Navigating Hyper-Innovation in Urban Mobility
We are witnessing a global land grab in urban mobility — with entertaining skirmishes, strikes, lawsuits and even criminal charges (e.g., Uber in France). In the old days, people would get around town by car, public transit or taxi. But in five short years, most metro areas now have over a dozen mobility providers.
Xerox launched an effort to address three over-arching challenges in urban mobility. In the process, we developed a mobility marketplace platform for local government to better coordinate the hyper-innovation in the transportation industry.
Coordinating the Wild West of Urban Mobility
How do I evaluate all my options?
How could people standing on sidewalks in any major city possibly know all their options for getting from points A to B? Is a bus about to arrive at the stop around the corner? Is there a Zipcar parked in the garage across the street? Are there any bikes left in the closest bikeshare station? Knowing your options requires a dozen different apps.
According to the U.S. Bureau of Labor Statistics, transportation accounts for the second highest consumer expenditure after housing — that is, over $9,000 a year. Will all of these new options bring down that spend? Yes, but first, we need pricing transparency for the consumer in order to know the true cost of getting to a destination. What is cheaper: taxi, Uber, Lyft, Car2Go or Zipcar for this particular route? Is it cheaper to combine two modes, like taking Lyft to the metro?
Consumers lack visibility into all the options available to them and what they cost. In economic theory, this problem would be called “asymmetry of information.” Historically, marketplaces helped consumers easily pick between priced alternatives and make informed decisions. For example, the NASDAQ marketplace provides real-time pricing for every listed company’s stock.
At Xerox, we have been working for two years now with the cities of Los Angeles and Denver to create platforms with all their transportation providers, both public and private. Each platform enables consumers to sort and personalize their options according to price, time and environmental consciousness.
Who is responsible for regulating the market?
The United States federal and local governments highly regulate public transit and taxicabs for safety, accessibility, equity, fair competition, etc. Extending these same regulations to the emerging players in urban mobility is a challenging if not impossible task for government. In the example of carpooling, a free ride with someone in an affinity group is one thing, but Lyft Carpool — “Turn your commute into cash” — is something else entirely.
In this warp-speed market, the private sector will invent a new solution before the red ink of regulations dry. A mobility marketplace, like the NASDAQ, provides a level playing field, common rules of play and a standardized data exchange for local government. Clearly, local government is responsible for coordinating the mobility providers in its region, and a good place to start is creating a virtual marketplace where its citizens can make informed decisions.
This marketplace will also benefit the next mobility startup that wants to launch in a given urban area as it will provide easy access to customers and insights to help tailor solutions and pricing.
Will there be another reset with self-driving cars?
There is the likelihood that just as urban mobility is leveling off and maturing that we will be faced with an entirely new disruption – the mass production of self-driving cars. Before looking at this second wave in mobility, it is best to make some simplifying assumptions.
First, self-driving cars will be initially focused on urban areas, with demarcated or protected lanes. Second, these cars will be owned primarily by corporations like Uber, Google and Ford due to the complex legal and insurance issues surrounding them. If these assumptions hold true, then we might see a hyper-evolution of self-driving cars from dedicated garages in 2020 to ubiquitous coverage in cities by 2030.
Municipalities will want regulations to support this phased evolution. At a minimum, autonomous vehicles should be plugged into the mobility marketplace.
Autonomous vehicles must be complementary to public transit, carpooling and other congestion reducing solutions. In fact, transit agencies are likely to purchase autonomous shuttles and buses, and a mobility marketplace can promote this digital infrastructure.
Government has a Role to Play in this Mobility Revolution
In today’s multi-sided market of urban mobility, local government needs help in creating a NASDAQ-like platform to better coordinate all the public and private players to improve citizens’ everyday lives. This will be an even more urgent need with the advent of the self-driving cars.
Local government or a regional transportation authority, should fill the vacuum in urban mobility today and create a marketplace that facilitates interactions among all the public and private players in the metro area. It need not be the federal government as urban transportation has always been hyper localized. In the spirit of 1776, local government can and should promote “Life, Liberty and the Pursuit of Happiness” through leveraging technology to ensure the bright future of urban mobility.