Convergence of Sharing and Automation: Need for Proactive Public Policy and Research Understanding

By Susan Shaheen and Adam Cohen

In recent years, on-demand passenger and courier services – known as Mobility on Demand (MOD) – have grown rapidly due to technology advancements; changing consumer patterns (both mobility and retail consumption); and a combination of economic, environmental, and social forces. MOD is an innovative concept based on the principle that transportation is a commodity where modes have economic values that are distinguishable in terms of cost, journey time, wait time, number of connections, convenience, and other attributes. Earlier this month, we wrote about innovations in goods delivery that are transforming transportation and consumer behavior as travelers increasingly turn to MOD. In this blog, we discuss four potential impacts of driverless vehicles and the need for proactive public policy to maximize the potential benefits and minimize potential adverse impacts.

Potential Impacts of Vehicle Automation

In the near future, automation could be the most transformative change transportation has seen since the advent of the automobile. While MOD is already impacting many cities, it has the potential to have even more notable impacts, particularly in four key areas:

Travel Behavior: It should be emphasized that the impacts of automation on travel behavior are uncertain and difficult to forecast due to a number of highly variable factors, most importantly societal acceptance and use. One potential outcome is that existing roadway capacity may increase due to more efficient operations associated with technology (e.g., closer vehicle spacing known as platooning, etc.). Additionally, operators could “right-size fleets,” providing consumers with vehicles sized based on the number of passengers and trip length. However, there is a possibility that automated vehicles (AVs) and shared AVs (SAVs) could induce demand by making motorized travel more convenient and affordable than personal driving. This could adversely impact congestion. Additionally, automation has the potential to fundamentally change historic relationships between public transportation and private vehicle use, which could support or detract from public transit ridership (we will discuss the future of public transportation in our next blog). In summary, the impacts of AVs on congestion will likely depend on whether the vehicles are predominantly shared or privately owned as well as public policy, such as pricing and restrictions on zero occupant vehicles.

Land Use and the Built Environment: AVs could result in reduced parking demand, particularly in urban centers that can create opportunities to repurpose urban parking with infill development. Infill development has the potential to increase urban densities and could in turn support higher-occupancy transportation modes. However, vehicle automation and telecommuting growth could also make longer commutes less burdensome, which could encourage suburban and exurban lifestyles.

Labor: Automation has the potential to reduce labor costs. However, automation is not likely to completely eliminate transportation jobs. With an aging population, we may likely need attendants to assist people with disabilities and older adults, security personnel, and a high-tech workforce to maintain an automated fleet.

Social Equity: While AVs have the potential to enhance access and economic opportunities for underserved communities, there are numerous challenges that could impact the equitable deployment of AVs. A few challenges could include: 1) affordability/payability (the services are simply too expensive for low-income households or require banking access); 2) availability (the services are not available equally in all neighborhoods); 3) accessibility (the services are not accessible to people with disabilities); and 4) digital poverty (the services require a smartphone or data plan to access). Additionally, AVs may employ machine learning and artificial intelligence that could create other equity concerns. While machine learning – if designed well — can help minimize human bias in decision making, it is also possible that such systems can also reinforce historic bias and discrimination in the transportation network. Just as humans learn to drive through experience, many perception algorithms use machine learning that is trained by events based on past experience. In a driverless vehicle future, machine learning may also impact where vehicles are pre-positioned, roam, charge, and other defining operational characteristics. Learning biases could create notable equity challenges in the future. There is a risk for discrimination when designing transportation algorithms for machine learning systems, including the potential for exclusionary transportation.

Need for Proactive Policy in a Driverless Vehicle Future

Public policy can have a notable influence on the success or potential challenges of driverless vehicles. Public agencies should consider proactively guiding public policy in four key areas to maximize the potential benefits of AVs:

Pricing: Public agencies should consider employing pricing based on occupancy, time of day, and congestion to encourage higher occupancy SAVs and discourage single- and zero-occupant vehicles.

Incentivizing Urban Growth and Urban Growth Boundaries: Metropolitan Planning Organizations, local governments, and other public agencies may want to consider policies that limit outward growth and encourage urban in-fill development to discourage the potential suburban and exurban growth pressure that AVs could create.

