Both now and in the future, urban mobility poses a massive challenge, but also a great opportunity for business. Drawing on Arthur D. Little’s study, ‘The Future of Urban Mobility’, carried out together with UITP (the International Association of Public Transport), this article briefly summarises some of the key trends, and focuses on the opportunities for businesses to benefit as partners of extended urban mobility ecosystems.
The urban mobility challenge
All around the globe, people are flocking to cities. In 2007, for the first time, UN population figures showed that more than half of the world’s population lived in urban areas. That proportion is set to rise to 60% by 2030 and 67% by 2050. This will be accompanied by massive growth in the number of individual journeys taken daily, leading to increasing demand for both passengers and goods mobility, which is expected to triple by 2050. (See Table 1.)
At the same time, customers’ expectations for fast, reliable, convenient and individualised services have been increasing, as has been the mix of transport modes and services offered to them, a trend that is likely to continue. Similarly, customers are increasingly concerned about the sustainability of their modes of travel, and some are prepared to avoid certain transport methods because of this.
If the world fails to change its mobility habits, the future could be bleak: estimates suggest that by 2050, urban dwellers will spend, on average, twice as long in traffic jams as they do now, air and noise pollution will increase massively, urban mobility systems will use five times more of the planet’s bio capacities than they did in 1990, and overloaded transport infrastructures will present a major obstacle to economic growth.
Thankfully, progress in improved public transport is already being made in many cities, but public financing limitations and system complexity remain challenges. Addressing this requires coordinated effort from many public and private transport stakeholders, and system innovation is the key. Technological advances such as digitalisation offer huge potential opportunities for specialised players, not only in the public transport supply chain, but also in areas such as automotive, financial services, telecoms, and other digital sectors. However, the complexity of setting up ecosystems poses a barrier to innovation: in particular, who pays and who benefits? In other words, what will the future business model(s) of urban mobility be that effectively drive innovation across the urban mobility ecosystem?
Arthur D. Little’s Urban Mobility Index assessed the mobility maturity and performance of 84 cities worldwide, based on a set of 19 criteria. The mobility score per city ranges from 0 to 100 index points; the maximum of 100 points being defined by the best performance of any city in the sample for each criterion. (See Table 2.)
The results are shown in Table 3 and find that most cities are badly equipped to cope with the mobility challenge ahead. It may be seen that although significant progress has been made in areas such as shared mobility, sharing of cars and bikes, penetration of mobility smart cards and development of integrated mobility platforms, the global average score is still only 43.9 points. This means that, on average, cities achieve less than half the potential that could be reached today when applying best practice across all operations. Even the city with the highest score, Hong Kong, with 58.2 out of 100, still has a significant way to go.
Barriers to progress
A comprehensive review of technologies reveals sufficient availability of solutions to address mobility challenges. So, given the scale of the looming crisis, what’s stopping further progress from being made?
The two main barriers to superior mobility performance relate to the inadequacy of urban mobility strategies and the fragmented structure of urban mobility systems.
Existing urban mobility strategies do not fulfill expected requirements. Many lack clear vision and strategy, mobility interlinks poorly with other urban strategies such as CO2 reduction, regional mobility systems have limited integration, and mobility strategies lack private sector engagement. Structure is too fragmented, not allowing for system-level innovation and collaboration, and can even be hostile to innovation and lack the agility to adapt to changing demands.
Tomorrow’s superior mobility systems will require a network of interconnected mobility solutions with “one face to the customer”. In order to achieve this, public transport authorities and operators will need work closely with each other and set up ecosystems with other players in order to deliver innovative mobility solutions.
Four dimensions for sustainable urban mobility systems
Our research into good practices around the world’s cities shows four key dimensions that need to be addressed to put sustainable urban mobility systems in place:
- Visionary strategy and ecosystem: City authorities need to develop a political vision and clear urban mobility objectives in order to inform strategic priorities and investments. Transport authorities also need to consult, engage and win support from other (public and private) mobility stakeholders to ensure broad backing from all parties involved.
- Mobility supply (solutions and lifestyles): Cities need to further extend their mobility offerings, in terms of both capacity and quality of services, and adapt from “delivering transport” to “delivering solutions”.
- Mobility demand management: Mobility demand management is a delicate discipline that can easily meet strong resistance if not properly planned and executed.
- Public transport financing: Devising the right funding mix is critical, and securing adequate funding in the context of budgetary pressure means thinking outside of the box.
A system-level approach across these four dimensions is critical: sustainable improvements to a city’s mobility performance requires simultaneous improvement of each of these four dimensions, since the weakest link will influence overall mobility success.
Due to the complex nature of the problems at hand, separate optimisation at sub-system level has limitations and will generally not impact overall urban mobility performance. System-level collaboration between multiple stakeholders of different types is often required, leading to numerous partners being involved in urban mobility ecosystems. As well as the usual groups, such as transport authorities, transport operators and infrastructure providers, other mobility providers and specialised players from other sectors can contribute to, and get benefits from, urban mobility ecosystems, as shown in Table 6.
Ultimately, the success of any urban mobility strategy depends on how well ecosystems can be shaped to encourage innovative business models and integrated solutions. In an effective mobility ecosystem, all groups involved are clear on what their roles are and how value will be created. This implies mapping financial streams (e.g. sales revenues and concession fees) between the ecosystem’s core members, as well as assessing the value creation on environmental and social levels.
Development of integrated mobility platforms for personal mobility typically requires negotiation of a complex web of relationships with a wide mix of public and private stakeholders, as illustrated in Table 7.
In this integrated ecosystem, a critical role is that of “integrated mobility platform operator”, responsible for planning, booking, payment and billing, thereby ensuring “one face to the traveller”. From a business point of view, integrating different transport modes while ensuring real-time interaction with the customer requires two things. Firstly, creation and operation of a platform that, via application programming interfaces, integrates the routing, booking and payment services of different mobility providers. And secondly, the operation of a smartphone app that enables end-users to access the platform and thus plan, book and buy their multimodal journey with a single click.
Key success factors for setting up integrated mobility platforms include extended ecosystem stakeholder management, devising a profitable business case, and technology integration.
