R

If I were a caveman, I had one mode of transportation; my own two feet.

For a few million years, that's how we all got around. We walked to get water. We sometimes ran to get food or escape danger. Eventually, we developed more clever single-player modes of transportation like the canoe or domestication of horses to make our way from point A to point B. But for a few million years we relied on our feet as a single-player mode of transport.

Eventually, that changed. Our populations grew. Our knowledge accumulated. Our curiosities spiked. It was no longer tolerable to contain ourselves to a limited parcel of land. Villages needed to become empires. Hunger and thirst were to be eradicated. We wanted more community. We wanted to explore. To do so, we needed new ways of getting around so an implicit agreement was made to unshackle ourselves from our bipedal limitation

A few thousand years of innovation in single-player transportation mode was eventually replaced by a few hundred years of multi-player thinking. A revolution in mass-transit made us a global species living an increasingly abundant and connected life.

Horses were coupled with chariots and carriages capable of delivering a few people at a time to neighboring villages and kingdoms. Canals and river-bearing craft were created and that spurred a network of interlinked populations and intrastate commerce. Sailships allowed fort the mastery of ocean navigation and introduced the first truly global trade networks. Boatloads of people and goods began to make their away around the planet. Once the human species had settled each major, habitable landmass we created railways and steamships. Interland travel and commerce exploded. Airplanes and containerships enabled the first truly global transportation infrastructure.

If there's a trend worth noting it's that transportation evolved primarily from a one-to-many format. Most of the 1,000 years of transportation innovation focused on delivering people and goods in bulk. However, it was the introduction of the automobile and highway networks that kicked off the mobility wave intended to solve for individual modes of transport. The demand was so great that automobiles quickly became the dominant form of transportation on the planet; besides our own two feet, of course.

We had come full-circle from small packs of bipedal nomads to large packs or globally connected citizens, yet the desire for individual autonomy and mobility was still there. For the first time, cars made it possible for an individual to travel easily and efficiently over large distances.

Yet that proved to be both a blessing and a curse...

Urbanization

A long time ago, people migrated to nearby rivers, oceans, and lakes because the water was the source of abundance. You could drink it. Transport things on it. Use it to grow crops. And even use it for waging war or tactical defense. Yet most of the world lived a predominantly rural life up until recently.

In fact, 2009 marked the first year in which the urban population outnumbered the rural population and that trend is continuing. As civilization has shifted to increasingly dense mega-cities, we’re finding that the initial infrastructure to support a burgeoning urban population can’t keep up — including our transportation infrastructure.

Eventually, the benefits of urbanization far outweighed the virtues of rural life so people began rushing to cities. Major metropolitan areas offered greater access to clean water, food, jobs, health care access, and entertainment. That trend towards urbanization can be seen in one of the youngest yet most prosperous nations on the planet — the United States.

The same is true globally with 68% of the world’s population projected to live in urban areas by 2050. More than 4 billion people now live in urban areas globally. As a result, cities are feeling the strain. And so are the people that have migrated towards them.

https://i.redd.it/w36ac6s605x11.jpg

Thankfully, many people are already hard at work rethinking human transportation in the era of mass urbanization. The solution comes in a few flavors.

  1. Making transportation 3-dimensional: vehicles that can fly or move through underground tunnels
  2. Smaller hardware: creating hardware for individual transport that is smaller than a car and more efficient and fun to use
  3. Smarter hardware: hardware that allows vehicles to work as a network and run autonomously and collectively
  4. Cities and vehicles that run on software: software that orchestrates and optimizes transport
  5. Cooperation: the private and public sector will forge closer financial partnerships that increase infrastructure investments

Misaligned Dimensions

Our cities are built in three dimensions (length, width, height) meanwhile city transportation only works in two dimensions (length and width but not height). In addition to population inflows to urban areas, the mismatch of city design and transportation design leads to increasing congestion with all forms of transportation. To solve the dimensionality problem, some companies have focused on tunnel transport (The Boring Company) and others are focused on urban air mobility (i.e. flying transport). Their belief is that the solution lies in making urban transportation three dimensional. It certainly sounds cool. But there are a few downsides.

For one, building tunnels requires a massive investment in hardware and government relations. Let's all agree that we should just leave that to Elon Musk to figure out. Secondly, as it relates to flying cars, I think the average person is willing to accept the risk associated with a parts recall on a driving car — such as a faulty seatbelt — yet most people aren't willing to accept the risk of a faulty part leading to a flying car dropping out of the sky and into a populated area.

In addition to that, addressing the 3rd dimension of travel doesn't solve for the bulk of transport.

Smaller Hardware

Scrutinizing the data suggests that there is a larger lever to pull when it comes to solving our mobility challenges. Clearly, the majority of transportation happens via automobile so it is reasonable to assume that one solution is to allow cars to move in three dimensions (underground or through the air).

But if you drill into the data you'll find that the lion's share of passenger vehicle transportation happens over a very short distance. Is it necessary to drive a 4,000lb car 1 mile to run an errand? No. Nearly 60% of trips are a few miles or less.

Whereas flying cars and tunnel transit may alleviate some of the pressure on short-distance trips, staying on the ground but utilizing a much smaller and more efficient form factor will be even more impactful when it comes to improving urban transportation. And as Deloitte has pointed out, adoption has been exponential.

"Adoption rates during their short time on the market have been impressive, surpassing that seen by popular ride-hailing applications during their early days. Bird hit 10 million scooter rides within 12 months of first appearing on Southern California streets and sidewalks, while Lime users took 34 million trips across the company’s platform of vehicles—including e-scooters, electric and pedal-assist bikes, and carsharing—in that company’s first year."

