Navigant Research Blog

Realistic Goals, Measurable Outcomes Lead to Columbus Smart City Challenge Win

— July 21, 2016

Bangkok SkylineOhio won its first major victory of the year when LeBron James led the Cleveland Cavaliers to the state’s first major sports title in over 50 years. Soon after, the city of Columbus, Ohio was officially announced as the winner of the U.S. Department of Transportation’s (DOT) Smart City Challenge. The city is set to receive a total of $140 million, with combined contributions from the DOT ($40 million), Seattle-based company Vulcan ($10 million), and a group of local businesses called the Columbus Partnership ($90 million).

One of the keys to Columbus winning the competition and beating out the better-known technology centers of San Francisco, Austin, and Denver was the city’s ability to demonstrate that its plan would result in increasing poor residents’ access to new transportation options. The city has proposed numerous solutions in this area. A few of the key proposals were:

  • An autonomous vehicle program that would transport residents from the Linden neighborhood—which has 3 times more unemployment compared to the city average—to a nearby employment center
  • The creation of transit cards for low-income populations to use for ride-hailing or carsharing services, with or without having smartphones or bank accounts
  • The building of smart corridors through wireless technology, which enables a new bus rapid transit (BRT) system that is more safe and efficient for high numbers of users (it’s important note that Columbus is also the largest city in the United States to not offer rail service)

Several of these transport initiatives are also expected to be integrated with improved access to healthcare services to help address the high infant mortality rates in many of Columbus’ poorer neighborhoods.

Other components of Columbus’ transport plan include an increase in electric vehicle (EV) charging stations throughout the city, enhancing smart grid technology by using EVs as distributed energy storage devices, expanding the municipal EV fleet, and securing 50 of the city’s CEOs to personally commit to buying and driving EVs, as well as installing charging stations for their employees.

Additional Funding Sources Also Crucial

While a focus on increasing poor neighborhood access to reliable and affordable transportation options was vital to the final awarding of the Smart City Challenge competition to Columbus, the $90 million pledged by the Columbus Partnership (if the city was to be selected) also played a major role. Financing the development of smart city projects continues to be the most significant challenge in the market, as outlined in Navigant Research’s recently published Smart Cities report. The guaranteed added investment by the Columbus Partnership made the city a highly realistic option for successful implementation and more likely to achieve the outcomes that were highlighted in its final proposal.



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City and Regional Governments Ramp Up Fight Against Climate Change

— June 20, 2016

BiofuelGlobally, climate action and greenhouse gas (GHG) reduction programs are becoming increasingly prevalent as electricity costs and climate change become larger areas of concern for residents. In North America alone, cities such as Boston, Los Angeles, Portland, San Francisco, Minneapolis, Vancouver, and Toronto have defined ambitious targets for improving sustainability and reducing GHG emissions and energy consumption.

While national aspirations were largely aligned during the United Nations Framework Convention on Climate Change COP21 Paris conference, the global partnership lacks meaningful implementation and enforcement mechanisms. In the United States in particular, climate change is heavily politicized, and little action is being taken on a national legislative basis to combat the problem.

Climate Action Plans of Selected Cities

Climate Action PLans of Selected Smart Cities_RC blog

(Source: Navigant Research)

To fill the gap from strong city action and low levels of national alignment, several state and provincial governments have recently taken bold action to combat climate change. The province of Ontario unveiled its new sweeping Climate Change Action Plan in June 2016. The initiative is expected to spend up to $8.3 billion on a range of clean technology programs, largely funded from the provinces’ cap-and-trade program. The Climate Change Action plan aims to quickly transition the province toward more energy efficient heating systems, electric and hybrid cars (via a rebate of up to $14,000), promote the conversion of diesel-powered trucks to natural gas, and help the industrial and agricultural sectors adopt low-carbon technologies.

State and Provincial Collaboration

The state of California, well-known for its clean energy leadership, has a cap-and-trade program that is linked to three Canadian provinces: Quebec, Manitoba, and Ontario. Cap-and-trade programs now cover 61.8 million people across North America—38.8 million in California, 13.6 million in Ontario, 8.2 million in Quebec, and 1.2 million in Manitoba. Each of these programs are designed to drive down emissions and set aggressive GHG reduction targets. Over 17% of the combined North American population (354.1 million people, with 318.9 million from the United States and 35.2 million from Canada) is now participating—knowingly or unknowingly—in a cap-and-trade program without any national or regional framework in place. This figure is anticipated to grow significantly as more states and provinces look to fill the void left by national governments by creating enforceable programs that reduce overall GHG emissions levels.

 

Toronto versus Austin: How City Regulations Can Make or Break Ridesharing

— May 31, 2016

Electric Vehicle 2Ridesharing apps such as Uber and Lyft are often less expensive and more convenient (i.e., faster responding) than taxis. This has resulted in an explosion of ridesharing businesses over the past several years; Uber alone is estimated to be worth over $60 billion. However, the rapid global expansion of ridesharing services has created a legal quandary in jurisdictions all across the world. In the United States alone, Uber is involved in over 150 lawsuits. While the conflicts between municipalities and ridesharing companies can be complex, the essential argument often boils down to this: Are ridesharing companies a distinct legal entity with their own set of rules, or should they be regulated like traditional taxi cab organizations?