Workforce Development Programs: Local and state governments should develop workforce development programs designed to prepare for and respond to a driverless future. This should include a broad program encompassing job training/re-training and job placement resources to minimize the potential adverse labor impacts of vehicle automation.

A Comprehensive Equity Policy: Public agencies at all levels of government should consider a comprehensive equity policy to ensure SAVs are equally accessible and available to everyone. This should include policies that ensure access for people with disabilities, un- and under-banked households, low-income communities, households without access to smartphones or mobile data, and others. Additionally, this should include policies that prevent discrimination and bias from machine learning, artificial intelligence, and other systems that impact or guide the operations of AVs.

The public and private sectors, along with key stakeholders (e.g., non-governmental organizations, community-based organizations, and foundations) should partner to develop proactive policies to prevent and overcome these challenges. Proactive policy and research understanding will be critical to balance public goals with commercial interests and to harness and maximize the social and environmental effects of driverless vehicles.

Susan Shaheen and Adam Cohen are currently studying the impacts of connected and automated vehicles on state and local transportation agencies as part of the National Cooperative Highway Research Program (NCHRP) study 20-102(11).

Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.

 

Personalized User Experience: A Look at Transportation Apps

In October 2015, Localytics asked smartphone users what they wanted from their mobile apps in the future. First, they demanded more functionality so that multiple apps could be consolidated into one. Tied for second was seamless connection to online and offline experiences and personalized content based on preferences, needs, and location. Third was for mobile apps to go a step further and actually anticipate those preferences, needs, and locations. That brings us to today.

Users have come to expect a deeply personalized experience from their apps, and it is a necessity in today’s market to develop and design apps with this in mind from the start. To really be competitive, mobile apps must anticipate users’ needs, keep them engaged, adapt based on massive amounts of user data, and most importantly, offer personalization that’s smart, seamless, and accurate. Transportation apps, in particular, are leveraging tailored content and recommendations to reimagine the traveler’s entire journey, from planning to transport, and even the entertainment in between.

This concept of anticipatory design is one that the average consumer has seen for years, with services like Pandora, Netflix, and Amazon. The next TV show you’re going to binge watch or pair of headphones you’re going to buy are predicted and served up right in front of you. But when applied to transportation apps, we’re moving beyond streamlining consumption and toward streamlining mobility, starting with individual travelers. When designing the user experience for these individuals, app makers have to keep in mind issues like alert-fatigue, decision-fatigue, and overstimulation. It’s easy to get excited and add in tons of features and options – you want your app to do everything, of course! But people are creatures of habit, and users only want to focus on an extremely small percentage of an app’s capabilities – the ones they use consistently. The more simple, intuitive, and predictive the interface is, the easier it is for someone to remain engaged without getting frustrated.

As exemplified most recently in Uber’s large-scale update and launch of “Uber Feed,” personalized differentiation is vital in the increasingly competitive landscape of mobile transportation solutions. The Uber app will now provide shortcut suggestions about your most likely destinations, based on your everyday routine and calendar entries. Then, once you’re enroute, the app will push content relevant to your destination, like Yelp reviews if you’re headed to a restaurant, or food delivery via UberEats, if you’re headed home from work. With this update, we’re seeing Uber embrace the demand for a hyper-personalized and smart user experience, and step into the realm of anticipating user needs. The company “want[s] to know what you want before you want it,” says CEO Travis Kalanick.

 

coffee

 

As transportation apps roll out more updates in the coming years, we’ll likely see a number of trends, including a move away from the isolated transit experience. Currently, the majority of our traveling or commuting experiences are siloed – we’re moving through our day alone, only asking mobile apps for directions, bus times, or the nearest ride to hail. But if apps allowed for user input on a larger scale, there’s opportunity for the UX to become personalized even more acutely, while at the same time shifting toward a more united, community-based mobility. Waze is already leveraging real-time user data to create community navigation – real people working together to update maps and mark police, car accidents, and traffic jams. What is essentially crowdsourcing – tapping into a huge pool of users – actually allows an app to deliver a more valuable experience to each individual within that crowd.

