 2025, 25% of consumers will expect their deliveries on the same day, or faster (source: McKinsey). Managing this demand will be essential to ensuring the quality of future urban life and reducing congestion. Using drones, electronic delivery vehicles, urban consolidation centres and night deliveries are ways to achieve this and need to be considered alongside personal mobility.
4. The conflict between smart mobility as a business vs. a social right is a risk to the pace of change
Depending on the stakeholder group you represent it’s one, the other or both – but without clarity of vision the customer’s experience will be compromised.
Several examples illustrate this: despite its maturity in cities like London, account based ticketing (ABT) across UK train and bus has been slow to materialise. Whilst there are several technical reasons, there are also commercial ones. One of the pillars of ABT’s vision is that the best fare is automatically selected for the customer and payments are capped. That means operators stand to lose considerable sums from (sub-optimal) tickets that in the past were paid for but unused.
Conversely, Mobility as a Service (MaaS) aggregators such as Whim have less traction in the UK, as their services often cost more than standalone tickets for a bus, tram or train. Contrast this to Helsinki where monthly Whim membership is lower than the equivalent public transport pass. This is because low cost MaaS solutions are mandated and subsidised by local government. Whilst suppliers and modes of transport are set in competition with each other, multimodal mobility solutions will be compromised.
5. If you live in the country, smart mobility means DIY
60% of the world’s population will live in cities by 2030 (source: UN). So it makes sense for mobility solutions to focus on urban areas as they have the biggest challenges with congestion and pollution and will enable more economic growth. Yet, where does that leave the other 40%?
Notably, at the UK Bus Summit, all of the case studies and innovations were focused on cities, to the extent that rural passenger groups took panellists to task about loss of services and lack of innovation. The panel answer was that it’s simply not economically viable for OpCos to offer these mobility solutions in rural areas. They should be created for the community by the community through public-private partnerships and not-for-profit initiatives (the Badenoch And Strathspey Community Transport Company in Aviemore is a good example).
It’s the same story with other mobility solutions – limited rural access to car share schemes, ride hailing and few electric charging points away from home is the reality – because of the small commercial opportunity. All this points to a growing gap in wealth and opportunity between rural and urban areas in the coming years.
6. When it comes to innovation very few can compete with tech giant R&D budgets
The combined annual R&D spend of Amazon and Google is almost $40billion – the size of many countries GDP. Compare this to innovation budgets of thousands to millions for transport OpCos or regional development funds. Between 2016 and 2018 Google filed over 200 patents and spent billions in shared mobility, ride hailing and logistics with its investments in Lime, Go-Jek and JD.com. Alphabet’s autonomous arm Waymo is a global leader and recently launched a commercial self-driving fleet service in Phoenix, Arizona. In other words it has a finger in every mobility pie – not to mention the ubiquitous Google Maps, which is the go-to source for journey planning and now includes a multi-modal capability in the USA.
7. Everyone talks about open data, but not everyone’s on a level playing field or wants to share
Most parties seem to agree that open data about travellers, congestion, fares and transport services is the key ingredient in the smart mobility vision. At a local and industry level great strides have and are being made, with programmes such as the Transport Data Initiative (TDI), the Joint Rail Data Action Plan and the Open Bus Data programme, making public transport journey planning information an easier task for travellers.
However, whilst valuable, most of the initiatives tend to focus on a single transport mode or a local basis and don’t address the broader issues of how to combine these data sources with car parking, traffic congestion, ride hailing, walking and other options to provide a 360 degree transport management view. In some cases these providers have their own open data programmes, in some cases they are yet to materialise.
Of course there are companies that offer, or partly offer, these services already: in the USA, Google now offers multimodal journey options, including ride sharing and bikes combined with public transport. Uber has recently extended its services to include public transport information in London and allows single purchase of rides and trains through its apps in cities like Denver. However, whilst in both cases transport companies are making data on their services available to these platforms, they don’t have access to the huge pool of customer behavioural insight that’s being gathered. With Google and Uber looking to become transport marketplaces this knowledge ultimately means power.
The delivery of the smart mobility vision is a huge challenge, which can’t be solved by individual organisations or even industries that have conflicting interests, commercial goals and different levels of sunk investment. The solutions they offer will always prioritise their mode of transport, brand, technology – plus protect their data to maintain control and maximise profit. Specific solutions or small alliances can and have worked in certain localities, but not across the board and local solutions aren’t always replicable and can leave other regions behind.
If the common view is that smart mobility should be a public right, which enables workforces, democratises opportunity, improves standards of living and combats climate change, then it needs to be socially engineered. That means much greater government direction, investment and legislation to adjudicate these competing interests and provide focus.
If this doesn’t happen soon then it will be the players with the deepest pockets, plus the greatest customer reach, advocacy and access to data that will rule the smart mobility market in 15-20 years time. In the current climate look no further than the big tech giants like Google to be at the forefront of that charge, ahead of car manufacturers or public transport providers. Greater collaboration and pooling of resources by public transport OpCos is one way to combat this, but needs to be combined with a more product mindset and agile way of working.