Navigant Research Blog

How Will Wireless Connectivity, Vehicle Autonomy, and Electrification Converge with On-Demand Mobility?

— June 13, 2016

CarsharingIn the future, urban transportation is expected to be electric, autonomous, and on-demand. This is the vision that captures the major trends in mobility and is one that companies like Uber and Google already appear to be working toward. Navigant Research believes that on-demand shared transportation services—whether carsharing, ride-hailing, bikesharing, or even public transit—will converge with the major vehicle technology trends of electrification, wireless connectivity, and autonomous driving capability to create a low-carbon transportation system for cities over the next 25 years. Navigant Research has covered these trends in its recently published Transportation Outlook: 2025 to 2050 white paper and will discuss them further in a June 14 webinar, Changing Models for Urban Mobility.

Convergence Underway

This convergence is happening already. The first piece, wireless connectivity, is a key building block technology for a future where personal transportation transitions to mobility as a service. By 2025, Navigant Research forecasts that more than 1.2 billion vehicles globally are expected to be connected to their surroundings and/or to each other through either built-in or brought-in communications technology. At a baseline, these systems will provide real-time safety alerts and traffic notifications to drivers; the more mature and full-featured systems will support semi-autonomous driving systems. In this same timeframe, the number of vehicles equipped with some form of telematics will also grow rapidly. By 2025, most new vehicles in developed markets are likely to have telematics offering various types of services to the driver. Today, this type of connectivity is already central to electric vehicles (EVs), which have navigation systems that alert the driver to available charging stations and provide battery charge status updates.

The convergence is also already occurring between vehicle electrification and shared mobility. EVs are an increasingly popular option in carsharing schemes in cities. Indeed, city officials looking to control pollution in congested city centers are actively encouraging the use of EVs in carshare services. For example, officials in London pushed hard to bring to the city an electric carsharing scheme similar to the successful Autolib’ service in Paris; the new service opened in spring 2016. Carsharing services already see a greater percentage of EVs in their fleets than is found in the wider passenger car population. Navigant Research estimated that plug-in hybrids and battery EVs represented more than 15% of all vehicles in carshare services as of 2015. While these EVs are largely concentrated in a handful of services—such as the all-electric Autolib’, all-electric carshare companies in China, and in some of Daimler’s and BMW’s carshare services—EVs are expected to expand to many more carshare operations through 2025 and beyond. One reason for this is that carsharing will be a growing option for automakers to put certain types of cars into service—primarily fuel-efficient, electric-powered, and autonomous—and many OEMs are expected to operate these transportation services themselves as a way to offset reductions in revenue due to falling vehicle sales in urban areas.

Mobility as a Service

Carsharing is a key building block for the future of mobility as a service, and is now a well-established industry that feels familiar rather than new. But in fact, this business is at the early stages of major upheaval that will change the role it plays in urban mobility. First off, automakers are entering the market in earnest, and it is expected that almost all major automakers will be offering some type of shared vehicle service by 2025. A second disruptor is the rise of the one-way operational model. With drivers no longer required to return vehicles to the same parking spot where they picked it up, carsharing significantly expands its use case for city residents. Carsharing now can provide true on-demand mobility and be used for spur-of-the-moment travel needs and for shorter one-way trips than is typical for conventional round-trip carsharing. This new operational model makes carsharing more like the third major disruptor in the shared vehicle sector: the explosive popularity of ride-hailing apps like Uber and Lyft. While these two types of services can be seen as competing, they are better thought of as complementary, each offering a different type of experience for the customer. Carsharing acts as a replacement for owning a car, whereas ride-hailing is more directly a replacement for conventional taxi services. One-way carsharing and ride-hailing services may well compete for customers, but Navigant Research believes that the urban mobility model of the future will have both carsharing and ride-hailing.

Autonomous Opportunity

Both services probably will be early markets for autonomous driving technology, the final piece of this low-carbon mobility as a service model. It is likely that autonomous vehicles will initially be integrated into shared fleets in a controlled and regulated setting. Sites like central London, Paris, and Singapore are anticipated to be among the first. From 2025 on, a number of entities—including carsharing companies, taxi fleets, ride-hailing companies, and automakers—are expected to be operating autonomous fleets. In particular, automakers likely will embrace the autonomous fleet idea as an extension of their current involvement in carsharing schemes and will seek to incorporate them into their EV models. GM has announced it will begin offering autonomous Chevrolet Volts for its employees to drive at its Technical Center in Warren, Michigan in late 2016.

