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At the proving grounds of Alliance, Texas, the private and public sectors work together to test out new ways to move goods and people. Host Tanya Ott explores the future of mobility with Mike Berry of Hillwood Partners and Rasheq Zarif of Deloitte.
Tanya Ott: Imagine you live in a large city where cars rule. You want to eat dinner on one side of town before going to an event on the other side of town. You could take public transit, if it exists, or your car if you can stomach the traffic.
Or, what about another option.
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Mike Berry: We will, in certain urban markets, develop vertiports, which will be basically the heliports of the future …
Tanya: Think ridesharing, but for the sky—in an unmanned helicopter drone.
Tanya: Sounds like the Jetsons, right? It not as far off as you might think.
Mike: Uber, who’s been one of the leaders in this, is pushing for initial testing in urban markets by 2023. That’s three years from now. And that’s very doable.
Tanya: That’s Mike Berry. He’s the president of Hillwood Development Company, which has a 26,000-acre project going outside Dallas-Fort Worth where companies like Uber Elevate and Amazon are testing new technologies that could revolutionize the way we move people and products.
Mike is one of the guides for our conversation today. The other is Rasheq Zarif.
Rasheq Zarif: I’m the Future of Mobility tech sector leader at Deloitte. When people ask, what is future mobility, it’s looking at how is emerging technology changing the pace and disrupting how people and goods move around the city and even beyond.
Tanya: I’m Tanya Ott, and this is Insights In Depth, where we take a deep dive into the issues that matter to business today. Before we get to sky taxis, I wanted to hear more from Mike about that development in Texas.
Mike: You have literally thousands of truck movements each day occurring between fulfillment center to fulfillment center, or airport to manufacturing plant or rail hub to the other. If you were here today, you’d be seeing literally hundreds of trucks passing from point to point within this zone or within this development. And then with the airport at the center and major air freight hubs in the form of FedEx and Amazon. You’ve also got a huge volume of product[s] coming in and out on a regular basis via aircraft and being offloaded. So, what we’re doing is taking all of that movement of freight that’s happening in all different modes and we’re trying to put these new technologies, autonomous trucks, the systems that will track the movement of containers and the movement of freight from point A to point B, and put those in place to create a more efficient environment. So, it’s really about taking a huge zone of commerce movement already, and we’re applying technology to cause it to happen more efficiently and happen faster.
Tanya: The property we’re talking about is Alliance, Texas—and to an extent, it was created around the idea of testing different kinds of transportation options. At first, it looked at the role an industrial airport could play in the economy of a region. Then it expanded to include major inland rail hubs right next to that airport. Then they worked with state and federal governments to build a state-of-the-art highway system linking all these components together. And now?
Mike: What we’re seeing now is the application of technology into all of those systems and the efficiencies that are created, whether it be managed lanes, toll lanes, and the way we’re tracking movement of traffic and improving movement of traffic, whether it be freight or more passenger vehicles. And the way we’re moving freight through our intermodal and rail hubs and through our airports into a distribution fulfillment center or a manufacturing process and then out to the market. The technology additions, on top of our core transportation infrastructure, formed the basis of everything that we’re doing with Deloitte on building this platform for the future of mobility.
Rasheq: When you look back at President Eisenhower and what he enacted in 1956 with the Federal Highway Act to really put in the money to connect the cities and most importantly, the country together—that was a significant innovation at the time from the point of the invention of the automobile in the late 1800s to how to connect cities together. The points that you mentioned, Mike, are really important because you have been in the forefront on taking it to the next step in driving innovation around the movement of people and goods.
Cities are getting more dense. There’s an increase in population and a shift of people that want to live in cities. The current methods and modes of public transportation that have been set forth are hitting a certain saturation point. And it has a lot to do with the emergence of digital technology that has enabled alternative forms of transportation, and that has really evolved around the development of GPS-enabled mobile devices in the last 10 to 12 years that brought out on-demand rentals, ride-hailing, bikesharing programs, e-scooters, and now even with the development of EVs and the autonomous vehicle space. And it’s crazy how it has just all exploded in the last 10 years, or even in the last two to three years.
Mike: One other thing that is really evolving, and it's because of technology, is the private sector is beginning to infuse a lot more engagement and lead to the transformation of mobility and transportation. Historically, all those things I talked about—airports, rail, highways, with the exception of rail, which is, you know, driven by private companies, but it’s almost a quasi-public transportation industry—most of our transportation over the years has been controlled by the public sector and the funding has come from the public sector. And to your point, Rasheq, we’re going to really see the private sector developing these new products and these new technologies to run these products, [which] is going to have much more of an influence on the changes that will occur. They also bring something that is desperately needed in our country to the table and that’s private capital. So, they don’t just bring entrepreneurship and innovation, but they bring capital to these big infrastructure and mobility and transportation system improvements that are needed. The public sector just can’t fund it any more like we have in the past. That’s the real positive of this change that we’re beginning to see across the whole mobility ecosystem.
