Stakeholders throughout the transportation industry face fundamental disruptions as vehicle ownership yields to as-needed mobility.
Mobility has been the lifeblood of modern civilization. Throughout the 20th century, autos and the auto industry propelled human development, bringing unrivaled utility and flexibility to the way people move. The automobile forever altered urban and suburban landscapes, and the auto industry emerged as one of the largest sectors of the world economy. Yet the industry — which survived the Great Depression, two world wars, and a two-peaked oil “crisis” — now faces fundamental disruption.
Relentless urbanization has left many cities with crippling congestion and unhealthy air pollution, and cars are wearing out their welcome in most. Modern urbanites, weaned on omnipresent connectivity, have also altered their patterns of living: Vehicle ownership is yielding to mobility accessibility as expectations and aspirations change. These trends have led a growing number of thought leaders both within and outside the auto industry to assert that radical transformation is imminent. Nissan’s Europe chairman, Paul Willcox, worries that automakers are facing “a decade of disruption.”1
We postulate that urban mobility is transforming to a connected, heterogeneous, intelligent, and personalized architecture (CHIP). A CHIP mobility architecture makes room for automakers, technologists, city planners, and entrepreneurs to innovate and proliferate new travel modes and solutions, enhancing variety, options, and utility for users. CHIP mobility leverages the power of networked systems based on connections linking physical infrastructure with digital tools to reduce travel cost, time, and effort. Intelligent systems that can access data on user preferences, traffic congestion, prices, and weather, for example, will help promote efficiency and deliver personalized user experiences. Mobility can be delivered as a service — available on tap to suit the consumer’s need at the time. Nations and cities can shape their unique architectures through investments, policies, incentives, and fees, aligning their mobility portfolios to societal objectives.
The Winds of Change
An Urban Century
At the dawn of the 20th century, one in every six people lived in an urban location. By the end of that century, one of every two was an urbanite. And by 2050, it’s projected that as many people will live in urban areas as there were people on the planet in 2015.2
Cities are emerging as economic powerhouses and pushing their own social and environmental agendas. By 2015, urban dwellers, estimated at about 55% of the global population, contributed 85% of global GDP.3 Reflecting this economic clout and impatience with slow-moving national initiatives, Michael Bloomberg, the former mayor of New York City, says, “[Mayors] don’t have to wait for national governments or a new global climate agreement to act. They can take action today — and increasingly, they are.”4
Although urban form and mobility architectures usually have a symbiotic relationship, increasing population density has rendered most current urban mobility architectures dysfunctional. Congestion is estimated to cost local economies from about 1.5% of GDP in London to as much as 15% in Beijing.5 While a high-population-density city such as Tokyo allocates about 15% of urban land to roads, typical U.S. cities allocate between 30% and 40%.6 Cities such as Los Angeles and Beijing are discovering that building new roads and increasing highway capacity just attract more vehicles and are not solutions to eliminating congestion.
Enrique Peñalosa, a former mayor of Bogotá, Colombia, cautions that “urban mobility is peculiar and is different from other urban challenges like education or housing — it tends to get worse as societies become richer.”7 The global built-up area in cities is expected to triple in the first three decades of this century, fueled especially by those in fast-growing, emerging economies.8 In many of these regions, rising affluence and aspirations, coupled with delayed spending on transit infrastructure, result in rapid increases in the population of personal vehicles. In such cities, the mandate must be to invest more aggressively in the fundamental building blocks of a sustainable city — safe pedestrian sidewalks and crosswalks, with improved connectivity to efficient mass transit — instead of building more and more roads, flyovers, and highways.
Fortunately, a growing number of communities across the globe, ranging from Singapore to Barcelona to New York City, are investing in “smart cities” in which information and communication technology infrastructures dovetail very well with future mobility architectures. Compact urban forms, with mixed-use pedestrian- and bicycle-friendly neighborhoods supported by efficient public transit, dotted with green spaces, are topologies that conform to new urbanism principles and support efficient, connected, and eco-friendly mobility. New York City, with many of these elements, has a lower per capita ecological footprint than San Francisco, in spite of New York’s higher per capita income and colder climate.9 Los Angeles, on the other hand, with an auto-dependent, highway-intensive urban sprawl that spans 4,850 square miles, heads the list of U.S. cities with the worst traffic congestion and air pollution. Cities that are embarking on “smart city” investments have a timely opportunity to steer their trajectory toward more livable communities and more sustainable mobility.