A Tale of Two Cities

Two major cities with large ridesharing presences—Toronto, Ontario and Austin, Texas—were both recently met with threats of complete operational shutdown by ridesharing companies. Proposed regulations by both cities were deemed to be unfair by the industry if enacted. In Toronto, the regulations implemented ended up being reasonable enough for Uber to continue offering its services in the city. The same cannot be said for Austin, however, as both Uber and Lyft have completely ceased operations in the city, citing overly burdensome regulations.

To see how the regulations in Toronto were acceptable to the ridesharing companies and the ones in Austin were not, let’s examine some of the key measures instituted by both cities. In Toronto, numerous key regulations were introduced to level the playing field between Uber and established taxi services:

  • Taxis are now able to offer discounted rates (similar to Uber)
  • Taxis are now able to implement fare hikes during peak hours (similar to Uber)
  • UberX* fares will increase (must charge same base fare of $3.25 per ride as taxis, with a licensing fee of $0.30 per ride)
  • UberX drivers will have to pass a city-mandated background screening
  • UberX drivers need to have $2 million in insurance coverage and all-weather tires for winter
  • UberX vehicles must display some type of signage for identification (i.e., magnetic placard)

*UberX, where drivers use their private vehicles to transport passengers, is the cheapest and most common service from Uber. Some rules may differ for UberXL, UberSelect, UberBlack, and UberPool services.

While Austin had proposed rules that are similar to the regulations instituted in Toronto, the city added additional measures such as the mandatory fingerprinting of drivers, restrictions on where drivers can pick up and drop off passengers, and a time-consuming data reporting scheme. These seem to have been the deal-breaking regulations for Uber and Lyft.

Finding the Right Balance

Ridesharing companies undoubtedly enjoy benefits that are absent to traditional taxi cab companies due to the inherent advantages of the shared mobility business model. However, ridesharing deserves some recognition for innovating in an industry that has been relatively unchanged and void of outside competition for decades. Ensuring that city regulations aren’t overly burdensome on ridesharing companies is important — thousands of residents in Austin have been deprived a source of income, while many more have been deprived of a service that was improving mobility, reducing incidents of drunk driving, and expanding transportation options to underserved parts of the city.

Conversely, it is important that ridesharing companies are regulated to ensure safety for passengers and so that traditional taxi companies aren’t operating on a completely different regulatory playing field. Toronto seems to have found a reasonable balance that allows both types of businesses to operate on a similar set of rules while also recognizing the clear distinctions in service delivery and organizational structure between ridesharing and traditional taxi services.

 

While Big Data Grabs Headlines, Small Data Is What Cities Need

— May 17, 2016

Bangkok SkylineSuppliers in the smart city industry offer a range of data solutions for city managers to better detect and respond to breakdowns and inefficiencies in the delivery of city services. The onset of big data and the Internet of Things (IoT) have been touted as potential solutions to the biggest challenges facing cities today. However, what cities really need is small data—in other words, clear, specific, and actionable insights filtered from the vast amounts of raw or big data being created. For example, massive amounts of traffic data is only useful if it can be used to affect how services are delivered. Useful small data would alert city officials to inform public transit riders of delays and suggest alternative routes for more efficient travel. Getting even more specific, smaller data can help city and operations managers understand how their service delivery may be affected (i.e., an incoming shipment of cargo or goods will arrive 3 hours later than expected).

Creating more actionable insights for city managers is an opportunity for business analytics in all sectors. Government agencies need clear messages and response plans to improve operations, reduce costs, and better serve their citizens. When combined with easily understandable data visualizations, the increased use of statistical analysis, simulation, and optimization can help in the process to deliver actionable data insights.

Data and predictive analytics are currently able to provide some of the following benefits in each key sector:

  • Energy: Smart meters and other smart grid technologies are enabling a more dynamic and detailed understanding of energy generation, transmission, distribution, and consumption. As the energy system of the city becomes more complex, real-time data across these systems is vital in order to manage the grid and create effective energy markets.
  • Water: Intelligent devices, communications networks, and advanced IT systems are helping the water industry face the challenges posed by rising costs of operations, maintenance requirements, global urbanization, climate change, and other pressures on supply and distribution. In the process, the industry is expected to become increasingly information-focused, drawing on real-time data from the pumping station to the meter. Communications networks in particular can help to improve water management by discovering leaks and providing alerts if the water is unsafe for drinking.
  • Mobility: Real-time data collected from sensors, cameras, and other devices can optimize connections between modes of transportation for faster travel times, reduce the costs of operation, and increase convenience through improved information services for users. Data analytics can also be used to detect and predict the likelihood of traffic accidents or vehicle breakdowns based on congestion and speed patterns. This data enables managers to be much more proactive, as they can use predictive analytics to identify potential congestion issues, adapt bus routes, and dynamically manage the availability of city parking.
  • Buildings: New capabilities go beyond basic management dashboards to the analysis of a wide range of building-related energy and operational data. Predictive analytics are being used to anticipate future conditions based on past performance and avoid unforeseen facility management issues.

As demonstrated from the examples above, data is already helping cities become more efficient and improve in the delivery of city services. Being able to more accurately and quickly gain actionable insights from large data sets will be crucial for the future growth of smart city technology. For more information on big data, the IoT, and predictive analytics, keep an eye out for Navigant Research’s upcoming global report on Smart Cities.

 

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