Rasheq: What we’ve seen in the last few years is that startups, corporations, and even public sector entities, have been focusing on individual pilots—single use cases in a very much controlled environment to just prove out a technology. The challenge is that, in order to take it to the next level, we need to be able to scale that. And in order to scale, these technologies can’t work in silos. They have to work in conjunction with other complementary or even competitive assets and services that might be developed over time.
And so our exploration is really trying to help find an ecosystem to connect all these different pieces together so that it can scale at a faster rate. And that is what is unique about Alliance, Texas: You have the industrial airport of Alliance Airport. You have the intermodal yard that brings in more than one million containers a year to the area. You have more than 20 million square feet of distribution centers, logistics spaces, manufacturing facilities. And you have a lot of the major key players having operational capabilities on site. And then you talk about the connectivity services, the infrastructure development, and so on and so forth—it’s primely positioned to help emerging tech to come together with other corporations to scale. And when you think about the size of Alliance Texas, it’s more than 26,000 acres. I mean, that’s larger than the size of Manhattan. So, it’s a real-world scenario where you can come together and build an integrated mobility solution that can be replicated elsewhere, nationally as well as internationally.
Tanya: Last year Hillwood brought together a diverse set of stakeholders to identify priority mobility use cases to better understand their needs. What did you hear from them?
Rasheq: A lot of the conversations that we’ve had with the various stakeholders came down to the point of they can’t get over the hump of developing a proof-of-concept around the technology and then proving out the business model. In fact, the challenge we saw with a lot of the corporations that we spoke with is unless they get lucky in developing the partnership or relationship with another organization or getting the right necessary funding to help get over the hurdles of the initial development of some of these technologies and solutions, it’s causing a lot of hiccups. And when we talk about the development of this ecosystem at Alliance, Texas, the innovation zone itself, it opened their eyes in the sense of realizing, wait, we can use our current operational facilities, we can use and partner with other corporations that are complementary in nature, or even considered “frenemies,” to be able to advance the development of these emerging techs to help our business from an efficiency standpoint, from reducing inefficiencies around the administrative side of their business, helping with respect to congestion on the road. We talk about climate change in the sense of reducing emissions and we talk about electrification—these are different aspects that they saw as an opportunity based off the pain point that they’ve identified.
Mike: Another big takeaway from our workshops from the customers and the users themselves has been that they need more engagement with the public sector and with the regulatory bodies. We can bring all of the public sector stakeholders to the table at the same time—from our relationships with NASA and the FAA—as it relates to all of the unmanned aircraft initiatives that are happening in the drone world and the VTOL (vertical takeoff and lift) world, being able to bring them together to write a set of rules and guidelines for operations and testing in this dedicated zone. We can bring the surface-transportation regulators together in the form of the federal government and the state and local government to write the initial rules and guidelines so that we can stand up these operations more quickly and get to an amount of testing that will ultimately prove up the safety case, as well as the economics, the business case, for these new technologies. We’re truly trying to make it a public-private partnership because the regulatory hurdles in all of these new technologies will be the long pole in the tent in determining how fast we get to market.
Tanya: Can I ask a real quick question, because I want to clarify. You use the word “VTOL.” What does that mean?
Mike: VTOL. Vertical takeoff and lift. You’ve seen some of the models that many of the manufacturers are showcasing now on the market, about how we will develop this urban air mobility system from dense urban to dense urban. These are rotor craft aircraft for passenger movement and for freight movement. Many of them that are being developed now are using battery technology and [are] electric-powered as opposed to traditional helicopters running off on Jet A or traditional fuel. So, the VTOL product that’s emerging out of this is a very cool-looking, state-of-the-art, almost Jetson-like set of aircrafts that will be the future of urban air mobility.
Tanya: At the Consumer Electronics Show earlier this year, there was a panel conversation that you guys were involved in, that talked about drone-like helicopters being the next Uber. So, we really are talking about these VTOL devices or whatever that are going to move me from a restaurant to a theater?
Mike: You’ll still have a last mile connection, but the vision is that through a ground-based network that largely already exists between operators like Uber and Lyft, who’ve developed a very sophisticated network of ridesharing and ground movements, we will, in certain urban markets, develop vertiports, which will be basically the heliports of the future, fully integrated passenger transition facilities that will allow the surface vehicle to arrive at the vertiport, the passenger to transfer from a vehicle into a VTOL, through a very unique experience as if you would go passing through an airport terminal today, but much more futuristic and much more efficient. And then you’ll leave in your aircraft at that vertiport, which is centrally located in an urban zone, and you’ll fly to another vertiport in an urban zone. And at the other end, your last mile connection, your vehicle connection will already be there. You’ll get out of the VTOL, you’ll get into your surface autonomous vehicle, possibly, and you’ll travel to your ultimate destination. So, it’s a way to bridge the congestion and the time that is slowing down our movements within urban zones by using the surface network that’s already been built to tie into an urban air mobility system that will just allow you to hop over the ...
