CORPORATE MOBILITY BREAKTHROUGH 2020 · CORPORATE MOBILITY BREAKTHROUGH 2020 Lukas Neckermann with...

CORPORATE MOBILITY BREAKTHROUGH 2020

NeckermannS t r a t e g i c A d v i s o r s

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CORPORATE MOBILITY BREAKTHROUGH 2020

Lukas Neckermannwith Tim Smedley


Copyright © 2016 Lukas Neckermann.

The moral right of the author has been asserted.Neckermann Strategic Advisors is a trading name of Neckermann Ltd.

"The Mobility Revolution" and "Corporate Mobility Breakthrough" are trademarks ofNeckermann Ltd. registered in England and Wales (Company Number 08783735).

For more information, see www.neckermann.net

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Disclaimer

No part of this book can be transmitted or reproduced in anyform including print, electronic, photocopying, scanning,mechanical, or recording without prior written permission fromthe author.

Due to the highly topical nature of this book and rapidlyevolving technology, no assumption of accuracy can be madebeyond the date of the first publication. While the author hastaken utmost measures to ensure the accuracy of the writtencontent, all readers are advised to follow information herein attheir own risk. The author cannot be held responsible for anypersonal or financial damage caused by misinterpretation orobsolescence of information.

The author and co-author have conducted all interviews unlessotherwise noted. Quotes, facts and excerpts in this book havebeen gathered independently by the author and, whereapplicable, are cited under fair-use principles. In these cases thecitations remain the copyright of the original author. Where nosource is explicitly noted, the quote, fact or excerpt has beenverified across multiple media.


Contents

Introduction ixAuthor’s Introduction xi

Chapter 1: Have We Reached Peak Car? 1Peak car: the decline of the automobile 4Growing rejection of road deaths and injuries 7An irrational attachment: the world legislates for change 10

Chapter 2: The Digital Generation and theSharing Economy 17

Carsharing, ride-sharing or on-demand logistics? 23Can both carsharing and ridesharing co-exist? 26Sharing enters the commercial world 29

Chapter 3: The Autonomous Vehicle Revolution 33The benefits of going driverless 41Autonomous means electric: the simultaneous rise of EV 43

Early adopters and the corporate world 48

Chapter 4: Business Travel Transformed 55B2B Carsharing and ridesharing 60Employee perks: the death of the company car 66Mixed mode travel: mobility as a service 71

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Chapter 5: Impact on the Automotive Industry 83Market disrupters: Silicon Valley Unicorns 87The OEM response: adapt or die? 89Market consolidation: what will emerge by 2020 95

Chapter 6: Trucks, Fleets and Industrial Uses 99Platooning: efficient, 24/7, driverless haulage 102Off-road: the industries that ditched their drivers 105Robots taking our jobs 108

Chapter 7: Bikesharing, E-bikes and CycleSuperhighways 113

E-bikes and intelligent mobility 117The infrastructure challenges for mixed mobility 121

Chapter 8: Sharing, Renting, Leasing andInsuring 127

Carsharing, rentals and leasing: converging models 132

Insurance challenges: who is liable? 136Insurance opportunities for new business models 142

Conclusion: How Quickly Will It Happen? 147Political will (they or won’t they?) 150Market and technology wobbles 153Corporate Mobility Breakthrough 2020 156

About the Authors 159

viii Corporate Mobility Breakthrough 2020


Introduction

The Corporate Vehicle Observatory is a neutral knowledgesharing platform dedicated to all corporate fleet stakeholderswhether they are private or public companies, fleet owners, fleetlessors, car manufacturers or media.

The CVO was founded in 2002 by BNP Paribas and itssubsidiary Arval, specialized in the full service leasing ofcorporate fleets.

The Corporate Vehicle Observatory is present today in 15countries across Europe, with a mission to inform all theplayers of the industry, and engage them in discussion aboutthe developments of corporate mobility in its broadest sense.Safety, alternative energies and fuel, social changes andtechnological developments are just some of the key industrytrends that the CVO observes and analyses both at local andnational level.

Lukas Neckermann is a thought-leader with whom we sharethe same interest in the future evolution of the company car andcorporate mobility in general. After publishing a special editionof his first book, The Mobility Revolution, last year with theCVO, Lukas is back with a very in depth analysis of the futureof Corporate Mobility by 2020, highlighting the mainchallenges of today’s working model… His book is not“unrealistic science fiction” as he likes to quote… this ishappening and this book gives a view of all the changes that will

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occur in the coming years and why these changes need to betaken into account today.

I hope you will enjoy this publication as much as we did.

Virginie ChassardHead of CVO

x Corporate Mobility Breakthrough 2020


Author’s Introduction

We stand at the cusp of a foundational shift in how people andgoods move about our cities and countrysides. As a result,companies and organisations of all sizes and kinds will need toevaluate their own business models for future-fit, question theirprojections, modify their assumptions and amend theirstrategies. We are already seeing this happen throughout theautomobile industry – virtually all major players have redubbedthemselves, claiming now to be “mobility providers” rather thanmerely original equipment manufacturers (OEMs), and we willsee it happen throughout associated industries as well.

Corporate fleets represent well over a quarter of new vehiclessold throughout Europe and are often more progressive with theadoption of new technologies than individuals. Given the scaleof this transformation (and more broadly, simultaneous changesin the future of work itself ), we felt it was time for acomprehensive deep-dive into impending changes on corporatemobility. This book is meant to be both an introduction and aguide, with a timeline through 2020 and beyond. Naturally,not all countries and regions will adopt the changes at the sametime or the same pace, but one thing is clear: they will happenmore quickly than most planners expect.

Since publishing our first book and coining the term for thistransformation as “The Mobility Revolution”, we’ve had thepleasure of supporting a number of organisations across Europeand North America in their strategic aims. The Corporate

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Vehicle Observatory has been particularly responsive and opento our ideas. We are truly grateful for their ongoing support andsponsorship of this second book.

Lukas NeckermannManaging Director

Neckermann Strategic Advisors

xii Corporate Mobility Breakthrough 2020


Chapter???? 1

Chapter 1:

Have we reachedpeak car?

NeckermannText2_240516.qxp_Layout 1 20/07/2016 09:30 Page 1

“Young people arenot just falling out oflove with the car, butnot falling in love withit in the first place.”


Welcome to the Mobility Revolution. We are livingin a time of unprecedented change in the worldof transport. It is transforming our lives as we

become increasingly nomadic and urbanised. Fundamentally,the working models that we have known since the first IndustrialRevolution are being challenged. Much of this has to do withthe smartphone in our pockets and the confluence of political,economic, social and technological trends towards renewableenergy, globalised online marketplaces, robotics and socialconnectivity. But all of these come together around one thing:mobility.

We are moving toward environmentally-friendly,productivity-enhancing, electric, autonomous and sharedtransport. The cost of ownership of private vehicles will becomeunattractive for many – perhaps most – users from thebreakthrough year of 2020 onwards (which is no arbitrary year,as we will discover in this book).

This will change the way we live and consume, but it will alsoradically transform the business world too. It will change officespaces, logistics and remuneration packages. It will not just

3


passively influence corporate mobility (the transport that is boughtand paid for by businesses, either as necessity or as a perk). Businesswill in fact be early adopters. Just as individuals will shun theircars, organisations worldwide will progress to more efficient andreliable alternatives to grey-fleets and pool-cars. Employees incities will be encouraged to use car clubs, bikesharing and publictransport; goods will be transported via driverless vans.Autonomous trucks will efficiently flow bumper-to-bumper,sensor-to-sensor, while a single human operator in the frontvehicle types away on a laptop or smartphone. Commuters willcatch up on emails or the latest Netflix box-set as they ride towork. Driving will transition from a necessity to a hobby.

What I’m describing isn’t unrealistic science-fiction, butcan already be seen in advanced pilot stages on roads all overthe world.

But before we discover how and where, and what it willmean for the world of work, we need to look at the why. Is thisa technology-driven revolution, or is it being led by societalchange? Has the way we live already transformed so dramaticallythat it is in fact the technology – and the automobile industry –that is itself playing catch-up?

Peak car: the decline of the automobile

In January 2015, global asset management firm Schroders issueda worried note to investors titled “The end of the road: has thedeveloped world reached ‘peak car’?” Schroders sector specialistKatherine Davidson wrote: “longer-term data suggest that,cyclical tailwinds aside, the market for automobiles in developedmarkets could be in structural decline. For the past decade, thedeveloped world has shown signs of hitting ‘peak car’: a plateauin vehicle ownership and usage”.1

4 Corporate Mobility Breakthrough 2020


From a business perspective, total cost of vehicle ownershipin many cases has risen over the past years as a result of roadtaxation, congestion charging and parking costs – which iscausing fleet managers and finance directors to take note. Effortsto optimize and minimize commercial vehicle routing abound,now through the help of GPS navigation and telematics. Somecompanies now even guide and route their salespeople to greaterefficiency.

In most of Europe (except Germany), kilometers driven percapita have shown a decline since the early 2000s. Car sales inthe European Union fell by almost 25 percent between 2007and 2013. In Italy, more bikes were sold than cars in 2011, forthe first time since the Second World War.2 And even inGermany, the last bastion of petrol-heads where the automobileindustry is directly championed by the Chancellor, the trend isbeginning to show in larger cities. Berlin saw vehicle densitydecrease for the first time in 2015, and even BMW’s hometownof Munich has seen the number of cars per resident fall slightly.3

Trends amongst the younger generation are most telling. Carownership among 18 to 29-year olds in Germany dropped anastonishing 44 percent between 2000 and 2010 – from 424 to239 cars per 1,000 persons in that age group.4 The proportion ofthe population by age who have a driving licence in the US, UKand across Western Europe, is falling. In 1995, some 43 percentof 17-20 year-olds in the UK held a full driving licence. By 2014that plummeted to just 31 percent. The decrease is sharpestamong young men, which dropped from 51 percent driving-license ownership to just 30 percent.5 In Italy, driving licenceapplications decreased by 19 percent – or almost 200,000 – in2011 alone.6 Young people are not just falling out of love withthe car, but not falling in love with it in the first place. In Francethe average age of the new car buyer is well over 50; under-30saccount for less than 10 percent of new-car customers.7

Chapter 1: Have We Reached Peak Car? 5


The automotive industry has been feeling the hit like neverbefore. In the first decade of this century, the industry averageda two percent per annum growth rate, trailing behind globalGDP (2.5 percent) and – perhaps most tellingly – behind thetotal mobility market (3.5 percent). Much of that growth wasseen in emerging markets. In the mature American, Europeanand Japanese markets, industry revenues from car andmotorcycle sales shrank during 2000-2010 at an estimated -0.4percent annually. Mainly as a result of carsharing andridesharing, Morgan Stanley expects virtual stagnation in vehicleproduction from around 2022 onward.

