Home Apps The Future of Urban Mobility: Can Europe Stay On Top?

The Future of Urban Mobility: Can Europe Stay On Top?

12 min read
mobility
View original post.

European Cities: The Gold Standard

Speak to any transport planner and they will tell you that European cities are considered to be the gold standard of good mobility. European policymakers understand that getting people out of cars improves mobility.. European cities were originally built to accommodate heavy foot traffic. After a century of ceding streets to motorcars we are returning to our pedestrian routes, recognizing that active mobility is the best way to move around urban spaces

Europe’s cities achieved their ‘gold standard’ title thanks to a few factors. They are dense, with few parking facilities and high levels of urban living. Municipal governments have invested heavily in public transportation, enabling ease of movement without private cars. America took the opposite approach; now the crumbling New York City subway will cost a whopping $14 billion to repair and upgrade. Los Angeles, which has the world’s worst traffic (TomTom traffic index) has introduced a new sales tax in order to raise $120 billion for public transport over the next 40 years. But Americans are reluctant to give up car commuting and public transport use has been declining nationwide. That’s according to Ethan Elkind, a law professor and author of ‘Railtown: The Fight for the Los Angeles Metro Rail and the Future of the City’.

A New Disruptive Business Model in Town

But, it’s not clear how European businesses can leverage Europe’s reputation as a mobility leader. Transport is a new, hot space for tech companies with massive investments. Foreign companies with massive war chests (e.g. Uber, Didi Chuxing and Ofo) have entered European cities to answer the huge demand for ‘mobility as a service’. Their technology is not disruptive but their business models are. Unlike European public transport operators, who secure fixed-term licenses to operate in certain routes or spaces, these companies use ongoing funding rounds to expand geographically and secure market share long before the company is profitable. Economies of scale allow them to offer lower prices and a better service, thus outcompeting incumbent operators.

European commuters are benefitting from these startups. Manchester city officials have expressed delight about Mobike giving them free bike-sharing, something the city had always wanted and could not afford.

When European public transport goes wrong it can go horribly wrong. The city of Paris has been the envy of the world, with SNCF running long distance and regional trains, RATP running busses and metros, and Velib and Autolib offering bike and car share. SNCF workers are on an extended strike and the city is now facing major issues with both the bike and car share. Bolloré, who have operated Autolib car-sharing since 2011, recently announced that by the end of their contract (2023), Autolib will be €293 million in debt. And it wants Paris to pick up the tab. Equally frustrating for the city is that their exclusive contract has kept out the likes of BMW Drive Now and Daimler Car2Go, which are free-floating solutions not requiring budget or new infrastructure from the city.

Smoovengo, the company contracted in 2016 to run Paris’s extremely popular bike-sharing system Velib  for the next 15 years, have spectacularly failed to deliver on their promise of having the new system up and running by Spring 2017. Only a fraction of the bikes are currently functional, with CityLab reporting that ‘daily shares’ for the month of April were just 10 000, down from an all-time high of 100 000 a year before. In the meantime Chinese free-floating bike sharing companies such as Ofo, Mobike and Obike have moved into the gap and have watched their own subscription rates rapidly increase over the past year.

MaaS in the city

Mobility as a Service (MaaS) is the new term for mobility without car ownership – something the Europeans have been doing for a while. What has changed is that the offer is no longer limited to busses, trains and cars. Bird, emboldened by a $100 million investment drive, launched hundreds of electric kick-scooters in San Francisco, becoming the first US company to beat the Europeans with an innovative active mobility solution.

And now the race is on for the ‘3rd dimension’: airspace. Eighteen companies – including Uber Elevate, Volocopter and Lilium – have plans to fly passengers above the traffic.

These developments are changing the game for cities. In the past they had to think about transport provision for citizens, a capital intensive and complex business. Now all they need do is pass good policy and issue licenses accordingly to resolve transport problems.

City authorities will  become referees, inviting multiple private companies to compete for licenses to operate on their road and street infrastructure – and possibly above it too.

Europe staying ahead of the Game

The Europeans have dominated the transport industry for years with their excellent engineering solutions and model cities, but they are starting to worry. Emmanuel Macron recently initiated ‘Tech For Good’, hosting the likes of Mark Zuckerberg and Uber’s Dara Khosrowshahi at the Élysée Palace, where he pleaded with them to play fair with France.

But perhaps France’s business approach, and not its technology, is dated. The key to success is understanding how tech companies have reinvented business. The traditional business model, led by engineering excellence, is to build value via proprietorial technology and locked-in contracts. Big-tech understands the importance of first-to-market. In the race to plant their flag on new territory they will collaborate and share. The story of Autolib is a case in point. Bolloré, one of France’s intergenerational family businesses, entered the car-sharing market on the strength of their 20-year history of excellence in battery technology. Instead of partnering with Renault/Nissan, the world’s EV leader, and other great European companies to create a world-beating car-share, they decided to go it alone. They trusted the value of their long-term contracts. France is about to embark on one of the world’s most expensive public transport infrastructure projects, the Grand Paris Express, which includes four new lines, 200 kms of rail and 72 stations at a cost of €30 billion. When the project is completed in the 2020s it is highly likely that we will have hundreds of shared and on-demand electric vehicles available at the tap of a phone. France and Europe need to make sure that their offers stay at the top of the pile in a flattening world.

This article is the last in Autonomy’s four-part series The Future of Urban Mobility, which explores where mobility is headed in the world’s biggest markets. Thanks for reading and if you want to learn more about the Future of Urban Mobility, come to Autonomy & The Urban Mobility Summit, 18 – 20 October in Paris. It’s the place to be to meet the world’s biggest innovators in urban mobility!

Comments are closed.

Check Also

MaaS: Changing the way you travel

View original post. Integrated and digitised public transport systems have the potential t…