Tanya: Hop over the city, basically. Hop over all of that surface space. Obviously, nobody’s going to hold you to this, but what’s the timeline for something like that?
Mike: Uber, who’s been one of the leaders in this, is pushing for initial testing in urban markets by 2023. So that’s three years from now. And that’s very doable. The strategy in a lot of these markets, whether it be New York City, whether it be L.A., whether it be Dallas/Fort Worth, whether it be some global cities that are also being looked at like Singapore, would be to stand up the air connection business with traditional helicopters. And that accomplishes two things in the interim, before we get to commercialization. It’ll prove up the business model and the demand base. But it will also allow the FAA and the other airspace regulators to set the box or the envelope, if you will, within urban zones for these aircraft to work, so that they don’t become in conflict with the traditional commercial and other aviation activity in an urban market. We’ll do that for three or four years and hopefully we’ll prove up the airspace and prove up the technology. We’ll insert VTOLs in place of the helicopters during that time and then we’ll be commercial. It could be as early as 2025. It may take a little longer. To my point earlier—it’s all going to be about how we can create environments such as what we’re trying to do here at the Alliance Texas Mobility Innovations, where the OEMs—the original equipment manufacturers—and the systems providers and the operators can accelerate the proof of concept through a testing environment where they can do multiple repetitions.
Tanya: I’m always really interested when we talk about technologies like this —VTOL would make things perhaps more efficient for people who want to move from one place to another place, but what are the implications for how land might be used in some cities if we were to deploy major systems like this?
Rasheq: There are considerations when you think about, what is that noise? What about potential safety considerations? [What about] pricing—is this going to only
Tanya: I want to talk a little bit more about some of the use cases, because we were talking about transporting people and things. But Mike and Rasheq, you both mentioned, of course, that transporting goods and materials is really big in this as well. What are some of the biggest use cases that you’re exploring in that arena?
Mike: I’m glad you brought that up, because we skipped over one key piece on the air side, [which] is a lower-hanging fruit and maybe faster to prove up and stand up, and that is the movement of freight and packages using drones that are now being developed that have the capability of heavier lifts. So we’re specifically working on some use cases that will be operational in the next few months, that would showcase, for instance, how a drone capable of lifting a 70-pound package could pick that up autonomously in, say, an intermodal hub or another distribution center, and carry that package to an air freight hub, for instance, to a FedEx hub or an Amazon hub, which are located here, which could then be loaded and taken off. Or more directly to the consumer. We haven’t really talked about this part of our Alliance Texas platform, but there are 15,000 single-family rooftops here that are in a master-planned community, so we’re looking at building drop pods in the centers of these neighborhoods where these drones could actually take that package and drop it in the drop pod and then the neighbor would be able to go to that drop pod and get their package essentially on demand. Those are specific examples of how we can use this test bed to stand up applications both on the B2B [business to business] side and on the B2C [business to consumer] side with using these technologies in delivering freight.
On the surface side we’re working on standing up—and this will happen very soon—a use case where an autonomous truck will pick up a container inside the intermodal hub and move that container autonomously several miles to a major fulfillment center that’s located here in the platform and/or move it to an existing manufacturing operation, all autonomously. And we’ll be able to repeat those sorts of activities over and over again to begin to perfect both the safety case and the business case for efficiency and cost savings. So, some pretty exciting opportunities with the platform.
Tanya: One final question for you both and that is: As we are in the early stages of this fourth industrial revolution, what are the biggest challenges?
Mike: One of the biggest challenges is one we’ve already touched on and that is the regulatory environment will dictate how fast these technologies are integrated into the marketplace. And part of that will include the ability of the manufacturers and developers of all these new technologies to prove up the safety case, because safety will be first and foremost the paramount concern. And then secondly, in urban markets, just pure community acceptance. We’re going to have to be able to showcase these technologies to the community in a way that they can be convinced that they can be accepted into the broader market, which will clear the way for a lot of the regulatory approvals to move. And back to what we're doing, with a 26,000-acre platform in one of the fastest growing regions of the country, the Dallas Fort Worth area, we have the ability to create an environment where both the regulators and the community can watch these products being tested and developed and begin to get comfortable as we move forward with the safety case and the efficiencies of the technology so that they hopefully can move to market faster. But that will be the challenge. We’ll have to get past the mystery of freight in autonomous trucks or the movement of people on autonomous vehicles or drones flying across urban markets or VTOL. We’ll have to get past that, and the only way to get past that is be able to show people that it works and let them see. And that’s what we’ll be able to do here.
Tanya: Mike, Rasheq—thank you so much for joining us today. It’s been a great conversation and a really interesting project that you’ve got going there.
Mike and Rasheq: Thank you, Tanya. My pleasure. Lot of fun.
Tanya: Mike Berry is president of Hillwood, company operating the Mobility Innovation Zone in Alliance, Texas. Rasheq Zarif is the Future of Mobility tech sector leader at Deloitte.
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