Alan Williams, Neil Hoose and Andy Graham take a look at business models and products focused at improving mobility, comparing city authorities with automotive providers and suggest that perhaps there is a trend emerging that will have implications for all providers of mobility infrastructure and services.
One key aspect of the ubiquitous IT we all now have is the ability to provide services and products much more tailored to individual preferences. This leads to the creation of “niche” products and services, eg ride sharing and car clubs. We foresee a need to knit these niches together and create the ability for “dynamic niches” (think of biological cellular structures – nature is good at this) capable of forming and reforming, evolving and growing as the need and location changes linking to the other major factors driving the modern world. Deteriorating mobility hugely impacts on the modern world and has a major economic impact on most parts of our lives.
“Mobility”, “future cities”, “big data” “connected vehicles” and various other terms are starting to dominate the ITS landscape, and in many cases the technology is coming to maturity. But what still seems to be the “Emperor’s new clothes” question is “who wants them, and who will pay for them”? In other words – what is the business case for the smart city?
We have spent many years and many projects considering this issue – especially recently through the review of each of the recent Future Cities bids made by Local Authorities in the UK for the Technology Strategy Board (TSB) and also from an automotive/vehicle perspective, reflecting the authors’ diverse backgrounds.
The conclusions we have come to contrast with the “top down” architecture seen by many especially in the future cities arena, and also the “provide access to data and people will create apps” approaches of some of the big data community. Instead we see that “mobility” is becoming more a collection of transport themed “niches” rather than a single integrated system (at least in the developed world). And our argument is that mobility – for individuals and cities alike, comes from the way these existing and emerging transport niches can be designed as dynamic structures that mould, change and link to suit circumstances and how they are woven together to deliver benefits at the larger scale.
A few examples we have found demonstrate this idea of a “niche”. Let’s look at individual users first.
IDENTIFY YOUR NICHE
Firstly, the deployment of apps and web services is very locally tailored – for example in London there are over 20 Barclays Bike (known to Londoners as the Boris Bike) hire apps, but we know of no UK-wide – let alone Europe-wide – app. The appearance on the roads of the USA of the fully automated car raises some interesting benefits for car owners. The task of driving in onerous or tedious situations can be safely undertaken by the automatic system relieving the driver of stress, the automated system can achieve better fuel economy and such cars offer mobility for those for whom normal driving is physically difficult but who otherwise are perfectly capable of supervising an automated vehicle. However, recent surveys including the “Driverless car” by the AA – the UK’s largest automobile club – suggesting that the majority of drivers currently don’t want automated vehicles (although the desire varies with the age profile). Clearly in the short term full automation will be one niche within the overall automotive market.
While we have to respect the point made by Apple and Sony and the projects being developed by Google that people don’t know what they want until they can get their hands on it and see the benefits, (although this has proven to be the case in many areas of technology – the computer, the mobile telephone for example) this sort of approach doesn’t encourage building a business case for an automated vehicle. But look under the bonnet and various niche applications are starting to take market hold – the parking sensors we all like are now moving to auto park, and the cruise control to collision avoidance. These are great examples of niche technology applications being drawn together for a more significant benefit – particularly in safety and convenience – development of technology and business roadmaps driven by market needs and desires are really helpful for predicting and planning the “eventual “ outcomes – function and business.
Drivers may not want a fully self-driving car – but many would be happy for it to self-drive in niche when a significant need arises.
Additionally, most people travel in a local area for most of the time, so the need for pan-European journey planners is not as strong in their mind as knowing that a temporal incident such as tree across the road or an accident on the way to work 4km away. Facebook and Twitter are starting to become the way for geographical niche information tailored to the user, apparently delivered free of charge. Local bus, train and airport apps are widely available, but very few people want to know the status of every bus in London – they want tailoring to the bus they are waiting for. Likewise car clubs and van clubs allow more tailored access to vehicles and ride- and load-sharing apps allow the capacity of a vehicle to be better used.