Smarter Hardware

For anyone that's driven a Tesla and then reverted back to the car from another manufacturer, they will often state something to the effect of "My old car feels so dumb now... I can never go back." For years it's been incredibly difficult to just connect to a car's in-dash software via Bluetooth, let alone do anything more complicated than that, such as park itself or even drive itself. But the next generation of cars and new mobility hardware is changing that.

Not only is there a large menu of new modalities meant to serve the first mile, last mile use case (e.g. electric scooters) but there's also new modalities meant to remove the human component partially, and eventually, completely.

Source: travelandmobility.tech

There are 16 categories of new transportation innovation with 12 of them addressing urban short-haul and middle-distance ranges with at least 160 different companies making a run at rethinking transportation hardware.

To make these modes of transportation more efficient, they must also be interconnected and “speak” to one another. Today, the cars on the road aren't aware of each other or their surroundings. They require complete human intervention. But that will change.

Not only would there be fewer accidents, but trip routing would also become much more efficient, reducing the burden on an increasingly stressed urban infrastructure.

Smart Cities

Ultimately, most of urban transportation should operate on top of an API layer that intelligently coordinates people in transit across all forms of transportation, in addition to orchestrating most other forms of urban infrastructure.

There are a few trends coming together that will enable cities to operate more intelligently/

  • Automation: hardware capable of operating without human intervention
  • Machine Learning: use of algorithms that improve automatically by experience
  • Connected Devices: proliferation of internet-connected devices

Developing autonomous hardware is costly and is being driven predominantly by deep-pocketed large technology and automobile companies capable of making the multi-billion dollar R&D investments required to deliver high-performance hardware at a unit cost low enough to provide for mass adoption.

Device connectivity is well-underway with Cisco’s former CTO estimating that nearly 330 million new devices/objects are being connected to the internet every month. There are already 30 billion IoT devices and still growing at a very fast rate.

The Silicon Valley is the epicenter of machine learning creation and adoption and is playing a key role in utilizing this technology to accelerate the consumer benefits that come from the intersection of automation, machine learning, and connected devices. The connected devices and autonomous hardware play the role of capturing vast amounts of data, which are then fed into machine learning algorithms to quickly improve the rate at which these devices learn and become more efficient. Collectively, Tesla and Waymo have fed their machine learning models with several hundred million miles of driving data.

But where are the cities in all of this? They are not at the forefront of each trend. They aren’t developing the technologies necessary to undergo the “smart” city and “smart” mobility transformation. Consequently, they will become customers of these new technologies and will seek to partner with, adopt, or pay for someone of these new technologies and the private sector companies developing them. 

However, coming up with the funds for new technologies is difficult. As Deloitte concisely put it:

 “A key step in any smart city financing effort is developing a comprehensive strategic plan to capitalize on the project’s strong points. This can help to improve the initiative’s "investment readiness" and its access to finance. The plan should include a robust business model; a creative approach to funding and financing sources (finding new sources of revenue for projects and new business models for recovery and value capture); and innovative financing structures for investors.”

As the report goes on to show, nearly 50% of the time cities will finance public infrastructure improvements via a combination of both public and private sector financing. One of the private sector financing options being a revenue-share model where cities collect a share of revenue from the private sector based on performance. 

As a result, it is believed that a revenue-share model is the ultimate business model for software to be sold into cities as it allows cities to identify a new source of revenue as opposed to dipping into their existing, constrained budget, which would require the city to take capital from one city division and allocate it toward another; something that cities are often hesitant to do and requires a lengthy budget process. 


The challenge of urbanization continues to stress the budgets of cities. This example from Denver shows how cities and counties fight for their slice of the pie, which is already limited and increasingly constrained due to urbanization pressure. Consequently, cities will be more inclined to pursue alternative financing options, such as taxing mobility operators in order to earn

Cooperation

The era of dropping scooters into a city unannounced is over. Cities are increasingly introducing regulations and controls to enforce operations according to city standards. That trend won't slow down. It's going to accelerate and that's actually a good thing.

For new mobility to work within our cities, they need a place to operate. Case study #1 is with bike lanes. A city can only support the transition to bikes and scooters and away from cars if it has lanes built specifically for bikes and scooters. But it turns out that cities don't have deep pockets of discretionary budgets to finance the development of new infrastructure. They'll be forced to look for new ways of coming up with the cash, which will likely involve a combination of financing via both the public sector (federal and state government) and private sector (taxing mobility companies).

This is an essential point as cities and states are slowly losing two major revenue sources and already faced with strained budgets in the face of mountain pressures from urbanization. The first being an inevitable decline in revenue generated from the gas tax as fuel consumption will decline as electric vehicles become the norm. Second, cities will continue to lose sales tax from retail stores due to more and more consumption taking place online via Amazon and other online outlets.

Consequently, cities must turn to new sources of revenue in order to finance city operations, including the development of new infrastructure that will provide right-of-way to this emerging class of mobility operators. By taxing the bike, scooter, rideshare, and autonomous car companies for using city infrastructure (roads), they will have a new revenue source that allows cities to invest in alternative infrastructure such as bike lanes, more docking stations, charging stations, and so on. Which will, in turn, accelerate the adoption of new transportation modalities.

Join Our Newsletter and Get the Latest
Posts to Your Inbox

No spam ever. Read our Privacy Policy
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.