Self-Driving Vehicles, Robo-Taxis, and the Urban Mobility Revolution

Self-Driving Vehicles, Robo-Taxis, and the Urban Mobility Revolution

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Self-Driving Vehicles, Robo-Taxis, and the Urban Mobility Revolution

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  • A Policymaker Perspective: Open to SDVs in Cities

    When it comes to urban environments and SDVs, there are two major questions: How disruptive will these vehicles actually be in transforming the city of today? And how can city governments take advantage of autonomous technology to achieve broader goals with respect to urban mobility and livability?

    It is reasonable to believe that SDVs—especially if there is widespread ride sharing—will have a far-reaching impact on all manner of travel within cities and on consumers’ lives. Our research with urban policymakers indicates that many are aware of the potential societal benefits, but they have yet to factor these into their transportation plans in many practical ways.

    Policy Goals for Urban Transportation

    Urban policymakers want city inhabitants to have ready access to safe and affordable mobility. This goal can be elusive. Pedestrian and cyclist safety presents considerable challenges in many cities, and the most common accident- and fatality-reduction measures—stronger laws, awareness campaigns, tighter enforcement, and improved infrastructure—are far from universally effective. Compared with such measures, advanced driver-assistance systems—and in the long run, SDVs—provide much more effective ways of improving road safety.

    Policymakers are making substantial efforts to promote sustainable modes of transportation. Most of the city officials we interviewed spoke of plans to dedicate more road space to walking, cycling, and public transportation, for example, and to encourage new mobility models, such as car sharing, e-mobility, and bike sharing. London’s network of Cycle Superhighways is one example of this kind of thinking at work. Most cities still don’t actively discourage private cars (although some have implemented congestion- or peak-pricing schemes), but neither do they encourage them. As one European traffic director put it, “We are not trying to outlaw cars in the city. Rather, we are trying to make all other transport modes, such as cycling and public transport, equal in terms of convenience.” Some 60% of the urban policymakers we interviewed expect that by 2025, at least one city will have banned traditional-car ownership, partly as a result of emerging shared-autonomous-mobility models. Another 24% believe that this will happen by 2030. Some cities are more aggressive: Oslo recently announced its ambition to ban private cars from the city center by 2020, thereby cutting greenhouse gas emissions in half.

    City policymakers want to provide equitable access to affordable transportation for all sociodemographic segments, wherever they live and work. To achieve this goal it might be necessary to extend more transportation services to less densely populated areas. Policymakers talk of solving the “last-mile problem” for citizens—getting them from their home or office to the closest public-transit point (and back). The last mile can be a particular challenge for people living on the outskirts of a city, where access to public transportation can be distant. Addressing this issue by expanding public-transportation networks—adding lines and capacity to improve the passenger experience with greater frequency and convenience—is, in many cases, difficult to support financially because utilization rates are often low.

    Improving traffic efficiency, reducing congestion, and lowering air pollution from auto engine emissions are also high priorities for city governments. SDVs, and especially robo-taxi fleets, could enable cities to meet these objectives in the long run.

    High Hopes and Some Concerns for SDVs

    Many urban policymakers see significant benefits in SDVs and are positively disposed toward them. Of the 25 policymakers we interviewed, only 2 had not given thought to the potential benefits and concerns related to SDVs. Almost 90% said that they expect the first urban shared-SDV fleet to be operating by 2025, but few cities have taken concrete steps to integrate SDVs into their mobility plans. (See Exhibit 8.)


    Policymakers anticipate a wide range of benefits for individuals and society from widespread adoption of SDVs, robo-taxis, and, particularly, shared-SDV fleets. (See Exhibit 9.) These benefits include many of the priorities cited above, including improved road safety, equitable availability of and accessibility to mobility, better traffic efficiency, and reductions in costs and pollution. Many policymakers are particularly excited about the prospect of improving the accessibility of transportation. They believe that SDVs (including cars, multipassenger “pods,” and minibuses) offer a tailor-made solution for the last mile—especially for inhabitants of less densely populated areas—and expand public-transit options. Robo-taxi fleets could also provide the elderly, children, and the disabled with better access to transportation.