This isn’t simply an economic trend. Data from the UKsuggest that car use is declining fastest amongst highest incomegroups.8 The affluent are first in choosing to ditch the car.Beneath the surface is – among other things – an increasingpreference for city living, and city centres in particular. As citiesstrive to become cleaner and more liveable, young people aremoving into city central districts, reversing a long-term preferencefor suburbs. Alternative forms of travel are cheaper and hassle-



free compared to finding a parking space and insurance. Usingpublic and shared transport rather than individual car ownershipis no longer an undignified option for the urban poor, but thechosen option of the urban middle class.

In 1950, 70 percent of the world’s population lived inrural areas. Over the next 60-plus years, the world’s populationbegan to shift into urban areas in search of work andexcitement. In 2007, for the first time, the global balanceshifted to more people living in urban areas than not. The UNbelieves that continuing urbanization and an additional 2.5billion people will see 66 percent of the world living in citiesby 2050. Leading the way, 75 percent or Europeans alreadylive in urban areas.

Growing rejection of road deaths and injuries

There are an estimated 1.3 million road deaths globally9, morethan those caused by HIV and armed conflict combined (2014figures).10,11 Road traffic injuries rank among the four main causesof death for children above five and are the number one killer ofteenagers. The proportion of road fatalities from motorcycles andmopeds has increased steadily since 2000, with the highest shareof rider fatalities recorded in Greece (38 percent), Italy (29percent) and France (26 percent). Vulnerable road users are alsodisproportionately injured. On average, London buses hit twopedestrians or cyclists per day between 2007-2012.12

The culprit is clear. Ninety-four percent of crashes are due tohuman error, according to the US National Highway TrafficSafety Administration in 2015.13 As a society, since theintroduction of motorised transport we have accepted road-deathsand injuries as an unavoidable result of our quest for speed andefficiency – merely a factor of life. Yet in the same way that



research has gone into fighting disease and aging, the emergenceof autonomous vehicle technologies is showing a promise fortruly accident-free driving for the first time.

While “Zero Accident” driving was a mere dream as recentlyas twenty years ago, it is now rightfully causing much excitementand hope.

National and pan-national governments are fully committedto this future, and in many cases are passing legislation to ensureit happens. In 2011 the UN General Assembly proclaimed theUN Decade of Action for Road Safety for 2011- 2020, agreed by100 countries. The goal was to “stabilise and reduce”, from a2010 baseline, the forecasted level of global road fatalities by2020. Meeting this goal could save up to five million lives andprevent up to 50 million serious injuries in the timespan. TheEuropean Union’s own ‘Towards Zero’ plan also aims to see 50percent fewer road fatalities by 2020.14

In addition to road safety, three issues have combined todemand action, and counter the last century’s dominant role ofthe automobile:

1. Pollution levelsWorld Health Organisation research has estimated 5.5 milliondeaths are caused globally per year due to air quality. Particulates,one of the two most serious pollutants emitted from (largelydiesel) exhausts, kill an estimated 40,000 people a year in theUK, second only to smoking. The UK Government’s Committeeon the Medical Effects of Air Pollution has even suggested thatpollution may play a part in 200,000 more deaths.15

While individuals may be driving less, economic growthis actually putting more commercial vehicles on the roads,and urbanisation is heightening the impact in those areaswith the highest population densities. The 317.8 billionvehicle miles travelled on Britain’s roads in 2015 was the



highest rolling annual total ever. In Germany between 1991and 2012, the number of motorised vehicles increased by 16percent and the overall vehicle kilometers driven by 25percent.16 In Italy, where passenger and freight transportdemand is mainly served by roads, between 2001 and 2012,despite limited population growth (5 percent) and economicgrowth (2.2 percent), the rolling stock of vehicles rose by 17percent – primarily by vehicles being held longer.17

To combat the effect of emissions and air-pollution, Norwayand the Netherlands are among the first countries to haveannounced plans for 100 percent of new passenger cars, busesand light commercial vehicles to be zero emission and comprisedprimarily of battery electric and hydrogen fuel cell vehicles.18

2. Congestion On 23 May 2012, Sao Paulo’s underground and commutertrain system drivers went on strike, blocking the public transportsystem for the entire day. A world record traffic jam of 249kilometers developed – people were using more private carsbecause buses were overcrowded. Other finalists in the ‘world’sworst traffic jam’ category include the Beijing-Tibet Expresswayin August 2010, that stretched for more than 100 kilometersand lasted for 12 days. And the Russian M-10 highway,northwest of Moscow, that saw traffic including some 4,000trucks queuing up to 200 kilometers for over three days.19, 20

While such records make the headlines, it is everydaytraffic congestion that has greatest impact on quality of life.Research by TomTom, the GPS maps provider, shows that incities like London, Warsaw, Paris and Marseille, commuterscan regularly expect to add over 60 percent of time to theirmorning and evening commutes due to traffic.21 Just as withroad deaths and injuries, this daily grind has been accepted asfact – that is until people see that alternatives can exist.



3. Decreased economic viabilityINRIX has calculated the impact of congestion as over £3billion per year.22 This is most keenly felt by businesses in theway of lost productivity. In the US, commuters lose over 42hours a year in traffic congestion – and that’s just theunplanned part, not including the actual, planned travel time.In other words, a full, productive working week is lost tositting in traffic per employee every year; just halving trafficcongestion would therefore increase productivity by almost1.5 percent.23

According to Harvard Business School professor RosabethMoss Kanter’s 2015 book Move, the cost of congestion inwasted time and fuel is an estimated $121 billion in the USalone. “If people can’t move, if goods are delayed, and ifinformation networks can’t connect,” she writes, “theneconomic opportunity and quality of life deteriorate”.24

An irrational attachment: the world legislates forchange

Are our business models and lifestyles too wedded to the vehiclesin our lots? Is the momentum of preserving the status quo too

“Halving trafficcongestion wouldincrease productivityby almost 1.5percent.”



great for a new era of mobility? Can we emotionally detachfrom our metal companions?

KPMG’s 2014 trends paper “Me, my car, my life”, suggestedthat owning a car “is an irrational economic decision… [a] newcar loses 11 percent of its value the minute you drive it off thelot. It then sits idle approximately 95 percent of the time, eitherin your driveway or in the parking lot at work. So why do it?Because cars are dead-on awesome? Not so much.”

For Generation X and older, the automobile hastraditionally been as much a part of our identities as our name.When I went to school, social status came down to whetheryou drove a Ford or a Chevrolet. The same mentality continuesas we grow older: teens share stories about their first car andmiddle-aged managers discuss the merits of their most recentcompany-car.

Or do they? Over the next 10-15 years we will see in-carapps, not hardware, become increasingly dominant during officewater-cooler discussions. Already when an Apple user looks at aSamsung, they see Lyft, Uber, Snapchat and Whatsapp longbefore they notice the hardware logo. In the same way, theautomotive brand on the steering wheel will soon becomeirrelevant. A new mobile generation will prefer Moovel, Qixxitor Uber. Note the lack of traditional automobile companies inthat list.

In December 2015, Uber – a ridesharing software app thatowns no cars let alone makes any, and has only existed sinceMarch 2009 – was privately valued at $62.5 billion.26 At thesame time, Ford (founded 1903) and General Motors (founded1908) were each valued at around £55 billion – GM onlysurviving bankruptcy via a government bail-out in 2009,ironically just months after Uber had launched.

It is certainly possible (and likely) that we will become justas emotionally attached to a service as to a product. As people



opt for mobility as a service, there will not be a gaping hole leftby the lump of metal no longer depreciating in the parking lot.

This applies in the corporate world just as it does for privateindividuals. Ubeeqo is a B2B fleet management and carsharingsoftware platform that launched in 2008. Their aim is to getcompany employees to feel as free and secure in having transportavailable at any time, whenever they need it, just as they hadwith their fleet or company car. If, with minimum planning,we can have either a car available to us via carsharing, orsomeone to drive us – and if that option is cheaper, and simpler,with fewer regulatory and tax compliance issues, then you’dtake it, right? (More on Ubeeqo and its peers in Chapter Four.)

The statistics show this starting to happen. A simulation ofcar ownership and carsharing trends run by Boston ConsultingGroup (BCG) in 2016 found that the impact of carsharing onnew-car sales in Asia-Pacific, Europe, and the US will seepurchases decline by 792,000 vehicles worldwide in 2021. The

“The automotivebrand on the steeringwheel will soonbecome irrelevant. Anew mobilegeneration will preferMoovel, Qixxit orUber. Note the lack oftraditional automobilecompanies on thatlist.”



greatest loss in sales will be felt in Asia-Pacific, where some462,000 potential vehicle buyers would forgo their purchase,followed by Europe and the US – all this despite increases inworld population and growing middle classes. “Patrons ofcarsharing services,” write BCG, “will generate global revenuesof €4.7 billion in 2021, with the bulk of revenues – €3.2 billion– coming from light users who need a car only for occasionaltrips. Europe will be the biggest revenue-generating region.”27

With an eye toward urban quality-of-life, local governmentsworldwide are moving fast to legislate against the privateautomobile. In Buenos Aires, in order to discourage privatevehicles from entering the city, highway tolls have been increasedfive times since December 2011. Berlin plans to reduce car useto 25 percent by 2025, from 32 percent in 2013. In Italy, Milanstill has a very high level of motorisation, with 72 cars ormotorcycles per 100 inhabitants – but this has decreased by 17percent between 2003 and 2013, thanks in part to a low emissionzone and congestion charge.28,29 In Zurich, a combination ofefforts to streamline available alternatives including carsharingand bikesharing means that motorised individual transport hasreduced from 35 percent of total traffic in 2005 to 28 percent by2012, paralleled with higher public transport usage (42 percent)cycling (8 percent) and walking (26 percent).

Scandinavian countries are particularly prone to aggressiveplanning. Oslo’s city government announced in October 2015that it will completely ban private cars from its city centre by2019. Helsinki announced it would do so by 2025, along witha plan for a fully-autonomous, electric mobility-on-demandsystem.