So what if we took that community involvement a step further? By tying a user’s transit or commuter experience to their community beyond transportation, an app could create a more holistically improved experience. If you add local businesses into the equation, this could be a possible scenario: your transit app recognizes that your bus is late and that it’s raining (fantastic start to the morning). You receive a notification from the app along the lines of, “Sorry that you’re stuck in the rain waiting for the bus! Here’s a coupon for a free drink from the coffee shop around the corner. You can also buy an umbrella at the gas station next door.” For this to work, collaboration is key. The coffee shop, gas station, and local transit agency would all need to buy into the experience. But as more community entities integrate, both public and private, an app can become more helpful and personal to the user.

Looking back on the top demands of 2015 smartphone users – two-thirds of which involved personalization – makes looking forward to 2017 even that much more exciting. This year brought huge developments in understanding user needs, and leveraging data to deliver above and beyond those needs. Paving the way were updates as simple as Google Maps predicting our destination the moment we got into the car. App-learning technology will continue to get smarter, and the possibilities of anticipatory design will only grow. So why not involve the local coffee shop in a transit app? There are endless features and scenarios that we could explore, but the challenge is to understand what we should pursue. Which ideas will actually add value? App makers have to know what would benefit their users, before the user ever thinks to want or need it.

 


Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.

Connecting Public Transit and Shared Mobility

As a transportation scientist, my research examines the factors that influence people’s travel decisions – for instance, whether or not they own a personal vehicle or which transportation modes they are likely to use. Experts in the field of transportation know that daily travel choices often boil down to a few basic variables: cost, travel time, waiting and walking times, reliability, and other transportation system service levels. Over the past several years, mobile phones have had an enormous impact on how we move in cities – not only spawning the growth of ride-hailing services (such as Lyft and Uber) – but also fundamentally influencing the way that individuals obtain information about and pay for their mobility alternatives.

Last week, I had the opportunity to speak at the 2016 National Shared Mobility Summit in Chicago, where several hundred leaders from public transit agencies, private shared mobility providers, and automotive companies gathered to discuss the latest developments in carsharing, bikesharing, ride-hailing, and transportation-as-a-service. It is clear that a major transformation is underway; however, there is still much more change to come.

One of the key challenges that we face is harnessing this dramatic change for the public good. Thanks in large part to the disruption by private shared mobility services, the public transit sector is experiencing a renaissance. It is a critical time for us to build partnerships that can ensure future transportation innovations improve access to mobility for all citizens – ones that are affordable, safe, and energy efficient. Here, I offer a few takeaways from the National Shared Mobility Summit and ideas on how we can forge a path to connect public transit and shared mobility for the greater good.
 
1. Public transit is the original shared mobility service
 
During her opening speech on the second day of the conference, Rebekah Scheinfeld, the Commissioner of the Chicago Department of Transportation reminded us that “public transit is the core; shared mobility is built on that core.” There is significant overlap in the users of new, private shared mobility companies and public transit in large part because shared mobility can most efficiently be provided in large, metropolitan areas with high levels of population density which are already well served by public transit.

A recent study by DePaul’s Chaddick Institute for Metropolitan Development compared UberPOOL trips and Chicago Transit Authority (CTA) trips. They found that for neighborhood to downtown trips, while UberPOOL was on average six minutes faster than the CTA, it provided that service at five times the price – an option that the vast majority of urban travelers would not choose. While private shared mobility companies might provide more efficient service for certain routes and markets underserved by public transit, trunk line rail and bus service can and should remain the core in most urban areas.
 
2. Public transit and shared mobility can be complementary
 
Shared mobility services like Uber and Lyft aren’t likely to fade away anytime soon, and they continue to evolve rapidly. While we know relatively little about how they influence travel behavior, early research on the topic suggests that shared mobility services have the potential to be complementary to public transit.

In a report released by the Shared Use Mobility Center (SUMC) and American Public Transportation Association (APTA), a survey found that people who use shared modes of transportation are more likely to use public transit. Furthermore, they found that lifestyle changes may occur when people use private shared mobility options. According to their survey, 15% of respondents reported using public transit more after they started using carsharing, bikesharing or ride-hailing services.