    Policymakers voiced their concerns about mobility concepts based on SDVs:

    • Impact on Public Transportation. While policymakers would like to see robo-taxis solve the last-mile problem, they also worry that SDVs and their convenience might come to be regarded as a superior mode of transportation for the entire commute, thereby undermining the use of existing public transportation. This concern looms large in cities with large and costly public-transportation infrastructure that needs to be maintained.
    • Urban Sprawl. Policymakers are also concerned about the risk of increased urban sprawl. With SDVs offering a more convenient, and potentially cheaper, means of transportation, people might move further from their city-center workplaces, with significant consequences for current urban plans and the distances traveled by individual vehicles.
    • Revenues at Risk. Many cities generate revenues from fuel taxes, parking tickets, and other vehicle-related fees and charges. SDVs will eat into these revenue streams unless cities find ways to produce revenues from robo-taxi fleets and their related infrastructure, such as charging stations.
    • Funding. Who is going to pay for the virtual and physical infrastructure a city may need to install to make SDV transportation a safe and reliable reality and to maximize societal benefits? Governments, various components of private industry, and consumers will have to reach consensus on new fee and taxation models, as well as new public-private funding structures to cover such expenses. In a previous report, we estimated that to equip a city of 10 million inhabitants with intelligent traffic management systems, the required infrastructure investment could be as much as $5 billion. (See Connected World: Hyperconnected Travel and Transportation in Action, a World Economic Form report produced in collaboration with BCG, May 2014.)
    • Protection of Privacy and Data Ownership. A big part of the robo-taxi revolution involves the collection and use of consumers’ mobility-related data. Who, for example, owns the data? How does the city ensure that this data is safeguarded from cyberattacks? How can the city safeguard citizens’ privacy while using the data to improve transportation demand management?

    On balance, in the eyes of city policymakers, the potential benefits of SDVs outweigh the risks and concerns. And policymakers recognize that in order to reap the benefits, new business and urban transportation models will be needed.

    Laying the Groundwork for Mobility Ecosystems

    A number of public- and private-sector players are already laying the groundwork for intermodal transportation systems of which SDVs and robo-taxis could be integral elements. One private-sector example is Moovel, a subsidiary of Daimler. Moovel is available in five regions of Germany, including the Stuttgart, Munich, and Ruhr areas. The travel planning app integrates user options, including walking, private cars, car sharing, taxis, and public transportation. In addition to planning their trips and selecting options, users can also pay through the platform.

    In Helsinki, public- and private-sector partners have been collaborating since 2015 to develop and implement an end-to-end mobility as a service (MaaS) concept. At the core of MaaS are personalized mobility service plans. MaaS acts as an operator that integrates various transportation providers and offers a single mobile application to users on a “single-ticket principle.” Rather than purchase a bus ticket or pay a taxi fare, users purchase a mobility ticket with the actual usage plan tailored to their individual needs. So, for example, for a monthly fee of €100, a user could have unlimited access to public transportation, limited access to taxi rides, and use of a rental car for a specified distance or amount of time.

    Most city policymakers see themselves in an enabling role in the deployment of autonomous transportation, the private sector taking the lead in actual development. They expect that a private-sector marketplace of competitive robo-taxi fleets offering different kinds of mobility services will evolve, and they recognize that they, as policymakers, are unlikely to manage such a marketplace efficiently. For one thing, their decision-making processes move too slowly for fast-advancing technology, and for another, they can play a more productive role in SDV development by facilitating the establishment of the relevant infrastructure (charging stations, for example, and traffic flow protocols and systems), paving the way for testing the technology and helping to gain public acceptance. And since SDVs will ultimately be one component of a larger, integrated mobility ecosystem, these policymakers also see that they will have an important role in the regulation of robo-taxis and the collection, analysis, and use of mobility data for planning purposes. (See Exhibit 10.)


    Nobody thinks that private-car ownership will fully disappear. Policymakers expect to encourage the adoption of shared SDVs, but they will not want to force it. They anticipate using a range of instruments to make private-car use less attractive—for example, by increasing the expense of parking or imposing more-aggressive congestion-pricing schemes. Plenty of officials are cautious about the role of SDVs in their cities. “We need to better understand the impact this is going to have on our city before we take a position,” one said. And another said, “We would like to see it work in other cities first before we try it out for ourselves.”