In a private meeting with a central London boroughCouncillor, I was also told “our aim is to get private vehiclescompletely off the roads in London.” This will result in a mixedmobility model based on the sharing economy, leading to trips



taken by a combination of bikesharing, ridesharing andcarsharing. Research prepared for the American PublicTransportation Association (APTA) in March 2016, integratingpublic transportation with other forms of mobility offers thefollowing key findings:

1. The more people use shared modes, the more likely they are to usepublic transit, own fewer cars, and spend less on transportationoverall.

2. Shared modes complement public transit and enhance urbanmobility.

3. Shared modes will continue to grow in significance, and publicentities should identify opportunities to engage with them toensure that benefits are widely and equitably shared… includinggreater integration of service, information and payment methods.

4. The public sector and private operators are eager to collaborate toimprove paratransit service… drive down costs, increase serviceavailability and improve rider experience.30

When the APTA researchers asked about changes to householdfinances since starting to use shared modes, 20 percent ofrespondents reported they had postponed buying a car, 18percent had decided not to purchase one, 21 percent sold oneand didn’t replace it, and 18 percent (net) spent less ontransportation overall.

The same advantages hold true for companies. Corporatemobility is being transformed by these trends, and organisationsare discovering huge efficiency savings, both in an economicand environmental sense. How businesses respond and adaptwill be key to their commercial success.



Notes

1. Davidson (2015), The end of the road: Has the developed world reached‘peak car’?, Schroders: Talking Point

2. http://www.telegraph.co.uk/finance/newsbysector/transport/9581180/More-bikes-sold-than-cars-in-Italy-for-first-time-since-WW2.html

3. http://www.bloomberg.com/news/articles/2015-08-10/german-car-share-boom-gives-bmw-daimler-dibs-on-young-drivers

4. McKinsey (2012), ‘Mobility of the future: Opportunities for automotiveOEMs’

5. http://www.theguardian.com/money/blog/2014/sep/16/cost-driving-young-people-off-road

6. http://inchieste.repubblica.it/it/repubblica/rep-it/2012/12/18/news/patenti_in_calo-47609542/?inchiesta= percent2Fit percent2Frepubblicapercent2Frep-it percent2F2012 percent2F12 percent2F18 percent2Fnews percent2Fpatente_addio-47608509 percent2F&refresh_ce

7. http://www.theguardian.com/world/2014/nov/09/france-car-ownership-sales-downturn

8. Stoakes (2012), Has car use per person peaked?9. OECD/ITF (2015), ROAD SAFETY ANNUAL REPORT 10. http://www.avert.org/professionals/hiv-around-world/global-statistics11. https://www.iiss.org/en/about percent20us/press percent20room/press

percent20releases/press percent20releases/archive/2015-4fe9/may-6219/armed-conflict-survey-2015-press-statement-a0be

12. Beard, M (2013), ‘Two London buses a day are involved in crashes withcyclists and pedestrians’, London Evening Standard, 2 April

13. National Highway Traffic Safety Administration (2015) “Critical reasonsfor crashes investigated in the National Motor Vehicle Crash CausationSurvey,” February

14. OECD/ITF (2015), ROAD SAFETY ANNUAL REPORT15. Lean, G (2013), ‘Why is killer diesel still poisoning our air?’, The Daily

Telegraph, 19 July16. http://www.oecd-ilibrary.org/docserver/download/7514011ec018.pdf?

expires=1461185241&id=id&accname=guest&checksum=52E24B4FAA11C92C80DBC5C5DDEE334F

17. http://www.oecd-ilibrary.org/docserver/download/7514011ec024.pdf?expires=1461185378&id=id&accname=guest&checksum=2E275AB5A228F4A2883C4728943DB539



18. http://www.hybridcars.com/norway-aiming-for-100-percent-zero-emission-vehicle-sales-by-2025/

19. http://www.autoevolution.com/news/the-longest-traffic-jam-in-history-12-days-62-mile-long-47237.html

20. https://uk.news.yahoo.com/russia-drivers-stuck-120-mile-traffic-jam-023325409.html

21. http://www.tomtom.com/en_gb/trafficindex22. http://inrix.com/press/traffic-congestion-to-cost-the-uk-economy-more-

than-300-billion-over-the-next-16-years/23. http://www.cebr.com/reports/the-future-economic-and-environmental-

costs-of-gridlock/24. http://www.reuters.com/article/us-usa-traffic-study-idUSKCN0QV0A8

2015082625. Kanter (2016), Move, WW Norton & Company25. KPMG (2014), ‘Me, my car, my life’26. http://www.techinsider.io/uber-valuation-vs-market-cap-of-publicly-

traded-stocks-2015-1227. BCG (2016), What’s Ahead for Carsharing? The New Mobility and Its

Impact on Vehicle Sales, February28. http://sootfreecities.eu/measure/traffic-mobility29. https://books.google.co.uk/books?id=ijirihwyruIC&pg=PA146&lpg=PA1

46&dq=italy+fall+in+car+ownership&source=bl&ots=s4uGLQaWTc&sig=LzD1Ck8jHYaZm3qi6TKbjeR0ITo&hl=en&sa=X&sqi=2&ved=0ahUKEwjN_dGzjOjLAhVDVRoKHXnTBg0Q6AEIWDAP#v=onepage&q=italy percent20fall percent20in percent20car percent20ownership&f=false

30. http://www.apta.com/resources/reportsandpublications/Documents/APTA-Shared-Mobility.pdf



Chapter 2:The DigitalGeneration andthe SharingEconomy


“The car wasemotional, it wasfreedom. But now it isonly congestion.”


When talking to fleet managers or even your average‘petrol-head’, it’s often hard to avoid a littlenostalgia. Usually it’s about that chrome-

bumpered first car, polished to impress. But for Johan Seuffert,Fleet Manager for the Stockholm City authority, it’s his vinylrecord collection. “When I was young I had these records athome that I showed my friends. Nowadays I have all the recordsin the world on my phone. I only need the accessibility. It’s thesame with vehicles in whatever carsharing scheme you choose.Millennials are used to these types of sharing. The car is notemotional for them, as it was for my father or my grandfather.”

“We are getting used to paying monthly fees for everythingnow,” Johan continued, as we discussed the recent addition ofcar clubs to his city fleet. “We are getting used to not owning.The car was emotional, it was freedom. But now it’s onlycongestion.”

The next generation of corporate leaders and managers –the ones now entering the workforce and who will take over thecorporate reins in 10 years – are undoubtedly different to anygeneration that has come before. Millennials already accountfor the majority of workers in the United States; across most of

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Europe, they will eclipse the baby-boomers in the workforce by2020. In other parts of Asia, Africa and the Middle East, theyare even the overwhelming majority. The median age in theUnited Arab Emirates is 30.3. In Nigeria, it is just 18.31

The key difference between this generation and those thatpreceded it is that it’s the first to have grown-up with thepersonal computer and smartphone, the internet and socialmedia. They are first generation ‘Digital Natives’ in a worldthat will never be analogue again. This generation also has aclear message: they care about progression, development,corporate values and (contrary to popular belief ) they do havesome loyalty to companies that can offer it. But members ofGeneration Y (and for that matter, Generations Z and Alpha)don’t want a 9-5 schedule and also don’t plan to retire at 65.Unlike their parents, they do not measure the “perks” of a jobin terms of a corner office, bonus scheme or company car. In aPWC study of millennial graduates, only 4 percent rated acompany car as the perk they desired most – far behind agreater vacation allowance or flexible working hours.32

In terms of corporate mobility, the new generations aredemanding companies to rethink. Workers at Google (Number1 on Fortune’s 100 Best Companies to Work For list in 2016)have access to shared bikes, not a personal vehicle. Atheadquarters, they are shuttled to work in a chartered bus fromSan Francisco to Silicon Valley. Google also operates the largestelectric employee carsharing programme in the United States.33

It’s all very far removed from the BMWs and limousinesfavoured by the high fliers of the 1980s.

There are also clear economic constraints in a world withan increasing population and decreasing resources, post theGreat Recession.

When I discussed car ownership (including his own) withScott Le Vine, mobility researcher at the Faculty of Engineering,



Department of Civil and Environmental Engineering, ImperialCollege London, he was convinced that coming generations areunlikely to experience hardware upgrades in quite the sameway. Like many of us, he has gone from generation to generationof car models (in his case, a string of Toyotas).

“If you look at the statistics on poverty,” Le Vine tells me,“it’s rising among under 30s and it’s collapsing among over 60s,over 65s. I think that leaves us with a different view of whyyoung people are living different lives and living in differentplaces, under different circumstances, and driving and travellingdifferently. They face a different set of economic constraintsthan previous generations did at similar points in life… certainlyin the bigger cities it’s very clear that car ownership has gonedown, car usage is going down… young people today are notonly less likely to own cars, they’re less likely to have a drivinglicence. That’s in the UK, that’s in the US, that’s in Australia,Japan, Germany…everywhere that I’ve seen researchers look inthe developed world.”

“And second,” he continues, “the major milestones thatyoung and early middle aged adults go through have beenpushed back. I’m talking about the age at which you leaveschool, the age at which you leave education, the age at whichyou get married, first child, move into your own house, etc. Allof those events are being pushed later to life. And all of thoselife transitions all correlate with driving.”

In other words, while previous generations bought theirfirst car before beginning their adult lives and careers, modernconsumers are getting used to living a life without a car; by thetime they might otherwise buy a car, they have adapted to a lifewithout it.

The technology-enabled ‘sharing economy’ therefore couldnot have arrived at a better time for a generation eager torelease the shackles of debt and ownership. The principles of

Chapter 2: The Digital Generation 21


the sharing economy, as defined by BCG, are simple:“Everything – every product and every service – is sharable, fora price. The sharing economy addresses and meets the needs ofboth buyers and sellers. Those needs can be seen as the threecore principles of the sharing model: value, coverage, and trust.Value in the sharing economy takes shape along severaldimensions. Sharing enables users to bypass the up-frontinvestment in an asset or service as well as the greater costs thatcome with ownership. Instead, they pay for the asset or serviceonly when it’s needed, and they can change the type of asset orservice, or the timing of its use, whenever necessary. For adriver who needs a car infrequently and for short trips, the costof renting for a few hours is significantly less than the totalcost of ownership.”34

The rise of smartphones, social media and especiallye-commerce certainly correlates to lower miles driven. Accordingto Schroders, shopping-trips in the UK have been the categoryof car use that has declined most steeply since 1995. The reportalso remarks on the “remarkable willingness” of millennials to“rent or share rather than own assets – from AirBnB andCouchsurfing to Zipcar and BlablaCar… technologicalimprovements have greatly facilitated these business models. Astudy commissioned by Transport for London suggests that oneshared car results in 11 – 17 fewer cars on the road (either soldor not purchased).”35


“Driving itself hasbecome a distractionfrom daily life.”