Cleaner Air to Breathe
Transportation accounts for almost two-thirds of all crude oil consumed.10 Based on current trends, global transportation energy demand will grow by almost 50% by 2040 compared with 2012.11 In 2016, the World Meteorological Organization warned that 92% of the global population is exposed to unhealthy air.12 Just the adverse consequences of unhealthy air quality, impact to the environment, congestion, traffic fatalities, and fuel subsidies to support motorization are estimated to account for 6% to 10% of global GDP.13 Furthermore, the projections of climate-change impacts from burning more and more oil to power the needs of our economies suggest ecosystem tragedy on an unprecedented global scale over the next century.
For over four decades, automakers, pushed by regulatory bodies, have been addressing the dual issues of fuel efficiency and vehicular emissions. Yet the rapidly growing car population has overwhelmed these advances. By 2016, there were more than 1.1 billion cars on the planet — almost as many as the number of people who inhabited the planet when Karl Benz invented the automobile. Even though California has the toughest emission standards in the United States, Los Angeles is plagued with the worst air quality among large U.S. cities. Similarly, France has some of the toughest standards in Europe, yet Paris is obliged to impose restrictions on vehicle use in city center areas to mitigate air pollution. As much as we can be proud of the progress made, we are still moving too slowly to avert further adverse consequences.
Changing Cultures and Attitudes to Mobility
Since the new millennium, society’s unique love affair with automobiles has shown signs of weariness. Even as emerging economies are rushing headlong toward motorization, the fraction of the population that are registered drivers is shrinking in most industrialized nations, and levels of car ownership are declining.14 These trends are fueled by several factors.
Between 1950 and 2014, the cost of the median automobile in the United States climbed from 45% to 60% of a family’s annual income. Yet, the average car, retailing in the United States for about $33,000, is typically used for less than 4% of its lifetime.15 The idling of such an expensive asset makes poor economic sense. Costs for registering and operating a car have also climbed. In Japan, where many cities manage high population densities and car ownership is notoriously expensive, travel by personal car declined by almost a quarter between 1990 and 2010.16 Besides economics, personal vehicle ownership and use is declining for other reasons. In many communities, smartphones — not personal vehicles — have become the “must-have” device and serve as the primary gateway to mobility and human interaction. Many urbanites now prefer to be a user of services rather than an owner of assets when it comes to automobiles.
“Mobility as a service” represents a paradigm shift. Thanks to entrepreneurship, smartphone apps, and ubiquitous connectivity, the sharing economy has blossomed, delivering a world where one can share a weekend villa through Airbnb, rent an evening dress from Rentez-Vous, and, yes, borrow a car from Turo. A variety of solutions including UberPOOL and BlaBlaCar promote ride sharing, helping to save money and carbon emissions. Car sharing through short-term rentals, by the hour or just for the ride, are offered by Zipcar, car2go, DriveNow, and their peers. Smartphone-equipped netizens in emerging economies like China and India are also climbing aboard this platform almost as quickly as those in car-saturated economies.
These trends are rapidly converging into a disruptive storm poised to transform traditional mobility. The auto industry accounts for annual revenues of more than $3.5 trillion — if the auto industry were a nation, it would rank fourth in GDP.17 The extended industry offers employment to more than 50 million people.18 But to thrive in the new environment, it will need to radically transform its raison d’être. Ford Motor Co.’s chairman, Bill Ford, is vocal about the need for the auto industry to change perspective, stating, “ensuring the freedom of mobility requires us to continually look beyond the needs of today and interpret what mobility will mean to future generations.”19
The Innovation Response
Invention and adaptation are key to human evolution. Therefore, it is no surprise that innovation, entrepreneurship, and enlightened public administration underpin our proposal for CHIP mobility systems.
