Singapore: The First-Mover Nation for
Driverless Cars
Autonomous
vehicles and connected cars are prompting a number of automakers and technology
companies to reconsider their strategy. They want to avoid being left behind.
But if their strategy is to build and sell driverless cars on their own, they
are moving in the wrong direction. Driverless cars are not like simpler
technologies, and they are not even like other motor-vehicle technologies. When
it comes to this frontier, the appropriate first-mover unit of innovation is
not the car, or even the car company. It is the nation.
One of the most promising autonomous
vehicle startups is based on that premise. It’s a small company called
nuTonomy, based in Cambridge, Mass., near its academic roots. Its cofounders,
CEO Karl Iagnemma and chief technology officer Emilio Frazzoli, are MIT
roboticists. Its financiers, who recently
invested US$16 million in the company, are led by Highland Capital Partners and
include significant participation from Fontinalis Partners, Signal Ventures,
and EDBI, the dedicated corporate investment arm of the Singapore Economic
Development Board (EDB) — the lead government agency working to enhance
Singapore’s position as a global business center.
But
nuTonomy is not building new cars. It is retrofitting existing vehicles (in
this case, electric vehicles from Mitsubishi and Renault) to launch the world’s
first commercial driverless taxi service, and it has set its sights on
Singapore.
NuTonomy
believes driverless taxis will be the catalyst for fast learning and widespread
adoption of autonomous vehicles. It hopes to introduce autonomous cabs into
Singapore as early as 2018.
In
one sense, nuTonomy is competing with companies such as Google, BMW, General
Motors, Baidu, and Uber, all of which have announced interest in autonomous
vehicles. But nuTonomy is letting those giants battle through the tangled web
of competition, policy fights, regulatory hurdles, and other entrenched
interests governing the pace of driverless-car development and deployment in
the U.S. while it takes its vision overseas. nuTonomy’s focus on driverless
taxi fleet services rather than just driverless cars, as well as its work to
establish itself in a place that is particularly supportive of innovation, and
where none of the other competitors has a foothold, sets it apart.
Driverless
taxis are a good place to start. They eliminate the cost of a human driver,
enable high utilization, and favor electric vehicles (which are less expensive
to manufacture, operate, and maintain), and in the process, they allow for
radically new business models.
Further,
driverless taxis can make constant mobility, on demand, at a much lower cost
than owning an automobile a reality. People spend millions of dollars to own,
store and service automobiles; communities spend billions on public
transportation. Autonomous taxis could shift all of those expenses.
Singapore is fertile ground for this
innovation. As an island nation, its urban density and finite space make it
particularly sensitive to traffic congestion and land use. Roads consume more
than 12 percent of the island’s area. Its aging population and limited
workforce of potential professional drivers makes mobility for non-drivers an
urgent policy imperative. Today, Singapore imports
half of its bus drivers from other countries. Its environmental conditions —
modern infrastructure, flat terrain, warm weather (no snow or ice), and
well-marked roads — simplify the introduction of driverless cars. Finally, the
nation’s strategic focus on fostering a high-tech, knowledge-based economy
makes it unusually open to driverless-car innovation, and its tight-knit,
efficiency-oriented government makes it easier to manage regulatory
constraints.
Singapore has a long history of public
and private support for driverless-car research, development, and testing. An
area of the island center is currentlyopen to real-world
testing,
and plans are in place for eventually opening up the entire island to
driverless cars.
Already there is a body of experience
to draw upon. Frazzoli, nuTonomy’s CTO, has been conducting driverless research
in Singapore since 2009, through a partnership between MIT and the National
Research Foundation of Singapore. His research focuses on the complex
decision-making rules that govern autonomous driving — a factor that is
especially important in “edge cases” where the car must
break the rules of the road in order to operate safely and efficiently. For
example, when should a driverless car cross solid-line lane markers to go
around a double-parked car? When confronted with a police officer directing
traffic and posted signs, which should it obey?
The research also looks explicitly
at autonomous fleet
management.
nuTonomy has developed algorithms that coordinate and balance a fleet of
driverless cars based on historical and real-time demand and road conditions. The
result will almost certainly outcompete today’s taxi and ride-sharing
companies. Human drivers rove, competing for fares, with little ability or
incentive to optimize system-wide service. Inefficient routing wastes miles,
adding to costs, congestion, and poor service. It leads to supply imbalances,
lengthier wait times, and, in some cases, surge pricing.
Fleet management is especially
important in Singapore, where reducing the number of vehicles is a high
priority. Frazzoli and his colleagues have shown that their approach
could enable a 60 percent
reduction in
the number of cars needed to meet all transportation demand in Singapore, while
reducing the cost per mile and keeping waiting times below 15 minutes.
In
an interview, Iagnemma, nuTonomy’s CEO, told me of his ambitious plans,
including a major demonstration in 2016. He envisions building a fleet of fewer
than 100 cars for the first operational pilots, then launching expanded and
more sophisticated pilots, and ultimately launching a “radical expansion.”
Singapore’s leaders are equally
ambitious. Pang Kin Keong, Singapore’s Permanent Secretary for Transport and
chair of its Committee on Autonomous Road Transport, talks about “radically
transforming land transportation in Singapore,” not just “to address our two
key constraints — land and manpower,” but to “gain valuable insights into how
we can design our towns of the future.” That last phrase is the real incentive
for both the company and the city-state. Because success includes lessons far
beyond technology, it will be hard for others to copy from afar. But it can be
taught. In the same way that the Netherlands exports its hard-won
expertise in
flood prevention and holding back seawater, Singapore could become the go-to
resource for making driverless vehicles work. Then nuTonomy could provide
products and expertise that move around the world, from one nation to another.
Together, or possibly separately, nuTonomy and Singapore could demonstrate the
value of autonomous vehicles while making Singapore a first-mover nation.
Chunka Mui
http://www.strategy-business.com/blog/Singapore-The-First-Mover-Nation-for-Driverless-Cars?gko=f2c87&utm_source=itw&utm_medium=20160728&utm_campaign=resp
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