I contest that the act of driving itself has itself become adistraction from daily life. Deloitte finds that nearly 50 percentof Generation Y consumers like using a smartphone app fortransport and already plan their travel so they can multitask.36

A staggering 20 percent of American Automobile Associationsurvey respondents said one reason for not getting their drivinglicence was that they could not connect with friends onlinewhile driving. This reluctance to tie your thumbs to a steeringwheel when you could be flicking through apps also paves theway for rapid uptake of autonomous vehicles – but more onself-driving cars later.

These private aspirations are interwoven with career andbusiness expectations. Following the global economic crisis of2008-2012, many countries saw a significant rise in the numberof freelancers in the overall economy. While middle managersand former jobs-for-lifers floundered in unemployment, theentrepreneurial youth took to platforms such as Fiverr andFreelancer. In co-work spaces, such as WeWork, Club Workspaceand Desk Share, many young workers began a career rentingtheir skills – and their desks – by the hour. Hopping into ashared car, invoiced by the hour, therefore takes no mental leapat all.

As Le Vine describes it, “Under certain circumstances havinga car is a… hassle that outweighs the benefits. You have to feedit, you have to change its diaper, you have to leave it somewhereat night. So it makes sense that in a city like London you seethis new trade-off… what my colleague at Princeton, AlainKornhauser, calls ‘buying mobility by the drink rather than bythe bottle’. It is now possible to buy it by the drink, throughcarsharing, through Uber, and that’s what a large number ofpeople do.”



Carsharing, ride-sharing or on-demand logistics?

Let’s get clear on the terminology. Ridesharing (or ridehailing)is about being driven, either by a professional driver, or byanother traveller who just happens to have a car. On aninformal basis, this has existed for centuries (London has hadhackney-carriages since 1662). Today, this is simply enabled byan app – such as Uber and Lyft – that connects riders withprofessional and casual drivers. Fares are based on distance,time and availability, paid directly from the traveller’s credit ordebit card.

Hailing a ride is becoming so ubiquitous in inner-citiesthat it has become a verb ("I ubered it here this morning"), anurban convenience, a lifestyle and an economic choice. It hasbeen embraced by young urbanites and protested against bytraditional taxi drivers with equal enthusiasm. It is an irresistibleforce. In New York, the value of yellow taxi driver medallions(once worth over a million dollars each) reportedly dropped by28 percent by the end of 2015. A New York taxi mogul evencalled for a government bail-out, declaring his industry “too bigto fail”.37


“Uber, Lyft, Gett,Careem and othersare bringingefficiency, speed,and new services tothe stagnant taximarket.”


By January 2016, Uber had completed over 1 billion ridessince its inception. As of May 2016, it provides over 2 millionrides per day worldwide in over 400 cities. Lyft operates in 60North American cities with more than 100,000 drivers, andalso has a reciprocal agreement with the world’s largestcommercial ridesharing operator, China’s Didi Chuxing.BlaBlaCar, the French-headquartered long-distance ridesharingservice, has more than ten million members in 14 countries.38

These services don’t necessarily operate on the premise of‘lower cost means lower quality’ – in fact, they are bringingefficiency, speed and new services to the long stagnant taximarket. According to a US Committee for Review of InnovativeUrban Mobility Services, 90 percent of ridesharing rides in SanFrancisco occurred within 10 minutes of a request at all timesof day, compared with only 35 percent of taxi rides during theday and 16 percent at night and weekends.39 In Los Angeles,London and other cities, competition from Uber has led taxisto grudgingly provide service to previously underserved areas.

Uber sees itself as far more than a mobility company. It’s alogistics company that brings together suppliers and customersof anything that needs to move from A to B, be it people, food,or Christmas trees. When Uber CEO Travis Kalanick camerunner up to Angela Merkel for Time’s 2015 person of the year,it was not for changing transportation, but for “changing thenature of work”. Time assistant managing editor Rana Forooharwrote:

“Kalanick’s idea of progress is simple and sweeping:transportation as ubiquitous and reliable as running water,everywhere, for everyone. And as part of that vision, heexpects to change the way cities operate. On a rainyDecember day in Boston, speaking to local business leaders,he proclaims, ‘I see a world in which there is no more




traffic in Boston in five years’. The crowd chuckles at thehyperbole. Kalanick smiles indulgently but presses the point,and later raises the goal in meetings with his local staff.This time nobody is laughing.” 40

In February 2016, Kalanick tweeted: “Our intention is to makeUber so efficient, cars so highly utilized that for most people itis cheaper than owning a car.” Kalanick was responding to areporter who questioned whether or not Uber would keep rateslow if there were fewer ride hailing competitors. “Uber doesn’tgrow if car ownership is cheaper than taking Uber,” he replied.41

Carsharing, meanwhile, is comparatively humble and softlyspoken but similarly revolutionary. It is essentially a car rentalmodel operated as a club in which members access fleets of carsparked in dedicated spaces or beside the road. Some servicesrequire users to return the vehicle to the point of departure,while other schemes operate on ‘free-floating’ or point-to-pointbasis, which allows users to pick up the car or van from itsallocated spot and then leave it at a different space at theirdestination. There are B2B operators, B2C offerings and moreinformal peer-to-peer (P2P) arrangements. In Europe theleading carsharing clubs include Zipcar, DriveNow, car2go,Flinkster, and Autolib (mainly covering France and London);North America is dominated by DriveNow, Zipcar and car2go;Asia-Pacific has Orix, Park24 and EVCard among others.

Daimler’s car2go brand is now the world’s largest ‘free-floating’ carsharing provider, available internationally at 31locations (16 in Europe, including six in Germany, and 15 inNorth America). Once registered, customers have access via asmartphone app to more than 15,000 vehicles to hire at anaffordable price (eg. 0.29 € per minute in Germany). Via theapp, customers can find, hire and pay for the rental of vehicles.Parking fees, fuel/electricity and insurance are included in the


price and there is no monthly basic fee. Almost half of thecar2go customers are young families, couples and students whouse carsharing in combination with their local public transportnetwork.

Europe leads the world in carsharing, with 2.1 million usersand over 30,000 dedicated vehicles (not including peer-to-peercarsharing vehicles). In Germany alone, some 140 differentcarsharing services were in operation at the start of 2016, a fleetthat had grown from about 1,000 vehicles in 2001 to morethan 15,400 – about 50 percent of the total European fleet –with most of the growth occurring since 2011. The trend curvehas gone past the early adopter stage and is rapidly headingtoward mainstream penetration.

Can both carsharing and ridesharing co-exist?

BCG posits that ridesharing and carsharing “compete for thesame set of users”, drawn to the ease and convenience ofsummoning a ride or car with a tap on a smartphone: “Both arewell-suited to spontaneous one-way trips of less than 15minutes. But in cities with serious parking constraints – whichis to say, nearly every large, dense city on Earth – ridesharingoffers tangible benefits.42

This is also reflected in interviews conducted by the strategicconsultancy Progenium in early 2016. Fleet managers andexperts interviewed suggested that at least in dense urban areas,not just carsharing, but also public transport is conceivablythreatened by Uber.

In Stockholm, city planner Johan Seuffert prefers fixed-parking space car club models rather than the free-floating,park anywhere variety: “we have good public transport and freefloating could actually take trips from walking, biking and



public transport”, he says. “We don’t want more car trips withinthe city, we want less. We have a toll around the city and mostof the DriveNow and car2go cars only go around within thetoll area, they never go outside... So that’s the contradiction toeasy access mobility – sometimes they could be good but it’snot good if they take away walking, biking and publictransport.”

City planners and new mobility futurists like me alreadyenvision the picture in which ridesharing and public transportwill merge into a web of on-demand transport solutions. TheFinnish capital Helsinki has plans to transform its existingpublic transport network into a comprehensive, point-to-point"mobility on demand" system by 2025 – one that, in theory,would be so good that nobody would need to own a car. It ledthe way with the Kutsuplus city bus, which did away with fixedbus stops or waiting in the rain; instead riders specified theirown desired pick-up points and destinations via smartphone.All requests are aggregated and the app calculates the optimalroute that most closely satisfies all of them. The Guardiansuggested that Kutsuplus “comes very close to delivering thebest of both worlds: the convenient point-to-point freedomthat a car affords, yet without the onerous environmental andfinancial costs of ownership (or even a Zipcar membership).”43

While Kutsuplus was suspended in early 2016, the similarly-conceived UberPool service is flourishing.

Pragmatically, as long as there are personally-owned vehiclesused for transport, there is significant space for both carsharingand ridesharing to grow. Even in Helsinki’s plans, carsharingand ridesharing constitute important elements of the puzzle.Senior Business Advisor at Helsinki Business Hub, NiinaKuusanniemi-Abbotts, blogs that the vision of “Mobility as aService” is to be able to “buy a mobility package via your smartphone, with a price package to suit your needs – for example,



€100 per month for free public transport in your home cityarea, 100 kilometers of free taxis and up to 500 kilometers ofrental car use. If you still want to own a car, then you could cutyour costs through sharing rides and renting it out to otherpeople when you don’t need it yourself.”

For businesses, there is the added incentive to become notjust a user, but a practitioner and leader in these new mobilitysolutions. As Kuusanniemi-Abbotts points out, “as many as20,000 new jobs could result from implementing Mobility as aService. Many of these jobs will be in the fields of mobile ICTand software, fields where Finland has deep expertise and …plentifully available talent. It’s an exciting time. The foundationsof the transport revolution are being laid here, in Helsinki.Even Silicon Valley is looking at the Helsinki model to see whatlessons they can learn.”

The lessons extend beyond mobility too. City planners arereimagining urban spaces; there will soon be no roadside parkingplaces in Helsinki. While in the short-term this favoursridesharing and “free floating” carsharing, it could also benefitthe reception of autonomous car rides. Autonomous cars couldeffectively float around the city, ready to be hailed via apps, ascitizens jump in and out. When that happens, the squabble asto which business model will survive out of carsharing andridesharing will become a moot point. When the driver is nolonger a human, all these models essentially converge into one.Self-driving cars will account for the vast majority of transportby 2030 – and not just in Helsinki. Other cities are beginningto follow suit.

