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The future of mobility

A critical dialogue is going on across the extended global automotive industry about the future evolution of transportation and mobility, and it has ramifications for companies across the economy. The dialogue is being driven by the convergence of a series of industry-changing forces and mega-trends, including rapid advances in connected vehicles, shifts in mobility preferences toward pay-per-use mobility, and the emergence of autonomous vehicles.

Mobility innovation is a natural extension of the way business ecosystems are evolving.

All told, a system that has been well-established for a century is on the verge of a major transformation that could result in the emergence of a new ecosystem of personal mobility.
The focus of these discussions centres on whether the extended automotive industry will evolve incrementally toward some future mobility ecosystem or whether change will occur at a more radical pace and in a highly disruptive manner. No one knows the full scope and magnitude of the changes that are to come, what they entail, or how they will evolve, yet these forces have the potential to alter current industry structures, business models, competitive dynamics, value creation, and customer value propositions.

“We may be on the threshold of change as substantial as any industry has ever seen,” says Eamonn Kelly, director of Deloitte Consulting, and chief marketing officer for Deloitte’s Strategy & Operations practice. “Profound disruption could extend far past the automotive industry itself. Many other aspects of the modern economy that are based on the continuation of human-driven, personally owned vehicles could also be challenged.”

“We may be on the threshold of change as substantial as any the industry has ever seen. Profound disruption could extend far past the automotive industry.”
Eamonn Kelly Director, Deloitte Consulting LLP

Along with Scott Corwin, Joe Vitale, and Elizabeth Cathles, Kelly co-authored a recent report for Deloitte Insights, “The Future of Mobility,” explaining the dynamic forces set to reshape the mobility ecosystem that supports the movement of people and goods around the world. Car-sharing and autonomous vehicles are just two developments they cite that promise to upend traditional business models in the automotive sector and countless others. Boundaries between vehicle manufacturers, technology companies, and other businesses are becoming blurred as the proliferation of data creates a new basis for competition and collaboration.

Information is being shared and used in new ways that bridge the entire continuum of care.

As a result, the authors see four potential future states for the mobility ecosystem:

  1. Incremental change
    This most conservative vision of the future puts heavy weight on the massive assets tied up in today’s system and sees private vehicle ownership remaining the norm.
  2. A world of car-sharing
    Shared access to vehicles continues to grow, driven by economies of scale, increased competition, and passengers’ preference for convenient point-to-point transportation.
  3. The driverless revolution
    Autonomous-drive technology proves to be viable, safe, convenient, and economical, yet private ownership continues to prevail.
  4. A new age of accessible autonomy
    The autonomous and vehicle-sharing trends converge, giving rise to a community of mobility management companies that offer a range of passenger experiences to meet widely varied needs at different price points.
    While forces such as regulations and social attitudes may affect the more ambitious scenarios, Kelly believes mobility innovation is a natural extension of the way business ecosystems are evolving in today’s world. In many industries, companies and entrepreneurs, empowered by data and increasing connectivity, are joining together to deliver solutions that meet people’s needs and desires.
    For example, Kelly points to parallels in the health care space, where technology advances and data availability are transforming patient care and disease prevention.

“Think of it as a shift towards delivering desired outcomes in systemic ways that were not previously possible. For example, we all probably want wellness, not necessarily arduous trips to the doctor, or pills or surgeries,” Kelly says. “Today, you’re seeing information created, shared, and used in new ways that bridge the entire continuum of prevention and care - creating the potential for far better outcomes. Mobility will perhaps evolve the same way, enabling people to get what they really want – safe, convenient, comfortable, and fast ways to move about when and where they want – in new ways.”

Those wants include getting products faster. After all, mobility is not just about the movement of people – it’s about the movement of things, too. The mobility ecosystem of the future could dramatically transform the nature of distribution and logistics. Cargo delivery and long-haul trucking could benefit enormously — it’s not too hard to imagine a future in which delivery times are cut and costs plummet with autonomous trucks that can operate over more extended time periods and cover longer distances.

Such changes would impact companies across the economy. Retailers could boost sales to seniors and other underserved segments through expanded home delivery options. Telecom companies could face increased bandwidth requirements due to increased demand for connectivity and reliability. Media companies stand to benefit as autonomous driving and shared mobility allow more time for the consumption of multimedia and information. And fewer auto-related accidents would put downward pressure on medical and legal costs. These value shifts could significantly affect the future of multiple industries.

However, as vehicles continue on their journey towards ever-greater autonomy, there are likely to be some important differences based on geography. In Canada, we’re likely to see delays of even partial autonomy for consumer vehicles on public roads – all due to our weather.

The reason has to do with how weather affects autonomous vehicle technology. Currently, there are two contending methods of letting robot cars "see" the road: the first is rooftop mounted laser systems, or LIDAR, as in the Google car; the second is a series of traditional cameras, as in the Tesla self-driving mode. Each works well in warm climates, but the LIDAR solution doesn't work well when it is actually snowing, and traditional cameras need to be able to detect lane markings – impossible with just 2-3 cm of snow on the roadway. The fact is, autonomous cars will come to Tel Aviv and Silicon Valley well before they come to Toronto or Sudbury.

On the other hand, one of the very large, important, and early markets for autonomous vehicles will be found on private property, where businesses face different concerns about interacting with human operated vehicles. Mining sites, logging areas and the massive oil sands projects are likely to all see autonomous trials as well as relatively imminent commercial usage. In fact, for that kind of autonomous driving, Canada is likely to emerge as a global leader.

Private company leaders should harness their natural entrepreneurial capabilities and start considering how changes to the mobility ecosystem may affect their resource needs, capital spending decisions, talent strategies, technology investments, and, last but not least, competition. Because if you don’t imagine the possibilities, you can bet that somebody else will.

The value shifts for industries could have a tremendous affect on revenues across the ecosystem.
 

Author

Matthew Kenny
Partner Consulting Leader
makenny@deloitte.ca
 

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