Mobility: looking ahead and preparing for the second great inflexion point

door Camille Zaaijer | sep 17, 2019 | Articles, Strategy

Today’s overcrowded infrastructure network causes lots of problems. As such, major delays and road frustrations are part of every commuter’s journey. In The Netherlands, we spend an average of 65 hours a year in traffic jams. This amount will further increase with more and more cars entering the roads. Yet, current developments and innovations in the mobility industry could resolve this future scenario. Smart roads, interconnected self-driving vehicles and productive travel time are another potential future of our mobility.

Mobility as we know it is on the verge of a revolution. But how will this impact your industry? How can you be prepared? This article provides the trends and developments surrounding mobility. We will provide you with insights into what possibly lies ahead and how you can prepare your organization.

Ladies and gentlemen start your engines; the second great inflexion point is upon us.

A glance at the future of mobility
The way we see and perceive mobility today – individually owned vehicles, gas stations, traffic jams and driver’s licenses – will drastically change in the coming dozen years. This change in the mobility industry is referred to as the second great inflexion point. Like the first in the early 20th century – that brought us cars and made horses redundant – it has the potential to shake up the entire industry. Our daily commute will be quite different in the future. The next story shows what that commute can look like.

A future perspective on a commuter’s journey
It is 8 a.m. and Mark is heading to the office. While he is getting ready to go, he checks the available travel options on his smartphone. Like millions of other travellers around the world, he no longer owns a vehicle to get from point A to point B. Mark has an integrated mobility contract that enables him to enjoy different modes of travel. Advanced analytics combines his travel history, current circumstances, data of millions of other travellers and real-time information from different modes of travel across the region to provide a list of tailored seamless travel options.

Mobility has become a service and is paid by the kilometre. Insurance companies cooperate with the service providers and offer insurances tailored to each specific trip.

Mark decides to start the day with some exercise and grabs a bicycle just outside his building. The bicycle rack outside his building is just one out of the many around the city and the result of close cooperation between the public and private sector. City planners and commercial organizations work closely together to ensure seamless infrastructure within the city. From bicycles and bicycle racks to specialized autonomous vehicle lanes.

Once arrived at the station Mark places the bicycle back in a rack and walks up to the platform where the train is ready for departure. Physical assets like buildings, train platforms and roads all around the city are increasingly smart and interconnected. Ticket scanning before boarding the train is no longer necessary. The train platform has noticed Mark through real-time monitoring. Inside the train, content providers offer different options of entertainment from watching shows and sports games to digital games. Again, public and private sector work closely to provide the content through subscriptions or freemium options supported by advertisement. Mark decides to watch the highlights of last night’s soccer match and remembers he needs some groceries. In his app, he orders the products he needs which will be dropped later that day at a handpicked spot. He checks which option he will take back home after work and decides that he wants his groceries delivered at the station near the office.

At the end of the day, Mark picks up his groceries from the pick-up location of his choice. Mark uses an app on his phone to access his groceries. He decides to take an autonomous pod home so that he can finish the presentation that is planned for the next morning. The electronic, driverless and shared pod is part of a large vehicle network supported by fleet operators and service providers. The pods drive in their lanes equipped with kinetic energy road harvesting that provides constant energy.
When Mark boards the pod it automatically recognizes him and his needs using data from the customer interface in the app. Based on his agenda the pod knows Mark has an early presentation the next day which he has not yet finished. The large window in the front automatically switches to a screen on which Mark can work during his journey back home. Once back home, Mark can use his evening for relaxing. The presentation is finished and there is no need to get groceries.

Future mobility; beyond transportation
The previous sketched journey is just one version of what could be. The exact situation of future mobility is yet to be figured out. What we do know is that different developments and innovations happening right now will change the game and its players. New collaborations and business models will emerge. Expected is that two very different business models will exist side-by-side; ‘traditional’ carmakers and mobility service providers.

The traditional carmaker will continue the current model of manufacturing increasingly improved hardware, the car itself. The further electrification and autonomation of cars develop quickly and expand the potential and capabilities of both the car as the manufacturer. As governments around the globe are actively trying to reduce CO2 emissions of vehicles through subsidies for electronic cars (ECs) electronification of cars will exponentially increase in the coming decade. Not only global governments are pushing for more electronic cars. Major manufacturers also intend to push production, aiming to bring the percentage of ECs above 50 per cent of total production. The push from governments and the market in combination with technological improvements of battery life, lower costs of electricity – as opposed to gasoline and diesel -, maintenance and total cost of ownership are expected to generate shifts towards ECs across entire fleets.