Sharing enters the commercial world

Frost & Sullivan have predicted the “new wave” of corporate



carsharing across Europe is well on the way to becoming “atsunami”. It believes there could be a shared fleet of close to100,000 by 2018 – based primarily on the replacement of pool-cars through corporate carsharing. A London-based white paper,commissioned by Zipcar, has also predicted that the 140,000Londoners using car share schemes (both for business andprivate use) in 2015 will balloon to 800,000 by 2020.44 In itsregular barometer, the Corporate Vehicle Observatory foundthat the number of companies interviewed who hadimplemented carsharing as part of their fleet solutions rosefrom 15 percent in 2012 to 22 percent in 2015.45

There are also opportunities for employee reward andengagement. The online, app-based nature of car andridesharing are both in tune with the employee demands for aconsumer-grade experience. Saurav Chopra, chief executiveofficer at Perkbox, told Employee Benefits magazine: “Mobileapps and mobile web are having a dramatic impact on the take-up of employee benefit services,” due to the retail discounts,timely offers and savings and location functionality availablethrough apps. “From a user-experience standpoint, mobile appsoffer a lot of advantages and capabilities that help take employeebenefits to the next level,” said Chopra. “Apps are also a greatdriver of engagement because they are sitting on [a] handsetwith anytime, anywhere access.”46


“Fleet managers arebecoming mobilitymanagers, logisticsexperts and datagurus.”


This all means that fleet managers are increasingly becomingtravel and mobility managers. For commercial fleets, they arebecoming logistics experts, and data gurus.

According to the Committee for Review of InnovativeUrban Mobility Services, real-time dynamic data make itpossible for fleet managers to optimize the number of vehiclesneeded, while their drivers benefit from data that can reducetheir wait times and offer alternatives: apps with “highly accurateGPS data, online and application-based payment systems,remote locking and unlocking capabilities, and the ability tomanage extremely large and dynamic data sets are enablingreal-time rideshare matching, convenient shared-use andownership opportunities, and bundling of multimodal traveloptions into packages,” that include sharing loads andreallocating journeys.47

Traffic and parking shortages – previously a daily headachefor drivers – are already being circumnavigated, and that's justa start.

Notes

31. http://www.worldometers.info/world-population/nigeria-population/32. https://www.pwc.com/m1/en/services/consulting/documents/millennials-

at-work.pdf33. https://www.google.co.uk/green/efficiency/oncampus/34. BCG (2016), What’s Ahead for Carsharing? The New Mobility and Its

Impact on Vehicle Sales, February35. Davidson (2015), The end of the road: Has the developed world reached

‘peak car’?, Schroders: Talking Point36. Corwin et al (2015), The future of mobility: How transportation

technology and social trends are creating a new business ecosystem,Deloitte LLP

37. http://www.nytimes.com/2015/04/11/upshot/new-york-taxi-mogul-



seeking-a-bailout-says-hes-too-big-to-fail.html?_r=138. http://www.wired.co.uk/magazine/archive/2015/05/features/blablacar/

viewall39. Committee for Review of Innovative Urban Mobility Services (2015),

‘Between Public and Private Mobility Examining the Rise of Technology-Enabled Transportation Services’, Transportation Research Board

40. Foroohar, R (2015), Time Person of-the- Year-2015, runner-up TravisKalanick,

41. http://uk.businessinsider.com/ubers-plans-to-be-cheaper-than-owning-a-car-2015-2?r=US&IR=T

42. BCG (2016), What’s Ahead for Carsharing? The New Mobility and ItsImpact on Vehicle Sales, February

43. http://www.theguardian.com/cities/2014/jul/10/helsinki-shared-public-transport-plan-car-ownership-pointless

44. http://www.fleetnews.co.uk/fleet-management/rental/rental-carsharing-wave-set-to-become-tsunami

45. http://www.corporate-vehicle-observatory.com/node/1446. https://www.employeebenefits.co.uk/are-apps-increasing-the-take-up-of-

voluntary-benefits/47. Committee for Review of Innovative Urban Mobility Services (2015),

‘Between Public and Private Mobility Examining the Rise of Technology-Enabled Transportation Services’, Transportation Research Board



Chapter???? 33

Chapter 3:The AutonomousVehicle Revolution


“Any activity thatrequires manualprecision and isrepetitive andmonotonous (likedriving) can better bedone by robots.”


Over the years, we’ve gotten used to incrementalimprovements to our cars that have made us safer.Volvo introduced the first three-point seatbelt in

1959. The padded dashboard to reduce face and chest injuriesin crashes was added just a year later. The first airbag wasoffered by Mercedes in 1981; in spite of the very obvious safetybenefits, it took 17 years before dual front airbags becamemandatory on all new vehicles, at least in the United States.

In 2005 the first lane departure system in Europe startedbeeping at Citroën C4, C5 and C6 drivers, alerting them ifthey stray out of their lane. In 2008 the Volvo S80 came withblind spot monitoring. The same year, Volvo also became thefirst to introduce semi-autonomous braking in the XC60, usingsensors mounted behind the rear-view mirror to foresee a crashand apply the brakes automatically.

Unlike the seatbelt’s and the airbag’s slow path to ubiquity,Autonomous Emergency Braking (AEB) will have becomestandard equipment in under ten years. Most automakers haveso far voluntarily committed to make AEB standard by 2022but Toyota became the first to commit to equipping virtually

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all its models with AEB already in 2017, putting pressure on allother brands to do the same.

Traffic Jam Assist was added by Audi, BMW, Daimler andVolvo in 2015, allowing the car itself to take control of steeringand speed in heavy traffic at speeds up to 60 kilometers perhour (ca. 40 miles per hour). This technology is a combinationof the adaptive cruise control and lane departure monitoringsystems introduced in 2012.

Add all of these existing, on the road technologies together,and you get something very close to a fully autonomous drivingmachine. In 2014, the European car magazine Auto Bild drovea Mercedes C220 on autopilot for 965 kilometers (600 miles),only twice manually applying the brakes and barely touchingthe steering wheel.48 Upon arrival at the destination, activeparking assist was activated to find a suitable parking spot,which the car then parked in autonomously.

Full, driverless autonomy is the next logical step, and theglobal race to get there first is well underway. On Feb 16, 2016,Audi transported German actor Daniel Brühl to the red carpetof the Berlin Film Festival in a driverless A8 L. Far from a 10meter publicity stunt, the Audi picked up Brühl and modelFelicitas Rombold from their hotel in Berlin and took them tothe Berlinale Palast, one of the festival’s venues. An Audi pressrelease informed the car navigated using “prominentarchitectural features” as well as its internal mapping capabilitiesand real-time data during the journey.49

At London’s Heathrow airport, a ‘pod parking’ area offerstransfers between the business car park and Terminal 5 providedby driverless electric cars moving on a dedicated, elevatedroadway. Using a touchscreen kiosk, travellers summon a ‘pod’and specify the destination. A pod, which can seat up to fourpeople, then pulls up, parks itself and opens its doors. The onlycontrol the passenger needs to press is the start button.

Chapter 3: The Autonomous Vehicle Revolution 37


By July 2016, modified versions of these same pods hit thepavements of Greenwich Peninsula, by the O2 Arena in London,carrying up to six passengers. Unlike at Heathrow, these are notrestricted to a dedicated track, but rather share space with othertarmac users, with a choice of destinations including residentialareas, the North Greenwich Tube station, the O2 Arena andlocal businesses. The pods were developed as part of the £8mGateway project led by the UK’s Transport Research Laboratory,one of four autonomous car trials in the UK alongside Bristol,Coventry and Milton Keynes.50

In an effort to maintain its lead as a centre for Europeanautonomous vehicle testing, the UK has declared a 41-milestretch of public road between Coventry and Solihull a “livinglaboratory” for a consortium of companies, research andgovernment bodies, to test connectivity and autonomy in cars.Jaguar Land Rover, Vodafone, Siemens and Huawei are amongthe participating companies. New equipment will be installedalong the route to enable up to 100 cars to transmit data athigh speeds with each other and the motorway’s infrastructure.

Autonomous vehicle trials are underway all over the world.VisLab, a spin-off of the University of Parma, Italy, has beeninvolved in automated vehicles research for more than 15 years.Instead of using the now conventional ‘Lidar’ laser sensors, anapproach based on computer vision has successfully navigatedParma’s famously chaotic city traffic, and even completed the13,000 kilometer journey from Italy to China.51

The EU’s CityMobil2 project is setting up a pilot platformfor automated road transport systems across a number of memberstates. The Department of Transportation in the US hasannounced an ambitious goal to “position industry and publicagencies for the wide-scale deployment of partially automatedvehicle systems that improve safety, mobility and reduceenvironmental impacts by the end of the decade.” A RobotTaxi



project in Japan is aiming to have an autonomous taxi serviceavailable in time for the 2020 Tokyo Olympics.52 In China, aprototype autonomous bus built by the Yutong Bus Companycompleted a 32 kilometer trip in regular traffic betweenZhengzhou and Kaifeng in September 2015. Equipped withLidar it reached a top speed of 68 kilometers per hour, passed 26traffic lights and was able to change lanes and overtake.53

Clearly, the driverless vehicle has arrived. Half of cityauthorities interviewed by the World Economic Forum expectcommercially available, full automation on public roads by 2020.54

While most major OEMs now have an autonomous vehiclein development (as we will see in Chapter Five), the mostfamous project of all comes not from a car manufacturer at all,but from Google. In March 2015, Chris Urmson, head ofGoogle’s driverless car programme, gave a TED talk in whichhe described its progress to date: “For the last 150 years we’vebeen working around that least reliable part of the car: thedriver. We’ve made the car stronger, we’ve added seat belts,we’ve added airbags, and over the last decade we’ve actuallystarted to make the car smarter, to fix that bug: the driver.”55

Urmson described the existing automotive industry’sapproach of adding additional sensors as merely “patchingaround the problem”. Self-driving systems are fundamentallydifferent to driver assistance systems, he says, equating the latterto saying “if I jump really hard, one day I’ll learn to fly”.

In addition to around two million miles of real road testsclocked up by mid-2016, Google undertakes three million milesof testing in simulators every single day.56 Starting in 2012 witha fleet of Lexus vehicles equipped with sensors and software, asof May 2015 Google began testing its own purpose-builtprototypes, without steering wheels and pedals. By February2016, 33 prototypes were self-driving on public streets inMountain View, California, and Austin, Texas.



