Cleantech Market Intelligence
Urban Automated Vehicle Deployment Needs Coordination
There’s little doubt that ride-hailing as a means of urban transportation is on the rise, and that trend is expected to continue unless something dramatic changes. Urban congestion is also on the increase globally. While there is a clear correlation, causation is still open to some debate—although studies seem to indicate that ride-hailing is at least partly to blame.
As of early 2018, there are probably no more than 1,000 highly automated vehicles (HAVs) being tested on the public in cities around the world. Those tests are going to start turning into commercial applications for ride-hailing possibly as soon as later this year, and before these vehicles proliferate, we need to have the conversation about how to integrate these vehicles without exacerbating the congestion problem.
What Will Entrepreneurs Do?
Left to their own devices, we already know how entrepreneurs, especially those backed by mountains of Silicon Valley cash, are likely to deal with this. They will rush as many vehicles as possible into the marketplace (primarily, in densely populated cities) in order to establish a dominant position early. This has happened in many areas of the technology sector, and it certainly has been the strategy of Uber and Lyft.
Is Ride-Hailing the Future?
Navigant Research’s Mobility as a Service report projects that, by 2026, ride-hailing services will be providing more than 160 billion rides annually and with nearly 1 trillion vehicle miles traveled.
From a consumer perspective so far, ride-hailing has been a huge boon, providing convenient access to rides at reasonable prices (except during rush hour and inclement weather). While I don’t use ride-hailing at home, I haven’t rented a car during a trip in many years and I rarely take traditional cabs. The convenience factor often makes it a great alternative to traditional transit.
Ride-hailing companies claim that for each of the vehicles deployed on their platforms, they replace multiple individually owned vehicles, which should reduce congestion. However, often these vehicles are without passengers as drivers wait for a ride request. To provide short wait times for customers, the companies entice more drivers with higher fares via surge pricing. While this makes sense economically, it also puts more cars on the road at times of high demand, increasing congestion. Also, the platforms have no control over where drivers choose to deploy themselves.
What Is the Potential for HAVs?
HAVs provide an opportunity to address the problem of urban congestion, but only if they are deployed in a coordinated fashion that is probably anathema to those of a more libertarian bent in the tech industry. Nonetheless, cities are going to need to step up and play an active role in shaping deployment plans for HAVs, and companies involved in the sector are going to need to cooperate.
Any regulatory frameworks need to allow for enough flexibility for multiple companies to compete with services and retain the potential to be profitable. At the same time, service providers need to be prepared to share enough data to enable the optimization of the mobility ecosystem so that excess vehicles are kept to a minimum while still meeting the needs of residents.
However, not every resident is going to be able to afford to take an HAV for every trip. A multimodal ecosystem with a range of vehicle types and operational models from point-to-point to fixed-route mass transit will persist. To the degree possible, trips should be optimized with the use of whatever mode makes the most sense. The HAVs should also be optimized to keep empty trips to a minimum, which will benefit everyone by reducing congestion and maximizing profitability.