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The promise of smart mobility

by Peter Viechnicki, Tiffany Fishman, William D. Eggers
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    19 May 2015

    The promise of smart mobility Part of the "Smart mobility" research report

    19 May 2015
    • Peter Viechnicki United States
    • Tiffany Fishman United States
    • William D. Eggers United States
    • Peter Viechnicki United States
    • Tiffany Fishman United States
    • William D. Eggers United States
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      • Peter Viechnicki United States
      • Tiffany Fishman United States
      • William D. Eggers United States
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    Emerging alternatives to traditional car ownership—including ridesharing, carsharing, bike commuting, and on-demand ride services—can not only get people where they want to go, but also help address public policy problems such as congestion, traffic accidents, and air pollution.

    The promise of smart mobility

    Explore

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    Explore Deloitte Review, issue 20

    New business models inspired by the sharing economy and disruptive technologies are ushering in an exciting new age in transportation: the era of smart mobility. The arrival of on-demand ride services like Uber and Lyft, real-time ridesharing services such as Carma and Zimride, carsharing programs such as Zipcar and car2go, bike sharing programs, and thousands of miles of new urban bike lanes are all changing how people get around.

    Commuters no longer need to own a car to have one at their disposal. They don’t have to pre-arrange carpools to share a ride with others headed in the same direction. They needn’t wait for a ride home when it’s pouring down rain and there’s not an empty cab in sight.

    For their part, automakers increasingly see themselves as both product manufacturers and mobility services companies. In addition to developing next-generation connected and autonomous vehicles that will improve traffic flows and safety, automakers are investing in a wide swath of new mobility services—everything from carsharing and rental services to multimodal trip-planning apps.

    There’s no question that consumers have been the primary beneficiaries of new mobility services. The question facing urban planners is how today’s expanded mobility ecosystem can help advance public policy goals such as encouraging higher productivity and reducing congestion, while bringing related benefits such as fewer traffic accidents, better air quality, and a smaller urban footprint for parking.

    Can alternative transportation modes help metropolitan areas reduce traffic congestion without spending tens of billions of dollars on new roads, tunnels, and light rail? And if so, what are the most promising strategies? Which approaches work best in which cities? How can automakers and transportation officials work together to address changing mobility needs?

    These are just a few of the questions our analysis attempts to answer.

    This study takes a data-driven look at what metropolitan areas can gain from expanded mobility ecosystems. We compare alternative approaches from ridesharing to biking, and explore how governments can focus scarce investment dollars on areas where they can do the most good.

    Traffic congestion in America: Grim and getting worse

    The need for answers to America’s traffic gridlock problem becomes more acute each year. In much of the nation, traffic congestion has increased to alarming levels, with associated costs estimated at $121 billion, equivalent to slightly more than 1 percent of all annual US personal consumption.1

    The average American spends about 34 hours every year sitting in traffic. That’s a whopping 5.5 billion hours for all commuters.2 The economic opportunity cost is staggering: $330 million daily, or about $124 billion every year. If nothing changes, this cost could grow to $186 billion by 2030.3

    And that’s just the cost to individuals. Every mile we drive costs governments 7.5 cents, and at almost 3 trillion vehicle-miles traveled per year, those miles add up.4 If you include the cost of congestion, air pollution, or even lost property value near roadways, the total estimated external cost of driving runs between 27 cents and 55 cents per mile.5

    For decades, governments have tried in vain to develop solutions to address congestion. High-occupancy vehicle (HOV) lanes and costly public transportation networks may have slowed the growth of congestion, but commute times continue to lengthen in America’s urban centers. Estimates suggest that only 15 percent in congestion savings can be achieved even with widespread deployment of such conventional measures to all major freeways.6

    Clearly, a new approach is needed.

    Nurturing the elements of smart mobility ecosystems

    Helsinki, Finland has announced an audacious goal: By 2025, the city plans to make it unnecessary for any city resident to own a private car. The goal is an on-demand mobility system that would allow customers to choose among public and private transport providers and assemble the fastest or cheapest way of getting anywhere they need to go at any time.

    “The city’s role is to enable that market to emerge,” explains Sonja Heikkilä, a transportation engineer with the city.7

    Bus routes would be dynamic, changing based on current demand at any moment. From planning to payment, every element of the system would be accessible through mobile devices.8

    Citizens could arrange a personalized travel experience irrespective of location. Wherever they are in the city, they could access a variety of options with their phone: a rideshare, an on-demand bus, an automated car, special transport for children, or traditional public transit. Residents could purchase “mobility packages” from private operators that would give them a host of options depending on weather, time of day, and demand.

    Today, our congested transportation system is designed around infrastructure and vehicles: roads, bridges, subways, and buses. Helsinki’s 2025 vision points to a very different future model, one designed around individual mobility—moving each traveler from point A to point B as quickly and efficiently as possible. US cities also are beginning to reimagine their transportation ecosystems around this concept.

