Blog. The future of mobility. Part 1 of the series ‘Disruption and New Business Models’
We live in a fascinating and rapidly changing world. Together, technologies such as robots, artificial intelligence, the Internet of Things, self-driving vehicles, 3D/4D printing, solar energy, nanotechnology, biotechnology and quantum computing are initiating a 4th Industrial Revolution. We are witnessing new products, new methods of production and new business models across all industries. This is Part 1 of the series Disruption and new business models, discussing the future of mobility.
Self-driving cars and the end of the driving licence
Bad news for those people who enjoy driving a car. The autonomous or self-driving car is on it’s way.. It is only a matter of time until the driving licence becomes obsolete. Driving a car oneself will simply be considered too dangerous. In 2015, road traffic accidents killed 621 people in the Netherlands; almost all of these accidents were caused by human error.
Watching TV, reading a book or just having a quick nap is not currently permitted when driving. This will continue to be the case for at least the next 5 years. However, we are already seeing the introduction of partially automated solutions on the market: automatic braking, lane keeping systems and intelligent reverse parking.
All major car manufacturers, car part suppliers and technology companies are investing in the self- driving car. Google has been testing them since 2009 and entered into a partnership with Fiat-Chrysler. Apple is said to have a team of 1000 people working on the development of self-driving cars. Microsoft has positioned itself as a supplier in a collaboration with Toyota, for example. Following in the footsteps of Tesla, brands such as Audi, BMW, Ford, Volvo, GM, Peugeot and Mercedes are all investing substantial amounts in autonomous driving. Even brands like Jaguar and Maserati are jumping on the bandwagon. And major suppliers such as Bosch and Delphi are doing the same.
Driverless lorries, autonomous ships
What is possible with cars, is also possible with lorries. Manufacturers DAF, Iveco, Scania, Daimler, MAN and Volvo are not only experimenting with autonomous trucks, but also with self-driving convoys; only the first lorry in the line requires a driver.
Autopilot has been used in aeroplanes for many years, but this technology is now moving down to sea level. Companies such as Rolls Royce have publicised detailed plans for autonomous shipping.
Drone taxis and self-flying helicopters
Then there’s the latest means of transport: the drone taxi. The Chinese company Ehang, along with a number of other businesses, has developed a working drone taxi prototype with room for one passenger. There is definitely no room for a driver. The Ehang 184 drone can stay in the air for 23 minutes at speeds of up to 100 kilometres per hour. Airbus and Uber are also developing self-flying drone taxis which can take off and land vertically.
Following on from an idea by Elon Musk (Tesla and SpaceX), various groups are currently working on the development of the Hyperloop. This concept works a little like pneumatic tube mail, where items are delivered via a network of tubes. In the Hyperloop, capsules carrying approximately 20 people are sent through a low pressure (almost vacuum) tube at speeds of up to 1000 kilometres per hour. Setting up such a system either on poles above ground or underground is complicated, but uses significantly less energy than our current trains. Possible routes might be Los Angeles – San Francisco, Helsinki – Stockholm, Budapest – Bratislava – Vienna, and Amsterdam – Paris. Services will be similar to that of the metro, with only a few short minutes between capsules.
The future of energy is electric and (almost) free
The fuel-powered engine has had its day. Norway is considering abolishing all sales of new vehicles with petrol or diesel engines by 2025. In Germany, the same proposal is being considered for around the year 2030. Dutch politics seem to be more prudent, aiming for a fuel engine sales ban in 2035. If the current trends continue, fuel engines will cease to be manufactured long before 2035.
The price of electricity is dropping at a spectacular rate. The so-called Swanson’s law suggests that the cost of photovoltaic cells needed to generate solar power falls by 20% with each doubling of global production capacity. Since 1980, this has been every two years. The first years progressed at snail pace, but currently 2 percent of global electricity is produced by solar energy. With another 6 doublings in 12 years, we can meet all electricity needs with solar energy. This will mean we no longer have to pay a per kWh price, but a fixed monthly rate. We can compare this to the development of domestic internet use – in the early years of the Internet we paid per MB.
Furthermore, this rapid fall in electricity prices means that the transition to electrically powered transport is no longer a pure environmental issue, but is increasingly driven by economic motives.
Possession is out, sharing is in
We increasingly see the sharing economy in various industries and in different forms. Under pressure from the Taxi Lobby, the Dutch UberPop service which allows individuals to provide taxi services in their own vehicles, was shut down. The question now is how long this ban will last. Car sharing is becoming increasingly common via companies such as MyWheels, Snappcar, Car2go and Greenwheels.
New business model: car-as-a-service
Car manufacturers have realised that car sales will drastically fall due to the sharing economy and are continuously implementing and experimenting with new business models. DriveNow is the vehicle sharing concept from BMW. You can use a car on demand, picking up the car from any point and leaving it at another. Clients pay per minute and petrol and parking costs are included. DriveNow is available in Munich, Berlin, Düsseldorf, Cologne and San Francisco.
When we combine some of these developments, the self-driving taxi is the logical next step. In Singapore, nuTonomy – an MIT spin-off – is in operation. Although a driver sits in the car for safety reasons and the driving range is limited, the direction of this development is clear. Uber and Volvo have started up a similar initiative in Pittsburgh, BMW starts its own in Munich in 2017 with 40 cars, GM is working together with Uber-competitor Lyft, while Volkswagen has launched MOIA in order to do the same.
Physical and digital infrastructure
This mobility system requires a different form of infrastructure. Robots – as these are, in effect, what autonomous vehicles are – use roads more efficiently, meaning motorways do not need to be made wider. Of even more importance is the digital infrastructure; autonomous transport is completely dependent on the exchange of data between vehicles, other road users, traffic lights and traffic information services. Self-driving cars will be the primary users of 5G, the next generation mobile internet, to be launched as from 2018.
Empty parking spaces
In the car-as-a-service business model you never need search for a place to park; city centre car parks will no longer be necessary. Parking areas where the autonomous car can park itself when not in use can be situated out of town on cheaper plots. Not only will this cause significant financial losses for car park owners, but also for municipalities receiving a large percentage of their income from the rental of parking spaces by both residents and visitors.
An end to car insurance
If cars are self-driving, there is no longer any need to insure for damage caused by a driver. Obviously, damage liability will shift from the driver to the vehicle manufacturer, who will be required to pay for the consequences of any accidents. Current legislation does not support this, but manufacturers and legislators should discuss this transition of liability.
Who invests in EV charging stations?
We increasingly see electric vehicle charging stations along the motorway. Personally, I don’t get this business model; I hardly ever see anyone using them. Hybrid vehicles with an empty battery simply switch to petrol, while fully electric cars have a large enough range to take them from Groningen to Maastricht. In addition, battery technology is constantly improving with ranges similarly increasing. Only a journey to a holiday destination in Southern Europe is still too long to undertake without a recharge.
No innovation without risk
The new forms of mobility which have been discussed here would not be possible without powerful information systems. This means we must also consider digital vulnerability. If systems are not properly secured, hackers can use them to take control of vehicles or cause traffic accidents. Many of these technologies, such as self-driving cars and the Hyperloop are still very new. We cannot rule out that accidents could occur as these technologies are further developed and tested.
Nevertheless, these new mobility developments are irrevocable. Cleaner, cheaper, faster and more comfortable transport methods are already appearing on the horizon.