An
integrated perspective on the future of mobility
A
number of social, economic, and technological trends will work together to
disrupt mobility, potentially creating three new urban models by 2030.
To view a city from
above is to observe a
world in motion. Trains carry people to and from work; taxis circulate in
abstract patterns; trucks deliver goods and carry away garbage;pedestrians hustle down city blocks; cyclists zip through
traffic.Mobility is the lifeblood of our cities and essential for urban life.
Yet, our desire for
mobility has consequences: cities can be noisy, congested, and prone to smog. Far too many urban residents
spend hours stuck in traffic; no one can escape airborne pollution. Mobility is
also a critical economic factor, both in its own right and as the means of
providing the goods and services that are the foundation of economic life.
Finally, mobility matters to people, whether this is getting to work or school
with ease, visiting friends and relatives, or simply exploring one’s
surroundings. In relatively few places, however, does the reality of what is
available match the public’s aspirations for safe, clean, reliable, and
affordable ways to get from Ato B—and back again.
We believe, however,
that the way people move around the urban environment is primed for dramatic
change. Already, new business
models, as illustrated by organizations such as Uber and Didi Chuxing, are
changing traditional mobility patterns. Technological innovations in the form
of electrification, connectivity, and autonomy are on the horizon. Increasing urbanization and the growth of “megacities” with more than ten million
people provide the conditions for change.
What, then, will be the
future of urban mobility? A new report, An integrated perspective on
the future of mobility, a collaboration between Bloomberg New Energy
Finance and McKinsey, seeks to answer that question. To do so, it explores how
a number of existing social, economic, and technological trends will work
together to disrupt mobility at the local level.
The result is a
radically different future based around three models of advanced urban mobility
that are achievable by 2030. Inevitably, individual cities will make different
decisions, based on specific local conditions, and go in different
directions—and, globally, mobility systems in 2030 will on average look very
much like they do today.
Yet there is a cluster
of some 50 urban areas that could lead the way toward one of the three
advanced-mobility models. These areas have the potential to demonstrate the
profound effects of mobility innovation on
everything from power systems to the use of public space, while simultaneously
introducing a new city dynamism.
The mobility systems of
the future are likely to be very different from what exists in most of the
world today. The individual traveler is at the heart of this evolution, so
consumers will need to be open to adopting new technologies and services.
However, both the public and private sectors will have roles to play in paving
the way.
The value of an integrated perspective
Numerous trends,
ranging from energy decentralization to the Internet of Things, are likely to
come together to create drastic changes in mobility systems over the next 10 to
15 years.
Predicting the future
is perilous. In this case, however, two factors point us in this direction.
First, several key mobility trends—electrification, shared mobility, and
autonomy—are poised to take off. The costs of a lithium-ion battery pack fell
65 percent from 2010 to 2015, and they are expected to drop below $100 per
kilowatt-hour over the next decade. Car-sharing and ride-hailing services are
already at work in hundreds of cities around the world, enabled by smartphones
and backed by substantial venture capital. An array of established automotive
and technology companies, as well as intriguing start-ups like nuTonomy and
Zoox, are testing self-driving capabilities, with the aim of providing
door-to-door travel, with no human intervention required.
Second, and just as
important, trends in related areas reinforce one another. Urbanization is
expected to increase average city density by 30 percent over the next 15 years,
stretching existing systems as demand rises. Urban planners and residents are
putting livability and sustainability higher on their agendas. Increased
connectivity is opening the door to multiple shared-mobility options and could
also help to smooth traffic flows.
Looked at in isolation,
each trend is significant. Their combined impact, however, will prove to be
truly powerful. For example, more shared mobility could boost electric-vehicle
(EV) sales because shared vehicles are used more intensively, improving the
economics of ownership. In turn, higher EV production could accelerate
innovation and reduce the cost of batteries. That opens up applications in
adjacent systems, such as distributed storage. And the plummeting cost of distributed
power generation could improve the greenhouse-gas abatement potential of EVs,
because they would get more of their juice from low-carbon sources. In these
and other cases, there is a powerful dynamic of mutual reinforcement at work.
It’s not just one oar in the water—but lots of them, all pulling in the same
direction.
The future of mobility in three models
Today, a small number
of cities, such as Amsterdam, Singapore, and Stockholm, are singled out as
having effective mobility. With varying degrees of emphasis, they have
efficient public transit, encourage cycling and walking, and have managed to
limit congestion and pollution. By 2030, we expect a number of additional
systems to be at the leading edge of the next phase of advanced mobility.
In broad terms, the
best will combine shared mobility, autonomy, and electrification with
integrated energy systems, public transport, and infrastructure. In specific
terms, cities will navigate these possibilities differently. Local
conditions—such as population density, wealth, the state of road and
public-transit infrastructure, pollution and congestion levels, and local
governance capabilities—will determine what changes occur, and how quickly.
For the near future in
cities leading the advance, we envision three mobility trajectories, with
trends such as sharing, autonomous driving, and
electrification all moving forward at a different pace. Each is suited to a
specific type of metropolitan area, whether it be a dense developed city, a
suburban sprawl, or an emerging metropolis.
Clean and Shared. Delhi, Mexico City, and
Mumbai are examples of densely populated metropolitan areas in developing
countries. They are all experiencing rapid urbanization, and they all suffer
from congestion and poor air quality. For cities like these, the widespread use
of self-driving cars may not be an option in the short or medium term, because of
poor infrastructure, interference from pedestrians, a variety of vehicles on
the road, and a lack of clear adherence to traffic regulations. The approach
most likely to apply is a shift to cleaner transport, in the form of EVs, while
also limiting private car ownership, optimizing shared mobility, and expanding
public transit. In conjunction with some connectivity and autonomy, traffic
flows and safety could be enhanced. According to our research, if relevant
Asian cities move toward this model, by 2030 shared vehicles could account for
almost half of passenger miles due to a combination of greater utilization and
more passengers per trip.