Heterogeneity: A Smorgasbord of Modes and Solutions
Cars used to be the quickest and most convenient mode of travel. In many cities, this is no longer true. City administrators are increasingly seeing value in the growing variety of modes that can be rendered attractive and efficient for users. When these modes are effectively connected and networked, their utility is further magnified.
The Chinese philosopher Laozi, a contemporary of Confucius, observed that “a journey of a thousand miles starts with a single step.” Indeed, residents of London, Tokyo, and New York may undertake a journey to the opposite hemisphere with a short walk to the nearest subway station. Some cities, including Seoul, South Korea, and Boulder, Colorado, are building attractive pedestrian walkways out of disused railway corridors, turning once-neglected areas into vibrant places for human activity. Fully 24% of commuters in London walk to work, while 45% do so in Hong Kong. Fitbits and other wearable health monitors, as well as pedestrian-oriented navigation apps like Walc, further promote interest in walking and a healthier lifestyle. Furthermore, safe, convenient walking infrastructure promotes use of public transit when pedestrian connectivity is designed into the system.
The term “Copenhagenize” is used to denote a community that has effectively inducted bicycles into its mobility architecture. Over 45% of Copenhagen’s commuters bike to their destinations. The Danish capital has adopted a goal of carbon neutrality by 2025 and estimates that the city saves 23 cents for every bike kilometer and loses 16 cents for every car kilometer.20 In Europe, over 50% of trips are less than 5 kilometers. Consequently, in the short time since the introduction of bike-sharing services, bicycle use in London has doubled, while in Paris they have contributed to a drop in vehicle ownership by residents.21
Travel over longer distances demands other solutions. In cities such as London, Paris, and Rome, a growing number of motorcycles and motor scooters are used not only by students and young adults but also by bankers, lawyers, and other professionals. Traveling between gridlocked lanes and exploiting authorized use of restricted bus lanes earn them faster commutes — and they enjoy more flexible parking options. Anticipating customer desires for smaller vehicle footprints, some automakers are experimenting with two-seater microcars, such as Renault’s Twizy and Toyota Motor Corp.’s i-Road in some European cities. Typically, these vehicles are electric-powered and zero-emission and employ most of the modern e-connectivity features used in traditional cars. Autonomous microcar concepts such as the LUTZ Pathfinder, developed by the U.K. government and UK-based RDM Group, and the EN-V, developed by General Motors Corp. and Segway Inc., are being evaluated to serve shared fleets for cities of the future.
While shrinking a vehicle’s footprint can lower the impact of personal mobility, an alternative is to share vehicles among users. Globally, almost 80% of all transit commuters use a bus.22 Yet buses are typically not “sexy” and have been poorly leveraged. Modern renditions employ advanced vehicular technologies, including zero-emission propulsion, semi-autonomous driving, and Wi-Fi connectivity. Bus systems are being reimagined with Bus Rapid Transit (BRT) corridors mimicking metros, offering restricted-access lanes with priority right of way at traffic lights, stations with turnstiles and contactless card-based fare payment, and facilities designed for rapid ingress and egress. Compared to metros, buses can serve as a much lower investment option with improved flexibility. Curitiba, the capital of Brazil’s Paraná state, has successfully deployed BRT transit and has seen vehicular traffic on its streets decline by 30% since 1975, even as its population has doubled.23 Many U.S. cities including Boston, Los Angeles, Cleveland, and Seattle have benefited from investments in BRT corridors. In Seattle, bus ridership has grown at twice the rate of the population since 2002, and, through continued improvements, the city aims to reduce the percent of single-occupant vehicles on streets from 30% to 25%.24 Some cities, such as Helsinki and Singapore, have begun to deploy driverless eight-to 10-seater shuttles, opening the door to another dimension of innovation, utility, and efficiency.25
Higher-density corridors may employ light rail systems. Zurich, Switzerland, an affluent city with a population of about 300,000, has an effective system of light rail and buses that helps limit the level of personal car use to less than 30% for local trips. In contrast, Coventry in the U.K., with a similar population, lacks an equivalent mass transit system, resulting in personal car use for 75% of local trips.26
For cities that must manage very-high-density corridors for movement of people, few solutions match the space and energy efficiency of metros or subways. Hong Kong’s metro system is often benchmarked for scale, efficiency, and profitability. The systems in Tokyo, London, Singapore, and New York are highly utilized and effective. In 2015, China announced that it was doubling the length of metros in 23 cities. India is similarly constructing metros in 12 major cities.
