By Ross Douglas, Founder & CEO, Autonomy
The Future of Urban Mobility Series: Introduction
The urban mobility disruption is gathering momentum. Companies that anticipate the future will be the disruptors and not the disrupted.
From our Autonomy offices in Paris, our team of 16 connect to thought leaders, innovators, funders and cities on what this future might be. In creating the annual Autonomy & The Urban Mobility Summit, we interact in various ways with 250 mobility speakers, 2000 mobility companies, 20 Innovation Labs, 500 mobility startups and more than 100 cities.
These interactions give us unique insights into what solutions innovators are creating, investors are funding, cities are wanting and commuters are likely to choose.
Here are five points of view worth sharing:
- It’s no longer about the idea – it’s about the money.
There are thousands of startups focused on new mobility niches. Every niche has competing companies using similar technology. The winners are usually those with the deepest pockets. The scale of investment in new mobility is staggering. Alibaba, Tencent and SoftBank’s 100 Billion Dollar Vision Fund will out-fund the competition and create winners.
We are seeing the results of these investments on our urban streets. Thanks to their backers, Mobike and Ofo have outlasted the 40+ other free-floating bike share startups. Ofo has raised $2.2 billion and Mobike sold to Meituan-Dianpin, a $30 billion company backed by Tencent, for $2.7 billion.
According to Quartz Media, SoftBank have invested $19.8 billion in Didi Chuxing, $9.3 billion in Uber, $3.8 billion in Grab and $2.5 billion in Ola, making them the real king of ride-hailing.
These numbers make it hard for a new startup to enter the bike share or ride-hailing market. As if that were not enough, Didi Chuxing have their own fund and are investing in a collection of mobility services with the intention of being the first global multi-mobility company.
- Urban road surface – the new rare resource.
Massive highways funnel cars into the world’s major cities where they crawl around at an average of 10 km/h looking for parking bays, until the process is reversed for the afternoon rush hour. This daily traffic routine is good business for the auto-industry and radio stations, but not good for anyone else. Mayors want cars out of their cities, which will allow them to repurpose valuable surface-level asphalt into bike lanes, pedestrian walkways, open air retail, restaurant squares and mini-parks. They are now working with mobility companies that can offer citizens ‘Mobility as a Service’. Mobike was welcomed in Manchester as the city could not afford a traditional bike-share scheme.
Mobility companies have quickly realized that they need to build relationships with city authorities to put their service on the roads. According to TechCrunch, Uber recently bought e-bike sharing startup Jump for around $200 million. Why would Uber pay this money for a bike-share in one city (San Francisco) with only 250 bikes? Uber CEO Dara Khosrowshahi values the strong relationships Jump built with cities. While Uber could have bought 100 000 e-bikes with $200 million, it would have been wasted without the support of city officials.
- Autonomous vehicles – this century’s moonshot.
There are no guarantees that AVs will work in cities where roads are shared with unpredictable cyclists, pedestrians, children and in the future, a bunch of urbanites on Personal Mobility Devices. However, AVs still represent one of the biggest business opportunities this century. The cost savings of losing the driver are obvious but the big opportunity will be having an occupant in a connected pod for an undisturbed hour per day. Imagine the amount of goods you can sell them through Amazon and the movies they can watch on Netflix as they commute to and from work each day.
This vision is starting to scare policymakers. Firstly, the obesity epidemic is on the rise around the world, costing governments billions and contributing to 50 million premature deaths per year, compared to the 1.3 million caused by car crashes. Many leaders and policymakers are looking for solutions that encourage their citizens to engage in active forms of mobility, not spend more sedentary screen-time inside a vehicle. Secondly, European cities are fed up of online retailers destroying local businesses and not contributing to the cities fiscus. While the race today is for the best AI technology, AV operators will need to convince cities that they offer more value than simply reducing congestion.
- PMDs and LEVs – the right size for urban living.
Electric cars don’t pollute but they do congest, as anybody stuck behind a Tesla S will know. Cities like Paris want cars out to make more space for people. This intention, combined with tech evolution in small electric motors and dense battery packs, is creating a new category of personal mobility devices (PMDs) and light electric vehicles (LEVs).
The startup Bird recently deployed a bunch of electric standing scooters in San Francisco. The uptake for the tiny, two wheeled vehicle was so big that the city banned them until they can figure out where they fit: road, cycle lanes or sidewalks? PMDs are highly effective at moving people quickly with a small footprint – exactly what cities want. If cities could sacrifice parking bays for dedicated PMD lanes, there would be an explosion in the use of these vehicles. But PMDs can’t carry a load or passengers. This is where light EVs come in. Normally weighing less than 100 kilograms, they have the full functionality of a car in the city, without the downside of taking up so much space.
- Conclusion: Three markets, three futures of urban mobility
Urban Mobility solutions will not be homogenous across the world. Three distinct types of mobility will be present in the major markets of the United States, China and Europe European cities will push for a multi-modal mix of solutions that keep urbanites active, walking first mile and last mile and engaging shops and restaurants along the way. The US will continue to be car-centric and perhaps more eager to embrace AVs, despite concerns. Private car ownership is likely to remain high, possibly leading to AV congestion. China wants to lead with EVs and with shared mobility. If you look at the ambition of EV startup NIO it’s clear that China, with the backing of Tencent and Alibaba, is pushing multiple startups.
This think piece is the introduction to Autonomy’s series The Future of Urban Mobility, which will be exploring the direction in which Autonomy believes mobility is headed in the US, China and Europe.