Private Autonomy. There are many cities around
the world where development and commuting patterns have increased sprawl
significantly. In such cities, having a car is all but essential. That will
likely remain the case for the foreseeable future. However, there are genuine
costs to this way of life; congestion in Los Angeles costs the city an
estimated $23 billion per year.1
To do better, we
envision consumers in these cities embracing new vehicle technologies, such as
self-driving and electric vehicles. Dedicated road space, for example, could be
allocated to self-driving vehicles. Connectivity could make it easier to
implement demand-driven congestion charges, which could increase road capacity
while limiting new construction. Car sharing and ride hailing could emerge as
complementary options but would not replace the private car on a large scale.
There is a possible
drawback to this scenario: with lower marginal costs to travel an extra mile in
an EV, and without requiring a driver’s attention thanks to autonomy, the
demand for mobility could increase and thus add to congestion. Passenger miles
traveled could grow 25 percent by 2030, with the majority attributable to
additional autonomous travel in private vehicles.
Seamless Mobility. This is the most radical departure from today’s
reality. In the near term, it is likeliest to emerge in densely populated,
high-income cities such as Chicago, Hong Kong, London, and Singapore.
In this system, mobility is predominantly
door to door and on demand. Travelers have many clean, cheap, and flexible ways
to get around, and the boundaries among private, shared, and public transport
are blurred. Mobility is delivered through a combination of self-driving,
shared vehicles, with high-quality public transit as the backbone. EVs become
far more common, spurred by economics, consumer interest, incentives, and the
creation of low-emission zones. And all this is enabled through the use of
smart software platforms that manage multimodal traffic flows and deliver
mobility as a service.
In a seamless-mobility system, people
would potentially travel more—likely by 20 to 50 percent—because it is cheap
and easy. However, the number of cars would likely remain the same or decline,
due to the high level of sharing and significantly higher utilization. EVs
could account for as many as two-thirds of vehicles on the road, while those
capable of self-driving may exceed 40 percent.
Knock-on
effects
Combined, these three models could apply
to around 50 urban areas globally—representing some 500 million people—but the
majority of cities are expected to develop more incrementally. Cities are most
prone to accelerated uptake based on a ranking of metrics, including income,
population, government effectiveness, level of public-transit development,
congestion, and pollution. Each model can deliver significant benefits, such as
saving time, reducing congestion, and improving air quality. We quantified the
possible cumulative societal benefits of each model until 2030: $2,800 per
person for Clean and Shared, mostly in the form of improved safety; $3,300 for
Private Autonomy (boosting 2030 GDP by 0.9 percent); and $7,400 per person for
Seamless Mobility (boosting 2030 GDP by 3.9 percent).
To take full advantage of these benefits
and avoid the pitfalls, the public and private sectors would need to work
together, while city officials would need to be willing to reconsider how they
conduct their own business. For example, sharing and autonomy could cannibalize
public-transport systems, and cities may consider whether it makes sense to
partially shift ownership to private shared-mobility providers. Governments may
also want to rewrite fuel and power taxation and to use the opportunity of
connectivity to revisit how infrastructure is priced.
These new mobility models will also
require a number of sectors to do some hard thinking in order to find new
opportunities—and to avoid some major risks. In the power sector, for example,
EVs could represent 3 percent of electricity demand globally, and nearly 4
percent in Europe, by 2030. Differentiated time-of-use rates and investments in
charging infrastructure could help utilities to mitigate negative grid effects
from EV charging. EVs could also play a role in reducing curtailment as
solar-photovoltaic and offshore-wind generation increase.
The automotive sector faces a future that
could be fundamentally different from its past and may need to consider moving
from using a pure product-ownership model toward providing a range of
transportation services. EVs, of course, are a direct threat to the
internal-combustion engine. Gasoline retailers should be thinking through how
to further monetize current assets and how to capture future value through new
propositions around convenience retail, the connected car, fleet services, and
electric charging. For tech companies, the three mobility models offer a world
of opportunity. As the use of connectivity and autonomy increases, so, too,
does the need for sensors and software. The data generated could be highly
valuable in and of itself.
Moving
into the future
In cities from Tokyo to Vancouver, the
reality of changing mobility is already apparent. More shifts are coming. These
changes will allow people to travel more efficiently, more cheaply, more often,
and in different ways. But the future is not set, and there is a strong role
for the public and private sectors to help avoid pitfalls associated with
increased congestion, air-quality concerns, and other potential negative
outcomes.
To best capture the benefits, the public
and private sector—at a local and global level—need to prepare for the future,
not wait for it. Governments may want to anticipate these new mobility models
by crafting regulations consistent with consumer-friendly technological
developments that also promote larger public goals, such as clean air and
reduced congestion. They need to think ahead, with regard to both replacing the
possible loss of fuel-tax revenue and reviewing their connection with the
private sector. Strong partnerships that make it easy to blend public transit
and private mobility will likely produce the best solutions.
Why does this matter? Because getting mobility right
could be a significant competitive advantage for cities. This shift can help
clear the air of pollution and reduce traffic deaths. It is an opportunity to
improve the quality of life—day in, day out—for billions of people.
By Eric Hannon, Colin McKerracher, Itamar Orlandi, and Surya
Ramkumar
http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/an-integrated-perspective-on-the-future-of-mobility?cid=other-eml-alt-mip-mck-oth-1610
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