A Connected Mobility Network
CHIP mobility architectures, like the internet, depend on a network for connectivity. Connectivity may be provided by physical infrastructure, such as the numerous routes from origin to destination, combined with transit hubs that allow the user to switch modes, such as a bike-share station located at a subway station.
Complementing physical connectivity, digital connectivity enables travelers to employ apps to assess and choose among various travel routes and modes. For such users, “mobility-on-tap” is the expectation. Even more impressive changes are possible when the benefits of connectivity are extended to the whole mobility system. A digitally connected traveler, for example, can plan a journey and then hail and pay for an Uber car with a single smartphone app. Car2go allows travelers to pick up a car in the vicinity and drop it off at their destination, not necessarily at a designated drop-off point. Turo’s peer-to-peer business model offers a renter the use of a fellow member’s car when that member has no use for the car. UberPOOL and BlaBlaCar use the power of smartphone apps and connectivity to allow two or more people to share a ride across town or even for weekend trips. Chariot Transit Inc. in San Francisco uses 10- to 15-seat vans that complement public transit with crowdsourced stops and routes determined by users. Mobility Mixx B.V. in the Netherlands offers a mobility card that bundles a range of mobility modes, from bicycles to public transport, taxis, and personal cars. The user has the option to use public transit for the daily commute, borrow a limousine for an important client meeting, and use a sporty convertible for a weekend escape to the beach.
These companies rely on (1) improving asset utilization; (2) sharing a journey among multiple users; and (3) promoting the use of the appropriate tool for the task. Much like a sculptor chips away extraneous material to the final form, these options seek to chip away wasted assets and resources.
Physical and digital connectivity both play important roles in generating efficiencies — they allow a traveler to link individual segments of a journey rather than undertaking the journey with a single compromise solution. However, travelers will be motivated to choose a journey with multiple connections only when the effort, cost, and time needed to make the connections are low. Hence, investments in both physical infrastructure connectivity and digital connectivity are vital.
A mobility system enhanced with heterogeneity of innovative transport modes, networked with physical and digital connectivity, generates a bewildering array of options for a user. Furthermore, each journey may involve one or more modes with connections along the route. The important task is to sort through the large volume of data of the various modes and their profiles and seek to match them, in real time, with the user’s preferences. Artificial intelligence systems are ideally suited to tackle this. These “robo-advisers” can recommend a few relevant options from the universe of mobility solutions that are available, seeking to maximize what John Hagel, co-chairman of Deloitte’s Center for the Edge, calls “return on mobility.”27 The return-on-mobility approach recognizes that any journey contributes value to the traveler, not only in getting to the destination but also in the experience along the way.
Each journey and each mode has its own unique signature of expense, stress, duration, level of convenience, ambience, degree of privacy, carbon emissions, and so on. Similarly, the traveler may have unique expectations and preferences for each journey. A Monday morning commute may call for different priorities than a weekend camping trip. Each user seeks to balance and optimize the associated rewards and costs. By 2016, several apps such as Citymapper and Daimler AG’s moovel were becoming available in Europe and the United States to offer some of this capability. They are as easy to use as the modern mapping tools we have become dependent upon, and they’re growing in utility each year.