According to the United Nations, by 2050, as much as 66% of the world’s population is expected to live in urban areas, and the individually owned vehicle will probably become a rarity in most large cities. The possibility that shared mobility may lead to less use of public transit has been an oft-cited concern among city officials and sustainable transportation advocates. A 2016 report by the Shared-Use Mobility Center found that services like carsharing and ride-hailing are actually complementary to public transit. The report, which focused on users in seven U.S. cities, noted that the people that use shared modes of transportation the most were the most likely to use public transit and to own fewer cars. Navigant Research also believes that, from 2025 onward, public transportation itself will become more of an on-demand service, which will use buses much more efficiently. Connectivity and data analysis will enable the efficient dispatch of vehicles to where passengers need them, keeping idle time to a minimum. These services can be fully integrated with the other types of on-demand options in the city, making multi-modal travel more robust and seamless.

 

Fuel Cell Vehicles Join the Carsharing World

— May 19, 2016

CarsharingGerman hydrogen company Linde is experimenting with a solution to the infrastructure problem for fuel cell cars. This summer, the company will launch an all-fuel cell vehicle (FCV) carsharing service in Munich. For this trial program, Linde is partnering with Hyundai to provide the fleet of FCVs. The service, called BeeZero, will have 50 fuel cell-powered ix35 crossover SUVs (known as the Tucson in North America), Hyundai’s current entry into the fuel cell market and one of only two FCVs commercially available today.

Linde is in good company in offering a carsharing service with zero tailpipe emissions, as a number of carshare programs around the world specialize in battery electric vehicle (BEV) fleets. In its 2015 Carsharing Programs report, Navigant Research estimated that around 20% of all carsharing vehicles in use globally were plug-in electric vehicles (PEVs)—mostly pure BEVs. Most of these EVs are in a handful of programs where the EV is a part of the service’s brand identity. The most famous is probably Autolib’ in Paris, run by Bollore. The Kandi carshare service in China also uses a fleet of micro EVs. Both Daimler and BMW’s carsharing services have deployed the automakers’ EVs, but not exclusively. Daimler recently switched out all EVs for gas cars in its San Diego carsharing service; the reason given was a lack of charging stations. (It will be interesting to see if the cars are reinstated once utility San Diego Gas & Electric launches its EV charging pilot program.)

The Challenge of Charging

Charging is one of the challenges for battery-powered carsharing vehicles, and likely explains at least in part why few carsharing companies integrate BEVs into their larger fleet of gas cars. Even if chargers are available, there can be problems with ensuring they are properly plugged in and that the charge stays full.

FCVs operating in fixed areas have the advantage of requiring a relatively small number of strategically located refueling stations in a city while offering longer ranges than EVs. Navigant Research predicted the introduction of fuel cell carsharing services for this reason in our recent white paper on the future of transportation. This makes an easier pathway to market for FCVs than having to build a network of refueling stations to service private car ownership.

Longer Ranges

Linde is also promoting the advantages of the longer driving ranges offered by FCVs. The Hyundai ix35 has a range of over 350 miles on a tank of hydrogen. While this is indeed a key benefit of fuel cell cars, it will be useful to see how much of a benefit this is for a carshare user. Carsharing services have a few typical use cases: short inner-city trips (the kind being served by one-way carsharing operations); planned trips with slightly longer range needs; and long-distance trips, typically on weekends. The BeeZero service would presumably be used for the latter two cases, but long-distance travel might require use of a hydrogen fueling station at the destination.

Linde has said it will use BeeZero to gather information on “day-to-day fleet operations” of fuel cells and hydrogen that can be fed back into its hydrogen development efforts. BeeZero presumably also offers Hyundai not only with an avenue to deploy more of its fleet of fuel cell ix35s, which have seen limited uptake to date, but also a chance to take lessons learned into its FCV development efforts. In the long-term, it is possible to envision FCVs being deployed in carshare services sponsored by automakers and infrastructure providers in cities where only low carbon or even zero emission vehicles are permitted.

 

A New Business Model for Fuel Cell Vehicles

— May 11, 2016

CarsharingWith the first carshare program served exclusively by fuel cell vehicles (FCVs) set to open in Munich, Germany later this year, it is time to examine how FCVs might be able to transition from early commercialization to large-scale deployment. For close to a decade, FCVs have been inching forward along the path to broader commercialization. However, they are still vehicles that automakers only make available in limited production runs and are typically only for lease for limited periods of time.

Toyota is one car company that is making the leap to selling its fuel cell car outright. With a suggested retail price of $57,500, Toyota’s Mirai has been priced at a level that (when combined with incentives) could allow it to compete against luxury plug-in electric vehicles (PEVs) in terms of price. However, the Mirai is being sold in an environment where battery electric vehicles (BEVs) are able to offer longer ranges and much lower prices than other long-range PEVs currently available.

