What is the Future of Mobility?

A Tale of Three Cities

By Philipp von Hagen May 18th, 2018

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— Today, most answers focus on electric and self-driving vehicles. These are undoubtedly characteristic of the ongoing developments in mobility, but really are only one dimension when it comes to answering this more astute question.

By taking a broader and holistic perspective, it becomes evident that mobility is a multi-layered issue. Not only does mobility include fulfilment means (cars, trains, bicycles), but also the broader public infrastructural elements (roads, bridges, tunnels) as well as a third dimension, us – the users who want safe, reliable, affordable and efficient mobility solutions. 


If you look at it from the automakers’ perspective today, many are going for the obvious answers: improving their existing means of transportation at low cost and adapting them for future mobility requirements such as self-driving, vehicle electrification and enhanced connectivity.


These are undoubtedly important to the future of mobility. But we also see, for example, new business models emerging such as Mobility as a Service (MaaS), which is making huge inroads thanks to asset light new players/mobility providers such as Lyft in the US, Uber or Didi in China. With increasing urbanization and the rise of the megacities (characterised by their lack of space and increased noise and air pollution), we need to look also at these bigger, more pervasive changes. 


In order to address the subject matter of innovation in mobility, we should therefore look at it from different perspectives. By looking at mobility through a city infrastructural lens, for instance, and dividing different cities into three distinct types, it becomes clearer how we will achieve access to and provision of good transportation. 


At Guangzhou last year, Volkswagen Group China announced its strategy to deliver 1.5 million new energy vehicles (NEVs) by 2025 and launch 15 locally produced NEVs in the next 2-3 years.


The first city type worthy of a mention is Efficient Collectivism. These are the cities which are good at scaling and are used to what is known as the visible hand: they are highly regulated, scaled and standardized city systems which have been streamlined towards collective efficiency. Guangzhou is a good example. In these cities, the city itself features heavily in the provision of transportation and the setting of the rules of the mobility game. 


Dar es Salaam the first African city to win the prestigious Sustainable Transport Award in its 14-year history.


At the other end of the spectrum you have cities characterised by what might be called Overburdened Sprawl. These are diverse, informal and unorganised cities that rely heavily on DIY and local solutions. Mobility solutions are about enabling individual development for improved quality of life. Dar-es-Salaam and Mumbai are examples of this type.


Meet the six tech startups working with Transport for London to make the capital a smart city.


Lastly, we see cities defined as Effective Individualist, which are mainly found in the Western world. These are cities which are good at innovating and are under the grasp of an invisible hand: a liberal and highly diversified economy where individual effectiveness is maximised. The Bay Area, and even large cities such as London, Berlin and Milan are good examples of this type.


There are probably numerous other city types you could come up with, but three seems like a reasonable number to draw clear distinctions. The point is that we need a more nuanced approach to mobility for each context and city type and the solutions can be vastly different from one to the next. In a collectivism scenario, the government will take a lead role in structuring the adoption of new means of mobility, even possibly one day outright banning ownership if efficiency calls for it. 


Then, closer to home in the West, we see a bit of a mix: some restrictions on individual mobility but also an emphasis within cities on outsourcing. Outsourcing the provision of mobility through certain players who play by certain rules – resulting in a healthy interaction between mass transportation (which is often already in public hands) and more localised and individual transportation to get from A-B.


This is where shared mobility and autonomous vehicles will play a very big role. With electric vehicles (powered by renewable energies) you will have a significantly reduced local carbon footprint. This, together with autonomous vehicles, with their lower accident rates, greater efficiency and better utilisation rates – are what will fill part of this new space.


Shared electric mobility then will play an important role going forward. Automakers will inevitably expect a fair slice of this transforming market with new players competing for a share of wallet whilst revenue per mile will fall over time with better asset utilisation. So automakers will need to look for new revenue pools in related product and service offerings. 


At the same time, public authorities will aim to make their cities/regions attractive in the context of increasing urbanisation rates and pollution. Software tools allow governments to better manage their city infrastructure by helping them to define, simulate and implement the overall social and political objectives on how the infrastructure should be utilized. This in part the thinking behind the investment of Porsche SE – a holding company which owns the majority of the voting stock in Volkswagen Group (which in turn owns inter alia the Porsche brand) - in PTV Group. PTV Group provides software to simulate, plan and optimise networks across all modes of transport, from pedestrians and bicycles to cars, trucks and even fleets as well as public transport. The market leading software facilitates to lay out the mobility framework of the future – setting, monitoring and managing the rules for mobility providers in a city. 


It is an ever-changing and complex system. For example, cities have certain priorities in certain areas at certain times – for example pedestrian zones in some areas vs. good traffic flow in other parts of the city. Or logistics services should be prioritised at night whilst commuter traffic in the mornings and in the evenings. As individual mobility providers will optimize for themselves this may come at the expense of a city’s objectives, for instance through negative externalities of congestion, noise or exhaust emissions. So cities will increasingly use software to define and manage dynamic policy schedules.


In short, mobility is more than just getting from A-B. It is a multi-layered and truly compelling interaction between multiple parties and different levels – it is time to treat it from a holistic perspective across different stakeholders.

The end.