There are additional benefits when urban travelers use multiple shared services. Those who routinely use several shared options (bikesharing, carsharing, and ride-hailing) – coined “supersharers” by the APTA report, own half as many cars as people who use transit alone. In another recent study, the carsharing service car2go was found to remove as many as 11 cars from city streets. While more data and research are needed on ride-hailing (versus carsharing) services, it seems clear that there is the potential for shared services to complement public transit and enable a car-free lifestyle.
 
ReginaPublicTransit
 
3. There is a much-needed groundswell of innovation to improve public transit services
 
In the past year, public transit agencies have begun to experience a groundswell of innovation to meet the needs of growing cities. Last fall, LA Metro created the Office of Extraordinary Innovation, led by CIO Joshua Schank. Tasked with informing the high-level vision and long-term strategy for the agency, they are welcoming new ideas and pilot projects to improve mobility throughout the Los Angeles region. A recipient of the recently awarded Federal Transit Administration Mobility on Demand (FTA MOD) grants, LA Metro is among several transit agencies that is championing much-needed change in the public sector.

As new private sector solutions have rapidly entered the transportation scene, public transit agencies are beginning to cultivate their own experiments to dramatically improve mobility services in their cities. While many of these pilots are just getting off the ground, the level of interest in shaping public transit services has never been higher than now.
 
4. Developing public-private partnerships between transit agencies and the private sector is key
 
The recently awarded FTA Mobility on Demand grants also promotes collaboration between public transit agencies and the private sector to develop solutions that can connect transit service and shared mobility providers. A great example of a successful public-private sector partnership is that of another FTA Mobility on Demand award winner, the Tri-County Metropolitan Transportation District (TriMet), and moovel North America.

In September 2013, TriMet became the first public transit agency to implement a mobile payment solution for multiple transit services using the moovel transit platform. This year, moovel partnered with them to launch RideTap, a feature integrated into the TriMet Tickets application that connects public transit riders with shared mobility services, including car2go, Lyft, Zipcar, and BIKETOWN, Portland’s new bikesharing system. moovel’s public transit solutions deliver real-time information and ease of payment to transit users, while also addressing the first/last mile challenge of getting riders from the station to their front door.

A clear takeaway from the National Shared Mobility Summit is that partnerships between cities, transit agencies, and the private sector are critical to usher in the next wave of transportation innovation. Although we are in the early stages of developing integrated, multimodal transportation solutions, the future is bright. Through increased collaboration between public and private transportation providers, I believe we can deliver cheaper, faster, and more energy efficient mobility solutions for cities – and the big winner will be the daily traveler.


Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.

Transport Apps and the Long-Term Market Development – Part 3

How will the changing rules of the transportation market affect the customer and the companies? The answer lies in the rising importance of customer decisions, the extent of big data and a new era of monopolists.

There are many determinants – customer focused, economic and financial ones – that may lay the grounds for a new area of monopolistic competition where technology firms replace each other which finally benefits the customer by enhancing product quality and providing perfect competitive insight.

On the economic side the solution will be attracting investors for the business model via the customer lifetime value based valuation method. In this context it will be interesting to see if the negative interest rates currently seen in the financial markets will foster further investments in the segment of transportation and routing apps.

On the customer side we will see a clear preference to handle all objectives with a single app in the long run which is also reflected in the valuations currently leading to significant investments in technology start-ups managing to create an increasing number of relevant touch points.

A first tendency can be seen in the progressive influence and room given to smartphones replacing a peripheral IT environment. Product quality will be a driving force as the best app will be the one creating the most seamless touch points across the entire set of industries.

Competitive advantage is hereby mainly gained through data utilization driving efficient use of available capacity by leading customers’ decision processes and synchronising them with real workflows along the supply and production chains of different companies. Logistics could, however, become a driving force in creating real-time customer propositions.