Mixed Results

Toyota has said that it aims to have 3,000 Mirai models in operation in the United States by the end of 2017. As of the end of 2015, the automaker had around 2,000 orders in the United States alone, and Consumer Reports gave the Mirai a favorable write-up. However, Toyota is still closely managing sales to ensure that customers who may lease it have driving habits that match the limited availability of hydrogen refueling. Indeed, the company has been delayed in delivering some cars to its customers, citing the lack of fueling stations needed to serve their customers as the reason.

The mixed results of the Mirai rollout thus far—real interest followed by delayed delivery—highlights the problem OEMs will face in commercializing fuel cell technology. Although BEVs also faced limited public charging availability when they were introduced, early adopters were those that could charge up at home, an option not available for FCV customers. This hurdle is one reason why Navigant Research’s 2015 Fuel Cell Vehicles report forecast modest FCV sales over the next 5 years. Nevertheless, Toyota is forging ahead with its commitment to fuel cell technology. The company recently said it would introduce a new, lower-cost FCV ahead of the 2020 Olympics in Tokyo.

Are there other ways to get around the infrastructure barrier? U.K. company Riversimple is looking to solve the problem by embracing the trend toward on-demand mobility, as is the previously mentioned Munich fuel cell carshare pilot. Riversimple wants to use the small city car segment as the entry point for FCVs in the commercial market. Instead of building a car for customer ownership, the company is developing a two-seater runabout (called the Rasa) that would operate within a region and fill local driving needs.

Riversimple’s business model is to place a fleet of cars into service in a locality and offer the use of the vehicles as a paid service, rather than selling or leasing the cars. This strategy helps bypass the need for an extensive network of refueling stations; instead, a few stations—perhaps even just one—could serve a single fleet of FCVs. Riversimple unveiled its rather unusual looking car earlier this year and has also launched a crowdfunding campaign.

Mobility as a service is a growing trend; it will be interesting to see if this can be successfully combined with FCVs to help push the technology past the infrastructure barrier.

 

Using Open Data to Close Mobility Gaps

— April 13, 2016

Mass rapid transitCan the open data movement help create better access to high-quality transportation services not just for the urban elite but also for the underserved? That’s what the U.S. Department of Transportation (DOT) is hoping will happen thanks to a new public transit data gathering initiative. In March, DOT Secretary Anthony Foxx announced that the agency is seeking to create a national transit map using transit route data from operators across the country.

Many U.S. transit agencies have already joined the open data movement, driven in part by the opportunity to have Google Maps provide users with transit travel options. A 2015 report by the U.S. Transit Cooperative Research Program (TCRP) on the state of open data in public transportation noted that between 2009 and 2012, many of the largest transit agencies in the United States created application programming interfaces (APIs) that third-party software developers can use to access real-time data feeds of bus and train location information. Many transit agencies have developed the GTFS (or General Transit Feed Specification) feeds that Google Maps uses to provide its transit directions.

National Snapshot

A new development is combining this data into a single map of transit in the United States. According to the DOT, its National Transit Map will provide a comprehensive, national snapshot of “where transit stops are, how frequent transit service is, and where transit routes go.” Note that this is all static information—this National Transit Map won’t take the place of real-time data used by smart phone app developers for individual transit systems. However, the DOT hopes that researchers and advocates will use the data to show where transit coverage is strong and where it is lacking. This is actually the kind of information that’s been available for years on U.S. roadways through the U.S. Federal Highway Administration (FHWA). The FHWA provides data on over 450,000 miles of U.S. highways that can be used to determine accessibility and usage rates.

The United States is joining just a handful of other countries that have open data on national public transportation services, rather than on a transit system level. The United Kingdom was one of the first countries to introduce a national public transportation database. The National Public Transport Data Repository captures every bus, train, and coach trip that occurs in the same week in October across the country. The repository has data from every year from 2004 to 2011, but has not been updated since 2011. When it was made public, the data was used for, among other things, an analysis of which parts of the country lagged in bus service. Sweden’s TrafikLab provides data on the country’s public transport systems. In Germany, transit data was pulled together by a group of activists, rather than the government.

Untapped Potential

There is still tremendous untapped potential in the data on transit services available to the wider public. The U.S. effort to collate this data and make it easy to access is an admirable step in this direction. While DOT secretary Foxx has expressly said his goal is to close the transit access gap, unstated is how this would occur. Presumably through encouraging additional investments in traditional public transit systems, but it would be an interesting exercise to overlay the transit coverage to data on shared mobility options. This data is largely held by private companies, however. There have been some initiatives to let cities access ride-hailing data, such as Uber’s partnership with Boston, but it is likely to be very difficult to access most of this information at a larger scale.

 

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