    A transportation system designed around individual mobility would prominently feature four modes of alternative mobility (as well as more traditional modes such as buses):

    • Ridesharing (i.e., carpooling), which taps into an abundant yet underutilized resource: empty car seats. This option doesn’t add any new vehicles to the system, and that’s why it could help reduce the traffic congestion that plagues most cities today. Unfortunately, carpooling has declined from around 20 percent of all commuters in 1970 to less than 10 percent today.9
    • Bicycle commuting, which has been on the upswing in recent years, particularly in Europe and in cities with relatively flat terrain, miles of bike lanes, and other cycling infrastructure. For commutes of a few miles or less, biking is often the fastest way to get to work.10
    • Carsharing, enabled by new technology that allows companies and individuals to rent cars by the minute or hour.
    • On-demand ride services companies such as Uber and Lyft, which allow ordinary motorists to use their personal cars to offer prearranged transportation services. These services, enabled by mobile and GPS technologies, are making the taxi market more competitive.

    See appendix A for a more detailed definition and description of each mode.

    DUP 1027_Figure 1: Growth rates for alternative transit routesThese forms of transportation have seen different levels of popularity in recent years. Ridesharing, as mentioned above, has been in decline for decades. On-demand ride services, on the other hand, have seen rapid growth since their launch several years ago.

    Individual, corporate, and government incentives line up well for some of these modes, and poorly for others. Where the incentives align, we see faster growth (figure 1). Ridesharing, for example, suffers from a lack of both individual incentives to participate and private sector incentives for technological innovation. Carsharing’s growth has been more rapid due in part to automobile manufacturers’ entry into the carsharing business and relatively enthusiastic support from municipalities.

    We now take a more detailed look at the current and future role that each of the four transport modes can play in addressing America’s traffic congestion problems.

    Our methodology

    To understand which cities—and even neighborhoods—stand to gain the most from better congestion reduction strategies, we examined a variety of data, most prominently commuter behavior at the census-tract level. Using data from the Census Bureau’s American Community Survey (ACS) and Census Transportation Planning Products (CTPP), we estimated the number of people who could reasonably rideshare or bike to work.11 We then tallied up how many vehicle miles traveled (VMT) and congestion-cost dollars would be saved if all of these commuters used alternative transportation.12

    For carsharing, we used a slightly different approach. Using ACS data, we estimated the population in each tract matching the target demographics of carsharers.13 With these numbers, we estimated the number of neighborhoods nationwide with strong carsharing potential.14

    On-demand ride services, the newest of the alternative transportation modes we studied, also offers the least available data.15 Our estimates for this mode are thus less detailed.

    For each mode, we compare current usage rates with estimates representing our model’s maximum possible usage.

    A more detailed description of our methodology for capturing the existing and potential reach of alternative mobility approaches can be found in appendix B.

     

    Explore our collection of research on smart mobility at the links below.

    • Key findings from the smart mobility study
    • The promise of smart mobility
    • Ridesharing
    • Bike commuting
    • Carsharing
    • On-demand ride services
    • Alternative transportation atlas (interactive map)
    • Impact by metropolitan area (interactive table)
    • FULL REPORT—Smart mobility: Reducing congestion and fostering faster, greener, and cheaper transportation options
    Credits

    Written by: Peter Viechnicki, Tiffany Fishman, William D. Eggers

    Cover image by: ilovedust

    Acknowledgements

    The authors would like to thank the following individuals for providing helpful input into this research: Steve Keathley and Jim Templeton of Deloitte Consulting LLP; Kathryn Alsegaf and Maureen Johnson of Deloitte Touche Tohmatsu Limited; Bharath Gangula, Steve Schmith, Daniel Byler, Patricia Buckley, and Danny Bachman of Deloitte Services LP; Peggy Tadej at the Northern Virginia Regional Council; Allen Greenberg at the US Federal Highway Administration; Lisa Rayle of the University of California, Berkeley; Todd Litman of the Victoria Transportation Policy Institute; Kris Keith of the Central Texas Regional Mobility Authority Support Team; Carl Eppich, Ben Lake, Rick Harbison, and John Duncan of the Greater Portland (Maine) Council of Governments; Lori Kaplan and Andrew McGee of the Central Indiana Regional Transportation Authority; Bruce Wright of the Fairfax Alliance for Better Biking; and Elizabeth DeJesus of the North Florida Transportation Planning Organization; and Robert Poole of the Reason Foundation.

    The authors would also like to thank Kenny Ling, Amit Shivpuja, Clare Stankwitz, Zach Whitman, Zac Andereck, and Matthew Gentile for their assistance with the geospatial components of this project. The authors would like to extend special thanks to Pankaj Kishnani for his extensive research support, and also thank Vikrant Jain, Mohinder Sutrave, Pulkit Kapoor, Amrita Datar, Mahesh Kelkar, and Nikita Shah of Deloitte Services LP—India for their contributions to this research. Finally, we gratefully acknowledge the congestion data provided by the Texas Transportation Institute in their 2012 urban mobility report, which was central to our calculations.