While Google's two-million miles of on-road autonomoustesting experience are well publicized, Tesla’s use of self-learning,artificial intelligence in the development of autonomoustechnology is less so. While the Tesla Model S autopilot featuresstill – officially, at least – require hands on the steering wheel,the automaker is using those human interventions as “teachablemoments” to make the software better. “When one car learnssomething, all learn,” Tesla CEO Elon Musk has said. Accordingto Quartz magazine, Model S owners have been “observingimprovements and have been marveling at the system’s self-improving capabilities on a Tesla Motors Club forum…. Onedriver wrote: So far I have a little over 300 miles on autopilot,mostly 20 miles at a time on my commute to and from work.The first day when I was in the right lane, as I approached exitramps, it would dive for the exit ramp. I quickly learned toapply torque to the wheel to hold the car on the interstate untilI had passed the exit. Each day the system seems to have lesstendency to follow the exit ramps as I pass. The last two days itonly gave a momentary wiggle and moved over maybe six inchestowards the exit ramp then it recovered and moved on downthe road. This morning it gave only a very slight hesitation, solittle that I did not have to correct it at all. I find it remarkablethat it is improving this rapidly...”57


“Artificialintelligence inautomotive: “Whenone car learnssomething, alllearn.”


Each of the tens of millions of miles driven by Tesla ownersis effectively on-road testing and improving its autonomoustechnology. As a result, Tesla boss Elon Musk predicts that itwill have a fully self-driving car by 2018. In November 2015,he announced on Twitter that “We are looking for hardcoresoftware engineers. No prior experience with cars required.” Hetweeted as a follow-up the next day: “I should mention that Iwill be interviewing people personally and Autopilot reportsdirectly to me. This is super high priority.”58

Reflecting the same urgency, Google’s Urmson stated that amass market version of the Google Car would arrive between2017 to 2020.59 To enable production, in September 2015,Google drafted in John Krafcik as ‘CEO, Self-Driving Cars’.An auto industry veteran of Hyundai and Ford, this led newssources to speculate that the company was moving quickly tocommercialize the Google Car.60

The benefits of going driverless

You can see why I gave my first book the subtitle: ‘ZeroEmissions, Zero Accidents, Zero Ownership’. Most certainly,robots are better drivers.

Shared, autonomous vehicles (AV) eradicate the problemsand meet the lifestyle wants and needs identified in ChaptersOne and Two. McKinsey also summarizes some additionalbenefits:

“Drivers have more time for everything.AVs could free as much as 50 minutes a day for users, whowill be able to spend traveling time working, relaxing, oraccessing entertainment. The time saved by commutersevery day might add up globally to a mind-blowing one



billion hours—equivalent to twice the time it took to buildthe Great Pyramid of Giza.

Parking becomes easier.AVs could change the mobility behaviour of consumers,potentially reducing the need for parking space in theUnited States by more than 5.7 billion square meters.

Accident rates drop.The overall annual cost of roadway crashes to the USeconomy was $212 billion in 2012. Taking that year asan example… AVs reducing accidents by up to 90 percentwould have potentially saved about $190 billion.” 61

The top causes of fatal accidents on US roads are alcohol (31percent), speeding (30 percent), distracted drivers – includingtexting (21 percent), drugs (7 percent) and fatigue (2.5 percent)– all of which come down to human error (the remaining 3.5percent, by the way, are caused by ice, rain and debris). Robotswill never drink or take drugs, get tired, drag race or getdistracted by Facebook. And those figures are just for the mostsevere of accidents, the ones resulting in deaths. Consider theimmeasurable bumps, scrapes and injuries also caused byirresponsible, all-too-human drivers.

A study by the Eno Centre for Transportation, the not-for-profit organisations, estimates that if 90 percent of cars onAmerican roads were autonomous, the number of accidentswould fall from 5.5 million a year to 1.3 million, and roaddeaths from 32,400 to 11,300. Given the known causes ofaccidents I listed above, I would suggest the reduction to bemuch greater.

Autonomous pilots have been shown to be safer in miningoperations, in airplanes, in cities and on highways. We have



learning robots that are already better at certain surgicalprocedures, being used to transform banking (FinTech), provide24/7 security and surveillance (Knightscope), and executemilitary operations. In short, we should get used to the notionthat any activity that requires some manual precision, but isalso repetitive and monotonous, can be better done by robots.

The 2015 Deloitte paper ‘The future of mobility’ suggeststhat the question for autonomous-drive technology is no longerif it will happen, but “when and how will it become moremainstream and widely adopted? … Vehicles outfitted withelectronic control modules and sensors that enable vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I)communications can proactively suggest re-routings to avoidroad hazards and call for assistance in the event of an accident.Soon, cars will routinely gain precise-enough awareness of wherethey are in relation to other vehicles and potential hazards totake pre-emptive action to avoid accidents… All told, a systemthat has been well established for a century is on the verge of amajor transformation that could result in the emergence of anew ecosystem of personal mobility.”62

Autonomous means electric: the simultaneous rise of EV

The transition toward AV runs hand-in-hand with widescaleadoption of electric vehicles (EV). Some 130 years since itsinvention in 1886, the internal-combustion engine has reachedsomewhat of a limit on how much it can still be optimised.While engineers are still able to increase efficiency by 1-2 percentper year, this pales in comparison to the 15-30 percentimprovements per year we are seeing in the efficiency, cost, andrange of electric vehicles with lithium-ion batteries. The



Bloomberg New Energy Finance (BNEF) Head of AdvancedTransport, Colin McKerracher, told Scientific American inOctober 2015: “EV lithium-ion battery costs are down morethan 60 percent since 2010 and we expect this to continue.This will be very disruptive and will happen sooner than manyexpect.” They conservatively predict the total cost of ownership– combining purchase price and running costs – of battery-only cars will dip below those with internal combustion enginesin 2022, “even if conventional cars improve their fuel efficiencyby 3.5 percent a year”.63

For business fleets, however, this is still a rather pessimisticview. This TCO calculation doesn’t consider three moreimportant factors where electric vehicles shine:

1. Maintenance: electric vehicles generally have lowermaintenance requirements, less brake wear (due tobrake energy recuperation), no fluid consumables toworry about and further maintenance intervals. Thisalso results in less downtime (a crucial considerationat least for commercial fleets).

2. Avoidance of taxation and congestion charging: incities like London and Milan, congestion chargingand emissions-based taxation plays an importantrole in the overall TCO calculation; electric vehiclesare generally able to avoid this taxation.

3. Driver behaviour: as one commercial fleet managertold me, “drivers in electric vans are simply happier.This also means I see less damage to the vehiclebecause when a driver is unhappy with a vehicle,he’ll drive it like it’s stolen. I don’t see that with theelectric vehicles.”64



In addition to the battery technology improvements that aredriving real economic benefits for electric vehicles, the politicaland social trends are also aligning for electrification.McKerracher adds, “we see policies – like fuel economystandards in the US – that are set to get much more stringentand push automakers towards hybridization or fullelectrification. Our analysis indicates that it will be very difficultto meet these existing standards without much moreelectrification… the future is largely electric.”65

Companies that plan their fleet strategy more than five yearsin advance should also take note: Norway has a 100 percent zeroemissions target for cars by 2025, and for trucks by 2030. Austriaand the Netherlands are considering an outright ban on the saleof diesel and petrol vehicles, and cities like Paris and Stuttgartregularly have entry-restrictions on internal-combustion-enginecars, when smog hits a certain level. Cities are making clean-aira key agenda item in their quest for quality of life. Oslo’simpending ban on automobiles is part of a wider plan to slashemissions of greenhouse gases by 50 percent by 2020 comparedto 1990 levels. The new city authority also plans to divest fossilfuels from their pension funds, build more bicycle lanes, subsidisethe purchase of electric bicycles and reduce automobile trafficover the city as a whole by 20 percent by 2019 and 30 percentby 2030. “In 2030, there will still be people driving cars butthey must be zero-emissions,” Lan Marie Nguyen Berg, amember of the Oslo city government, has said.66

EV-sceptics point to ‘range anxiety’ and the increased nationalinfrastructure demands of producing more electricity – but thesearguments are beginning to fade. Tesla’s Model S has a range nowcomparable with a tank of petrol; its mass-market Model 3 willcome to market in 2017 with a range of over 350 kilometers(220 miles). The new generation Nissan Leaf was launched inEurope in February 2016 with a 30 kWh battery and an improved



driving range of 250 kilometers (155 miles), up 26 percent fromthe previous model. VW has promised a new e-Golf with a rangeof 300 kilometers (190 miles).67,68 Rapid charging units (43-50kW) are now available that can provide an 80 percent chargein around 30 minutes. And unlike petrol pumps, we all haveplug sockets at home, offering a slow, off-peak, overnight chargingalternative. Last but not least, the pricing and technology ofcharging is becoming standardised and more predictable. Thethree largest EV charging networks in the UK, Chargemaster,Ecotricity and Podpoint, are moving towards charging modelswith pricing dependent on the speed of charge.69

As of January 2016 there were approximately 48,000registered EVs in the UK. The National Grid estimates thatthere could be over one million EVs on the road by 2022.70

Globally, sales of EVs exceeded one million for the first time inSeptember 2015, consisting of 62 percent battery electric and38 percent plug-in hybrids.71

The more progressive carmakers have already committed toelectrifying their whole range. Audi and BMW plan for theirentire ranges to be released with an electric plug-in option.Volvo is also aiming to go all-electric, aiming to sell over onemillion EVs per year by 2025 – doubling the number of total,internal-combustion engine vehicles it currently sells.

Tesla’s fully-electric Model S has already displaced Mercedesto become America’s best-selling premium vehicle – it surpassedBMW and Audi years ago.73 The electric vehicle program atRenault, an early pioneer in mass-market electric vehicles, hasinvested more than €1 billion from 2010-2015. Sales haveposted strong growth rates since mid-2014, up 72 percent inJan-May 2015 vs 2014, “making the brand the European leaderof this segment. Continuing this trend the Group’s EV salesmay reach 100,000 per year in the mid-term, representingaround €2 billion in annual turnover for the Renault Group.