CHIP Mobility: Characteristics
We have positioned CHIP mobility as an architecture and not as a particular solution. (See “The CHIP Mobility Framework.”) Given the diversity of cities and individuals, there can be no single “winning solution.” Rather, the architectural concept is pragmatic and flexible — it can be molded to suit various geographies and budgets, emphasizing those modes and technologies that offer local advantage. The sprawl of Los Angeles will require solutions different from those of compact Hong Kong. Singapore can deploy new systems more quickly than New York, which may need more time and effort to attract and mobilize popular support. Mumbai commuters may ill-afford solutions that make sense in London.
For any society, mobility needs to be inclusive — accessible to all segments of the population. The wide variety of modes embraced by CHIP mobility ensures that low-cost modes coexist with more expensive ones. Mobility architectures make extensive use of public spaces and assets and have economic and environmental consequences that affect entire communities. Hence local CHIP implementations must be guided by a combination of locally developed policies, regulations, investments, fees, and incentives to ensure appropriate alignment with societal goals. Accomplishing these goals will require engagement of public and private capital and will necessitate a blurring of the divide between public, shared, and private modes. Even as freedom of choice is preserved with variety, a combination of incentives and fees should ensure that each user pays a fair share of the cost of their chosen mobility solution.
The CHIP architecture is also dynamic. Like the internet, the architecture relies on redundant routes and modes and encourages entrepreneurship to conjure new solutions. The redundancies will also ensure that ineffective modes and solutions may be replaced as necessary. In each setting, the CHIP architecture must evolve through fluid adaptations, fostering innovation and experimentation.
The CHIP architecture promotes greener mobility through fair pricing modes based on impact to air quality, as well as use of energy, space, and public assets. It depends on policies to steer how people choose and use mobility. Fiscal penalties, such as the congestion fees imposed in London, or nonfiscal incentives, such as the privileged use of high-occupancy lanes for zero-emission vehicles, illustrate possible productive interplay between a physical mobility architecture and appropriate governing policies.
CHIP Architecture: Call for Action
The CHIP mobility architecture will require the auto industry to transform itself. Ian Robertson, a senior BMW leader, agrees that “the next 10 years are probably going to involve more change and more dynamics than we have seen in the last century.”28 Some automakers are already working on the larger canvas. BMW, Daimler, and Ford, for example, have started making investments well beyond the core of the auto industry. They have acquired stakes in businesses related to short-term rentals like car2go, app-hailed car services like Ride Now, app-hailed vanpools like Chariot, peer-to-peer car sharing such as Getaround, intercity bus services like FlixBus, apps for navigation and map data such as Here We Go, apps that assist drivers with parking such as JustPark, and even mobility robo-advisers such as moovel.
Traditional automakers now face competition from a formidable quarter — tech giants such as Google, Apple, Microsoft, Tencent, and Baidu. The convergence of technologies within consumer electronics and cars has driven both business sectors to covet preferential access to today’s digitally connected consumers. Google’s and Apple’s interests in autonomous driving and ride sharing are evidence of how they see their future role in mobility. As with smartphones, tech companies would presumably be delighted with a future scenario in which automakers provide low-value-added hardware platforms, leaving the tech giants the lion’s share of profits from services and value created by data and analytics. Automakers would likely prefer a different allocation of the profit pie.
Governments around the world have been actively involved in creating new highway infrastructure to increase productivity and economic growth. As urbanization increases, city administrations are called upon to develop and operate a broader set of levers including investments, policies, fiscal incentives, and levies to steer a sustainable and beneficial course for intracity commutes. Automakers that have traditionally been wary of inviting government involvement in transportation have come to recognize the contributions cities can make. According to Carlos Ghosn, chairman of the Renault-Nissan-Mitsubishi alliance: “The biggest transformations will not take place inside our vehicles, or even inside our companies. Rather, they will take place on the stage of the world’s cities. Cities are facing challenges that could be solved, in part, by mobility solutions. To align technology, policy, and planning, automakers and cities must work as partners.”29
As city administrations formulate sound policies to steer the trajectory of mobility along paths aligned to societal priorities, they will find that the CHIP architecture weaves the concepts of connectivity, heterogeneity, intelligence, and personalization into a tapestry to deliver mobility that is faster, smarter, and greener.