    Endnotes
      1. Texas Transportation Institute (TTI), 2012 urban mobility report, December 2012, p. 1, http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/mobility-report-2012.pdf; Bureau of Economic Analysis (BEA), Regional Accounts Program, http://www.bea.gov/newsreleases/regional/pce/pce_newsrelease.htm.  We divide TTI total congestion costs divided by total 2012 US population of 314,112,078 and factor in percentage of total US personal consumption expenditures according to the BEA. View in article
      2. Ibid. View in article
      3. INRIX, “Americans will waste $2.8 trillion on traffic by 2030 if gridlock persists,” October 14, 2014, http://www.inrix.com/press/americans-will-waste-2-8-trillion-on-traffic-by-2030-if-gridlock-persists. View in article
      4. 2008 dollars. See Todd Litman and Eric Doherty, “Transportation cost and benefit analysis II,” Victoria Transport Policy Institute, January 2009, pp. 6–11, http://www.vtpi.org/tca/tca0506.pdf. View in article
      5. Litman and Doherty, “Transportation cost and benefit analysis II,” pp. 5.6–2 View in article
      6. Texas Transportation Institute, 2012 urban mobility report, exhibit 12, http://d2dtl5nnlpfr0r.cloudfront.net/tti.tamu.edu/documents/mobility-report-2012.pdf. View in article
      7. Interview by the authors with Sonja Heikkilä, Helsinki city transportation engineer, October 23, 2014. View in article
      8. Leon Kaye, “Helsinki mulls a future free of car ownership,” TriplePundit, August 6, 2014, http://www.triplepundit.com/2014/08/helsinki-car-ownership/. View in article
      9. Wendell Cox, “Driving alone dominates 2007–2012 commuting trend,” New Geography, October 9, 2013, http://www.newgeography.com/content/003980-driving-alone-dominates-2007-2012-commuting-trend. View in article
      10. David Alpert, “What’s fastest: Walking, biking, transit, or driving? It depends,” Greater Greater Washington, June 25, 2014, http://greatergreaterwashington.org/post/23365/whats-fastest-walking-biking-transit-or-driving-it-depends/; John Stevenson, “Bikes faster than public transport for most London journeys under 8 miles,” road.cc, September 16, 2013, http://road.cc/content/news/93687-bikes-faster-public-transport-most-london-journeys-under-8-miles. View in article
      11. See appendix B for details on how we estimated potential rideshare and bike commuters. View in article
      12. It’s important to note that our approach is an idealized approach. We’re calculating a ceiling of what the potential could be if technology, economics, and cultural shifts align to remove almost all barriers to alternative mobility. View in article
      13. Percent one-person households high; percent households with children low; percent rental households high; percent residents with bachelor’s degree or above high; percent transit users and walkers high; percent households with no vehicle high; and housing units per acre high. View in article
      14. And totaled up the potential reductions in car ownership (projected reduction of 0.23 vehicles per household for carshare members), and calculated congestion savings, cost savings, safety improvements, etc. View in article
      15. Note: Uber will begin making its anonymized trip data available to cities in 2015. For more information, see Emily Badger, “Uber offers cities an olive branch: Your valuable trip data,” Washington Post, January 13, 2015, http://www.washingtonpost.com/blogs/wonkblog/wp/2015/01/13/uber-offers-cities-an-olive-branch-its-valuable-trip-data/. View in article
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    Peter Viechnicki

    Peter Viechnicki

    Manager | Deloitte Services LP

    Peter is a strategic analysis manager and data scientist with the Deloitte Center for Government Insights, where he focuses on developing innovative public sector research using geospatial and natural language processing techniques.

    • pviechnicki@deloitte.com
    • +1 571 858 1862
    Tiffany Fishman

    Tiffany Fishman

    Senior Manager | Deloitte Services LP

    Tiffany is a senior manager with the Deloitte Center for Government Insights. Her research and client work focuses on how emerging issues in technology, business, and society will impact organizations. She has written extensively on a wide range of public policy and management issues, from health and human services reform to the future of transportation and the transformation of higher education. Her work has appeared in a number of publications, including Public CIO, Governing, and EducationWeek.

    • tfishman@deloitte.com
    • +1 571 882 6247
    William D. Eggers

    William D. Eggers

    Executive director

    Bill is the executive director of Deloitte Services LP’s Center for Government Insights where he is responsible for the firm’s public sector thought leadership. His latest book is Delivering on Digital: The Innovators and Technologies that are Transforming Government (Deloitte Insights, 2016). His eight other books include The Solution Revolution: How Government, Business, and Social Enterprises are Teaming up to Solve Society’s Biggest Problems (Harvard Business Review Press 2013). The book, which The Wall Street Journal calls “pulsating with new ideas about civic and business and philanthropic engagement,” was named to ten best books of the year lists. His other books include The Washington Post best seller If We Can Put a Man on the Moon: Getting Big Things Done in Government (Harvard Business Press, 2009), Governing by Network (Brookings, 2004), and The Public Innovator’s Playbook (Deloitte Research 2009). He coined the term Government 2.0 in a book by the same name. His commentary has appeared in dozens of major media outlets including the New York Times, Wall Street Journal, and the Washington Post.

    • weggers@deloitte.com
    • +1 571 882 6585

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