Next to their electronic transformation, cars are becoming ‘smarter’ and more ‘autonomous’. Although in 2016, only around 1 per cent of the vehicles sold were equipped with partial autonomous-driving technology this percentage is expected to increase rapidly in the coming years. Major manufacturers, as well as governments, plan to have autonomous technology on the road by the first half of the 2020s. The United States passed its Self Drive Act, Google’s Waymo launched a fleet of autonomous commercial taxis and Uber plans to do the same this year. By 2030, 20.8 million autonomous cars are expected to travel the roads in the United States and 80 per cent of all European, US and Chinese kilometres will be at or approaching self-driving. Drivers no longer need to keep their attention on the road and can use their travel time productively.

Essential for car autonomy and the overall character of the new mobility ecosystem is interconnectedness. Where today’s cars use driver’s profiles to connect to services provided by external platforms like Android Auto and Apple CarPlay, these technologies will become more advanced in the coming years. More and different systems will connect transforming them from reactive to proactive systems offering personalized infotainment and services. It is anticipated that by the first half of the 2020s connectivity systems evolved in so-called ‘virtual drivers’, which through cognitive artificial intelligence (AI) can anticipate on driver’s and passenger’s every need.

Next to the traditional carmakers, mobility service providers will rise. They are not just car manufacturers, but providers of a mobility platform consisting of different customer services based on the customer interface. The mobility service providers will work closely with different partners. Collaborations with retailers – ordering and pick-up of products -, financial organizations – trip specific assurances – and media organizations – on-board infotainment – are just a few examples. The mobility service providers decrease commuter’s costs of ownership and based on shared mobility the costs of subscriptions are relatively low. The switch from ownership to mobility as a service (MaaS) is expected to grow rapidly. By 2030 this segment is expected to be worth $1 trillion globally.

While both business models will compete against a group of different players, both will have a major role to play. The future success of the sketched new mobility ecosystem will only be achieved by exceptional collaboration between different markets, both private and public. OEMs, Telecom, Healthcare, Mobility Service Providers, Energy, Fleet Service Providers, Finance, Insurances, Suppliers, Media and Entertainment, Software and Technology, Infrastructure, Workshops, Retail, Government and Customer should work closely together to solve potential problems along the way.

Are your engines running and ready to race?
The future of mobility is exciting. The opportunities are endless. Whatever the transformation, it will likely impact most industries. Even if you do not consider cars or transportation close to your core business, you will be confronted by the increasingly far-reaching new mobility ecosystem.

The first effects will be quite straightforward, like changes in logistics. But further down the road, the effects will reach beyond the obvious. That is why we have listed some first points to prepare your business for what is coming.

1. Closely watch and adjust your mirrors
Transformation is coming and it is coming fast. The changes brought by the transformation provide both threats and opportunities for those outside the automotive, transportation or energy sector. Future competitors might come from totally different corners than ever expected, the mobility ecosystem for example. Just consider the effects of the increased number of ECs on the battery demand and thus other products containing batteries.

To be prepared for action figure out your business’ role in the new mobility ecosystem and how changes might impact your business. Challenge yourself and your co-workers by discussing how you foresee the new landscape, who you are playing against and how your business will fit in.

2. Objects in your mirror are closer than you think
Innovations and technological developments appear increasingly fast. It seems like yesterday the first smartphone was released and now, not many years later, we cannot think of a world without them. The smartphone completely changed the world in just over a decade. The time frame surrounding innovations and developments in mobility is shorter than you think. So be prepared, take the advantage and start thinking about potential strategies to reap benefits and opportunities that come along with the transformation. Collect knowledge, create goals and keep track of your performance.

3. Oversee the road ahead and merge where needed
The interconnectedness that is leading characteristic of the new mobility ecosystem brings new and more complex dynamics and customer needs. In the new ecosystem, no business will be able to capture, defend and win in all fields. Cooperation is the key to meeting customer needs and success. Yet, many organizations are not prepared for close cooperation with other ‘competing’ players in the field.

To make sure your business is ready to map the road for your business and identify unfilled spots down the road. Next, identify potential partners that could be of help for filling these spots and what ‘gives’ and ‘takes’ the cooperation need. Think and discuss the strategy you will pursue and how you will position your business.

4. Sharing is caring for business
The social element of the mobility ecosystem has always been an important one. Today’s environmental responsibility from both private and public organizations pave the way for ECs to rise. With the second great inflexion point upon us, different social issues should be discussed and resolved by cooperation between private and public organizations. To make sure the new mobility ecosystem will be safe for the public new regulations will emerge.
To be successful in the new ecosystem make sure your business is aware of potential future laws and regulations that lay ahead. Finally, to become successful be customer-centred. Consider what your business not only brings you but society as well. Leading characteristic of the new mobility ecosystem is interconnectedness, so make sure your business is involved and most importantly connected.

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