Furthermore, in EU or China, EVs will help Renault meet thevery stringent CAFE/CAFC [fuel consumption] limits in thefuture, and avoid heavy financial penalties applicable to everyvehicle sold on the market, which may represent a billion-euroadditional stake yearly by 2021 and beyond.”74 The competitionto create the next Tesla is even more fierce in China, where thegovernment hopes new-energy vehicles will top 3 million peryear by 2020. BYD, NextEV, BAIC and LeECO are brandsthat we will see more of in the next years.

Not only is there an alignment of autonomous and electricvehicles, but carsharing is also beginning to support sales ofelectric vehicles. The London Car Club Coalition’s report in2015 identified that EVs in carsharing fleets could “helpnormalise EV to a much wider audience, as demonstrated invarious European cities through DriveNow, Autolib’s, andcar2go’s electric vehicles operations.”75 In Progenium’s pan-European fleet-manager research in 2016, organisations thathave implemented corporate carsharing also disproportionatelyopt for electric vehicles, especially since carsharing trip-lengthsare ideally suited for the range of electric vehicles availabletoday.

Lauren Hepler, Senior Editor at GreenBiz Group, writesthat EVs and carsharing are close travel companions: “Whileboth short-range EVs and carsharing networks have struggledin past hype cycles to achieve scale, the buy-in from incumbentauto industry heavyweights – coupled with a new wave of techinnovation in the form of on-demand software platforms –could change that… range anxiety is still very much a factor forround-trip carsharing customers, but expanding charginginfrastructure, better battery storage technology and lower up-front costs are helping to increase the number of providersinvesting in EVs.”76



Early adopters and the corporate world

So who exactly will adopt these electric, autonomous cars?Tellingly, Chinese internet search giant Baidu has joined therace to develop autonomous cars, with testing already ongoing,and plans to hit Chinese roads by 2018.77 There are hugerewards for the car maker that gets there first in China. TheWorld Health Organization estimated that 261,000 people diedon China’s roads in 2013 – that’s not including ongoing smogproblems that the Chinese Government has officially declared“war” on.78 But perhaps most interesting is the keenness of theconsumers themselves. A study in November 2015 by consultingfirm Roland Berger found that more than half of respondentsin China would rather use a robot taxi than buy a new car,compared to over a quarter of Germans and Americans.

The adoption of autonomous vehicles could be fastelsewhere globally too. As the Economist writes, “self-drivingvehicles that can be summoned and dismissed at will could domore than make driving easier: they promise to overturn manyindustries and redefine urban life. The spread of driver-assistancetechnology will be gradual over the next few years, but then theemergence of fully autonomous vehicles could suddenly makeexisting cars look as outmoded as steam engines and landlinetelephones.”79

The semi-autonomous models currently available are atransitional step toward full-autonomy. The social speed ofadoption is high; there is already anecdotal evidence of driversthat use driver-assistance technology failing to pay attentiondue to an over-reliance on the technology. While drivers arestill required by law to be in control, we have becomeaccustomed to relying on technology in many parts of our lives– the freedom to text, read, and surf the internet withoutrepercussion while driving is enticing. The San Jose Mercury



News reported in October 2015 of a Tesla Model S drivingbeing pulled over by Florida Highway Patrol for speeding.While using the new autopilot feature the driver didn’t notice asign warning that the freeway speed limit had dropped by 10miles per hour. “The technology is ready,” the driver told thepaper, “[But] I’m not sure the people are ready. You still need topay attention.”80

The Financial Times columnist John Gapper notes,“Networks of self-driving cars, some of them hired on demandlike taxis rather than owned by individuals, could serve societywell. They would also undermine the [automotive] sector’s salespitch.”81

Tesla’s Elon Musk puts it more bluntly: “People may outlawdriving cars because it’s too dangerous. You can’t have a persondriving a two-ton death machine.” While Musk was pushed toweaken his statement in subsequent interviews, the messagewas clearly heard. Nor is he alone in his view. Through mylong-range work with certain governing authorities, I am quitecertain cities will ban ordinary cars out of both safety andcongestion considerations. A report on self-driving cars fromMorgan Stanley predicts that attitudes will quickly shift from ‘Idon’t want to share the road with robots’ to ‘I don’t want toshare the road with other human drivers’.”82

When the World Economic Forum (WEF) published resultsof its first global survey of consumers’ attitudes towards self-driving cars in 2015, Alex Mitchell, Director at WEF expressedsurprise that: “consumers are vastly better informed about thetopic than conventional wisdom suggests. Several executives atcar companies I talked to said that ‘consumers don’t evenunderstand what self-driving means’. Our research suggestsotherwise. In our focus groups, average consumers givenminimal, neutral prompting, were able to articulate use casesand implied benefits, both social and individual, with ease.



They included doing business while on the road, or spendingquality time with their children… the data in this researchsuggest that consumers are more amenable to the self-drivingvehicle age than we might otherwise think.”83

This is particularly relevant in the corporate context.Gifting people time in our day that would otherwise be wastedis an extremely attractive prospect. The average commute towork takes 54 minutes in the UK (74 if you’re in London), 70minutes in Portugal, and 23 minutes in Italy (based on 2014figures). The world’s worst average commute is in Bangkok,Thailand, where people typically clock up close to 2 hours.84

A study by the University of Texas estimates that a 90 percentpenetration of self-driving cars in America would be equivalentto doubling road capacity and would cut delays by 60 percenton motorways and 15 percent on suburban roads. MorganStanley calculates that the productivity gains would be worth$1.3 trillion a year in America and $5.6 trillion worldwide.

The adoption trends of mobile phones in the 1990s andsmartphones in the 2010s show that if technology taps intosuch a pent-up demand, take-up can spread incredibly rapidly.It is not only family life and personal mental health that areimpacted by long commutes and road accidents. Businessproductivity suffers too.

In the race to provide the most cost-effective, ubiquitoustravel options, taking out the highest cost factor, the driver,simply makes sense.

Martyn Briggs, Transportation Analyst at Frost & Sullivan,believes that the business case for autonomous vehicles is clear:“These vehicles are probably going to have an incremental costto them, at least the initial models, so there will need to be abusiness case to take them. That business case could be reducingthe cost of the driver. Certainly in taxis and the commercialfleets that can be 40 percent, 50 percent. Then obviously you



could pay that additional 20 percent, 30 percent for the vehicle.In that scenario, businesses will be responsible for the ‘pumppriming’ of the market and educating the customers or the restof the potential market.”

In other words: corporate uptake of autonomous vehicles islikely to lead the way, ahead of consumer adoption. One caneasily imagine driverless distribution fleets from the likes ofAmazon and UPS, and ridesharing companies like Uber, beingfirst to market.

Notes

48. Autobild.es (2014), ‘Reto: casi 1.000 kilometer en un Clase C sin tocarlos pedales’, 28 December

49. http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2016/02/Berlinale_2016.html

50. http://www.ibtimes.co.uk/london-first-autonomous-cars-heading-greenwich-this-summer-1540764

51. http://www.driverless-future.com/?page_id=15552. http://ajw.asahi.com/article/business/AJ20150529006953. http://www.driverless-future.com/?p=83054. http://www.weforum.org/agenda/2015/11/are-we-ready-for-self-driving-

cars55. Urmson (2015), How a driverless car sees the road, TED Talk, March56. Urmson (2015), How a driverless car sees the road, TED Talk, March57. http://qz.com/538436/tesla-model-s-autopilot/58. https://twitter.com/elonmusk/status/66751721539086336059. http://recode.net/2014/05/13/googles-self-driving-car-a-smooth-test-ride-

but-a-long-road-ahead/60. Barr and Ramsey (2015), “Google brings in chief for self-driving cars,”

Wall Street Journal, September 1361. http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/

ten-ways-autonomous-driving-could-redefine-the-automotive-world62. Corwin et al (2015), The future of mobility: How transportation

technology and social trends are creating a new business ecosystem,



Deloitte LLP63. http://www.theguardian.com/environment/2016/feb/25/electric-cars-

will-be-cheaper-than-conventional-vehicles-by-202264. Personal interview conducted by the author as part of a progenium study

of fleet managers.65. http://blogs.scientificamerican.com/plugged-in/transportation-cities-and-

air-quality-is-the-future-of-transport-all-electric/66. http://www.theguardian.com/environment/2015/oct/19/oslo-moves-to-

ban-cars-from-city-centre-within-four-years67. http://www.autoblog.com/2016/02/18/nissan-leaf-30-kwh-on-sale-in-

europe/68. http://autoweek.com/article/green-cars/vw-plans-mass-market-ev-battle-

chevy-volt-and-tesla-model-3#ixzz44TDIgyPv69. http://www.bre.co.uk/filelibrary/nsc/Documents percent20Library/NSC

percent20Publications/BRE_solar-carpark-guide.pdf70. http://www.bre.co.uk/filelibrary/nsc/Documents percent20Library/NSC

percent20Publications/BRE_solar-carpark-guide.pdf71. http://www.hybridcars.com/one-million-global-plug-in-sales-milestone-

reached/72. http://www.independent.co.uk/life-style/gadgets-and-tech/news/apple-

and-google-cause-confusion-at-frankfurt-motor-show-as-traditional-carmakers-race-to-turn-their-10506251.html

73. https://forums.teslamotors.com/forum/forums/tesla-market-share-increasing

74. Esgtrends.com75. London Car Club Coalition (2015), ‘A Car Club Strategy for London:

Growing car clubs to support London’s transport future’76. https://www.greenbiz.com/article/zipcar-google-and-why-carsharing-

wars-are-just-beginning77. http://www.wsj.com/articles/baidu-joins-race-to-build-autonomous-cars-

144971460178. http://blogs.wsj.com/chinarealtime/2015/12/02/china-road-rage-cases-

top-17-million-so-far-in-2015/79. http://worldif.economist.com/article/11/what-if-autonomous-vehicles-

rule-the-world-from-horseless-to-driverless80. O’Brien (2015), ‘Google, Tesla, others wait for DMV's self-driving rules’,

San Jose Mercury, 23 October81. http://www.ft.com/cms/s/2/c3fc2dd8-dfae-11e5-b072-



006d8d362ba3.html#axzz41r3fWTJP 82. http://worldif.economist.com/article/11/what-if-autonomous-vehicles-

rule-the-world-from-horseless-to-driverless83. http://www.weforum.org/agenda/2015/11/are-we-ready-for-self-driving-

cars84. http://www.express.co.uk/life-style/life/493116/Commuting-facts-from-around-the-world



Chapter 4:Business TravelTransformed


“Self-driving carscould conceivablyeven disrupt the airlineand hotel industrieswithin 20 years.”