An Outlook and a Comparison of Affected Sectors

As transportation may immure logistics and supply chains much faster than pure end-customer focused shopping portals or search engines, they could have a trump card to win the race against highly diversified yet internally unconnected technology firms currently pursuing a strategy of building up industry competence centres before linking them on their platform. For that I assume transport firms could have a first mover advantage in handling global chains of product delivery while developing brokerage capabilities.

Another industry which could turn out to be having a competitive advantage even though from a completely different direction is the electronic payment industry. Their strength is mainly derived from security-intense applications and the possibility to quickly connect separate touch points while validating spending characteristics. This could proof as a solid backbone for all other platforms.

However payment industry firms may play their cards best via white label solutions and acting in the back as to simulate a separation between banking functions and the actual purchases. This is best argued by the customers’ perception, awareness and especially desire for asset security and protection against financial risks such as unnecessary expenses.

Which competitor will make the cut?

For this reason crossing out electronic payments as the one taking over shopping and transportation interfaces directly or indirectly and referring to the aforementioned advantages of transportation (app) providers, I assume that they will make the cut.

The only open question is who will be faster in establishing the relevant links between the industries and building up a considerable customer base who is not just aware but fully utilizing the apps functionalities.

Coming from this perspective final power lies in the decision of the customer by opting for either model – specialised platforms which may link to more diversified ones or totally integrated platforms which rely on the supply of specialised providers and due to intrinsic requirements are more big data driven.

Tell us your opinion: What kind of mobile app would you like to have that will help you in your day-to-day lives?


Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.

Transport Apps and the Long-Term Market Development – Part 1

Will the soaring number of transportation apps benefit customer choice or will the market consolidate to foster an even more monopolistic position of IT giants controlling nearly everything? Resolution can only be found by looking at the question from different angles of market penetration approaches.

Currently we observe a “Moore’s Law – like” increase in the amount of routing and transportation apps which is mainly driven by mobile commerce roll-outs of single mobility service providers trying to give their original core business an additional boost in market share by attracting new customer segments via smartphone-based enhancements or minimizing the churn rate by staying up to date from a technological perspective.

At the same time, there is a tremendous rise of intermodal concepts developed by student groups or amateur developers mostly trying to fix problems they encountered themselves in transportation. However, most of these solutions have a clear regional focus and are far from global reach or gaining the necessary critical mass of users to stay competitive.

All this happens while traditional map focused businesses have not (fully) entered the market yet and concentrate more on routing rather than full-fledged mobility solutions.

Who Are My Customers and What Do They Need

Customers for these new types of apps are mainly drawn from the upper-right located sinus-meta-milieus, which globally is the fastest growing peer group giving intermodal travel an upside since this form highly depends on customers exhibiting a clear degree of IT affinity.

Beyond this the development is accelerated through the consumer segments leaning towards a general more social-hedonistic attitude reflected by an access trumps ownership perception of products.

Derived from this orientation of the main customer group the implication is that they are likely to choose the offer which provides the greatest elation or social coincidence over one that is purely practical.

Therefore transport or routing apps need to offer more than just a link from A to B, which will lead to an extension of one-stop-shopping concepts and relevant engagement marketing picking up that trend.

Keeping in Touch With the Customer Is Key

In return, this search for experience opens the market to many non-traditional side entries of companies originally not affiliated with any kind of transport business. For these reasons, chances are that successful brands utilize their latest technological developments such as new payment models to create additional touch points along the customer journey map resulting in total coverage if combined effectively with pre-existing app modules facilitating seamless travel and shopping experiences.

Additionally, more production focused participants of the economy 4.0 may assimilate their tools and utilize their applications in fields foreign to them in order to maximize their generic standpoint as software provider since customer contacts are core in sustaining profitability.

The importance of being the incumbent operator of customer relations can also be seen in the fact that former market leading telecommunication companies have lost their position as the business today is taken over by huge companies with various business segments who keep the customers with their respective mobile operating systems altogether.

Holding the customer contact is also the main source in generating additional revenues since this gives a significant edge about supplier activities in form of information gathering as an incremental element in creating successful product propositions.

This is vested from these data collections providing sufficient probability in incentivising people to use a certain product rather than relying on static data i.e. necessary links between available information and the AIDA marketing conception to increase sales.


Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.