So for the individual user, we simply won’t have a top down plan of what we need for mobility. An example of this is parkatmyhouse.com . This is a neat idea – people can sell on a market spaces in their drives that would otherwise be empty and require drivers to find a public parking space. But take a look at its investors – they include BMW. This is indeed clever – BMW have found a niche they can exploit that doesn’t require the user to have a BMW, can add value to BMW owners and move into the mobility space, without a great risk or huge investment and with a clear business case. Other vehicle makers are doing the same. Travellers are able to pick and choose the bits that offer them the benefits they want, and smart businesses will offer the ability to “pick and mix” rather than sell an all singing, all dancing service.
There is an opportunity through clever marketing and exchange of data to tie these transport niches into a mobility approach without users noticing. In the automotive sector, there are already middle players taking data and analysing and repackaging it as information, making the most of the networks we have. INRIX, Mediamobile and Trafficmaster to name but a few collect data and add value, and have a business model that has adapted over many years. What is interesting is vehicle makers, pay-as-you-go insurance and other service providers also providing niche products. We will wait and see what the plans are for joining them up, or if a pick and mix model remains.
A HOLISTIC APPROACH
The challenge comes when you try to match the impact of niche products on the overall mobility of a wider area. For cities, there is a real gap between the top down context of holistic policies driven by the main political and economic needs of the city, and the delivery of benefit in the real world through the emerging niche applications. This is because the current thinking lacks real tools and “levers” that turn the data collected and channels provided by the niche services into policy related benefits.
We are yet to see in mobility a practical bridge between the two sides of the river that say “collect lots of data and derive analytics from it” and “save operational expenditure in the delivery of policies”. There is a need for an equivalent of the middle players we already have in automotive to make that span and also make it at a price cities can afford, as it offers them a clear benefit. Such middle players have the ability to realise economies scale by working across multiple cities and regions. In today’s world that really means cash saving, and so it means making better use of what assets we have. A city has to justify investment in this area against filling potholes, reducing speed camera revenue or subsidised travel. It needs to see hard benefit!
The good news is that relatively cheap IT allows these city niches and more importantly the gaps between them to be identified. The market will work out what data to combine and how to package it to meet the top down plan, but simply badging technology as “mobility” doesn’t stand up to scrutiny – what is needed is a set of tools for not just intelligent analysis of the data and conversion into useful information, defining what data is available and where the gaps are, but what to do differently – what road junctions need redesigning, what bus routes need changing, what cycle hire stations need moving, what car parks need a different charging regime? This really resonates with the “better use of what we have” agenda.
The question for cities is; can they themselves also identify these gaps in between niches and enable them to be filled by making clear requirements for the market? This would allow the gaps and inefficiencies in the overall network to be exploited and hence improve overall mobility in line with policy. They need to see that the niche applications can be evolved in to something larger and the market needs to provide products that are transferable/repeatable to similar applications.
But there are also perhaps inherent dangers to overall mobility if one niche is overly successful and demand for that niche can only be met by taking capacity away from elsewhere. There are also potential social and environmental impacts that may be negligible at the “niche” level but become significant if the thing grows too big. Car clubs are more or less invisible when there are only a small number of cars waiting for users but what happens when they become a main user of parking spaces? How can “Boris” bike schemes ensure there are sufficient bays available at the popular destinations without starting to have a serious impact on the local environment? If large numbers of automated cars are sold what is the impact on driver training and licensing?
So we do need a top down plan, and we do need the niches of mobility that are merging, but the way they fit together needs more work. The lesson here is that the business model is changing as the more, specialised suppliers deliver into a fragmented market of customers with particular preferences.
The niche model does work to bring a bigger connected world– would we have the iPhone if it weren’t for iTunes? Would we have Twitter without SMS? But there was never a grand plan – the market and clever, responsive marketing made it happen. SMS was after all an afterthought on mobile phones for engineers to contact one another, not a key USP of a mobile phone.
So our message to the market is to find/look for niches and exploit them, but also take a view of how they can be added together to make really useful tools for people who run cities day to day. There are some great niche examples happening – for reporting roads faults, public transport information via apps (why fit a dedicated GPS unit to a bus when your passengers carry lots of them for free?) and the parking we mentioned. And there is lots happening in big data and future city integration. We will have a true mobility approach when we connect the two, both operationally and with a business case. Until then it may be a bridge too far.
Alan Williams, Neil Hoose and Andy Graham are the co-founders of CHASE.