Martyn Briggs and I share a passion for the newworld of corporate mobility. He was ahead of mostadvisors in his July 2014 blog post, ‘Future of

Mobility: New Corporate Mobility Business Models’. Hepredicted, “interest for solutions in the corporate space fromseveral industry participants, looking to capitalise on a trendtowards the use of innovative mobility products and services forwork related or corporate travel, to target efficiencyimprovements to the employers, and offer convenience andflexibility to employees.”85 His research over the following twoyears found that not only was this precisely the case, but thatthe trend was even more rapid than he had first thought.

Total cost of ownership (TCO) is shifting toward a totalcost of mobility (TCM). As Briggs told me recently, “Companiescannot just look at the car and its lifecycle, but rather all of thetravel that their employees are doing, whether it’s with acompany car or by a train or whatever mode it might be, andstart to understand that spend individually and then takesolutions that will reduce that cost, or use different suppliers fordifferent areas. Company cars were a very important part of thecorporate mobility market but the people that had access to

57


them were generally only a small proportion of the workforce,below 20 percent. Companies have got smart to that and they’resetting up dedicated business products, whether it’s Uber forBusiness, Zipcar for Business, DriveNow, car2go or evenJustPark discounts for business vendors... all of these companiesare targeting that B2B segment.”

Self-driving cars could conceivably even disrupt the airlineand hotel industries within 20 years as people sleep in their(moving) vehicles on the road rather than check into a hotel.Short-haul travel will be transformed and the hassle of gettingto and from airports eliminated. Sven Schuwirth, Audi VicePresident of brand strategy and digital business told the designmagazine Dezeen in November 2015, “We can disrupt theentire business of domestic flights… Your car wakes you up atfour o’clock in the morning, picks you up and drives youautonomously the entire way from Munich to Berlin. You cansleep, you can prepare for your meeting, you can call yourfriends and family, do whatever you want and you enter Berlinin a very relaxed mood.”86 Italian-American shared autonomousvehicle designer, NEXT Future Transportation Inc., has madethis prospect part of its pitch; its motto is “Life in Motion”(Disclaimer: I sit on NEXT’s Board).

Volvo is working with Ericsson to stream HD television inits future self-driving cars. The announcement made at CES2016 forms part of Concept 26, the automaker’s vision forautonomous vehicles. Volvo said new streaming systems forself-driving cars would allow occupants to sit back and “watchtheir favourite TV shows in high definition”. If a driver wantedto watch a 30-minute show but their autonomous commutetook 25 minutes, Volvo’s system could even alter the route toachieve the extra 5 minutes of viewing time. “If you want towatch the latest episode of your favourite series, the car willknow how long the journey needs to take and can optimise the



route and driving control accordingly,” said Anders Tylman,general manager of Volvo’s concept car business.87 A patentfiled by Ford in 2016 similarly detailed plans for a drop-downprojection screens that cover car windshields, transforming carsinto cinemas.88

The corporate reality is that “drivers” will use the time toedit that Excel file or PowerPoint presentation while riding,rather than watch Netflix. As Scott Le Vine describes, “there isan enormous amount of wasted potential during time spentcommuting in cars. It’s always been the views of many thatthere is a major motivation here to monetise that time orprovide a service during that half-hour or hour where theeconomy is effectively unmonetised. It’s currently dead timefrom an economic perspective.”

At the more life-critical end of the spectrum, in a fullyconnected, interoperable world, ambulances could redirecttraffic to arrive on the scene more quickly. Accenture Australiapredict that the mass adoption of autonomous vehicles couldhave a huge impact on first responders: “With access to driverlessvehicles, emergency services could collaborate with analyticsproviders to improve response times and elevate the level ofhealthcare provided to residents while potentially lowering costs.Furthermore, by understanding trends in data, autonomousambulances could be deployed to areas where there is a greaterchance of emergencies occurring. Self-driving ambulances wouldallow paramedics to focus on treating patients. Meanwhile, thevehicle, with the help of an intelligent road network, wouldgain priority and use just-in-time ‘dedicated’ lanes to reach thenearest hospital in the shortest possible time.”89

Google is also planning a fleet of autonomous deliverytrucks, a potential rival to Amazon’s ongoing delivery droneproject. The patent, awarded on 9 February 2016, describes an“autonomous delivery platform” for trucks fitted with a series

Chapter 4: Business Travel Transformed 59


of lockers and PIN codes sent to the customer waiting ondelivery. An order would be placed online, put into the truck ata local warehouse, which then drives autonomously to theowner’s home or office. The International Business Timesspeculates: “The controller could well be a human monitoringthe fleet of trucks from their local warehouse, while the otherentities the trucks communicate with could include smart trafficlights and street signs, other vehicles, or the customers'smartphones. Google could use the trucks for delivering itsown small range of smartphones and tablets, but more likely isa licensing system which would let small businesses use it fordelivering goods.”90 Once again: this redefines and reimaginesthe role of the fleet manager.

B2B Carsharing and ridesharing

A study in late 2015 filled in a knowledge gap of the B2B use ofcarsharing, compared to B2C. Drawing on a national survey ofboth Britain’s B2B carsharing members and employers’ corporatetravel administrators or fleet managers, roughly one in seven (15percent) of respondents indicated that a carsharing membershipthrough their employer had changed their travel habits byallowing them to commute to work less often by private car; 88percent of those previously using taxis switched to usually usingB2B carsharing, and the same percentage was found for peoplethat had been usually using car rental.91 According to theauthors, “there is evidence that the B2B market segment is nowgrowing faster than carsharing in general; in Britain, for instance,B2B membership increased by 29 percent in 2013, versus 13percent for the business-to-consumer (B2C) segment”.

Europcar, the European car hire giant, announced inJanuary 2015 it had purchased a majority stake in Ubeeqo, a



French start-up specialising in mobility for the business market.Ubeeqo’s offerings include ‘Bettercarsharing’, the ‘BettercarConnected’ fleet management solution using on-boardtelematics to analyse vehicle fleet usage, and ‘Mobilities Benefits’,targeted as an alternative to the company car: access to a fleet ofshared cars plus a mobility allowance to fund other personaltravel needs (train, Uber, car hire, bike hire, etc).

Ubeeqo solutions are offered to Europcar’s B2B clients, asegment representing 46 percent of the group’s sales. Its CEOPhilippe Germond stated at the time of the acquisition: “we aregoing to simplify our customers’ lives by providing them with anew concept that adapts seamlessly to their usage patterns andmobility challenges.” While that may be vague PR-speak,Ubeeqo’s founding partners Benoît Chatelier and AlexandreCrosby were much more blunt: “Our objective remainsunchanged: delivering a true alternative to the private car andsupporting our clients through the necessary transition fromownership to usage.”92

The Ubeeqo model has the advantage of being brandagnostic, meaning it can be used in any model of car. “Ubeeqo’sproposition is as a multi-make provider so they can fit their boxinto a Peugeot or a BMW or any model of vehicle and that’squite unique,” says Briggs. “Obviously Peugeot Share Your Fleetonly use Peugeots or Citroens, and AlphaCity just use BMWs,which restricts the customer choice… Most big organisationswill have multiple tenders and they will prefer, especially if it’s aperk car, to give the employees a choice of let’s say five or 10brands… I think at the moment those companies that have asingle OEM or a single product need to be mindful of thatbecause companies want more choice, more flexibility.”

If Ubeeqo only offers a box, not a car, however, fleet managersare getting less for their money. “It’s similar to the use of say Zipcaror others in terms of that you get keyless access and operation,”



explains Briggs, “so the first benefit is that you haven’t got toemploy your reception staff or dedicated fleet managers just to dishout keys and record who is using it. It’s all done electronically. Youhave the telematics box in the vehicle that records the mileage, thespeed, the trip distances and exact location… you get very accuratedata on the vehicles’ usage which is good for when you’re re-tendering the service, you can see how much they’re generally used.The other benefit of that is that you can enable personal use byemployees, and that’s a game changer. Many of the fleet managerstoday are just seen as cost centres – they’re costing the company Xamount per month or per year. If they’re starting to enable you or Ito rent a fleet car and pay the company back, then the companystarts to save money on their fleet.”

The fact that there are different policies for individuals andcorporates is mired in the nitty-gritty of taxation and compliancelaw, but these are short-term challenges.

In April 2015, Enterprise Rent-A-Car followed suit with itsacquisition of City Car Club, stating it expected the corporatefleet market to be the primary driver for carsharing growth.Enterprise provides its own corporate carsharing service,CarShare, as an alternative to traditional pool cars. However,the acquisition for an undisclosed sum of City Car Clubunderpin a stronger presence from Enterprise in the carsharingmarket. Its expansion into the carsharing sector follows that ofAvis Budget, which acquired Zipcar for £307 million in 2013.Enterprise vice-president Brian Swallow told Fleet News:“Carsharing is simply another form of rental. We offer it as partof a total mobility service to those businesses that prefer towork with one supplier, which can offer the full range ofmobility solutions.” City Car Club, headquartered in Leeds,informs that 2,000 businesses use its vehicles each month,making 5,500 reservations and travelling more than 140,000miles.93



Ridesharing is also proving attractive to corporates, withthe added advantages of not carrying the risk of ownership ordriver liability. Uber for Business is estimated to have over50,000 corporate clients, and Scott Le Vine believes its appealis obvious: “Businesses have to worry about liability in waysthat private drivers don’t. The ability to automate invoicing isalso a bit like outsourcing. If you are in the business of producingwidget X, do you really want to be interested in the business ofyour staff travel, or would you rather focus on your core businessand outsource to these sorts of business models.”

The Committee for Review of Innovative Urban MobilityServices reported in 2015 that Concur, the travel expensemanagement company, experienced a nine-fold increase in clientuse of Uber between 2013 and 2014. Another travel expensemanagement company, Certify, similarly reported that by thefirst quarter of 2016, use of Uber surpassed that of taxis (55percent versus 43 percent), in the US, for the first time. Lyftaccounted for only 1 percent of business trips in the secondquarter of 2015, but its market share grew by 153 percentbetween the first and second quarters of the year. Average fareswere cited as the reason for are gaining market share: “Certifyresults show average fares for Lyft to be $22.51, for Uber$30.03, and for taxis $34.48.”94

Ridesharing’s appeal to corporates, says Briggs, is “companieslike Uber for Business will walk into the room and say ‘Right,we can save you 50 percent on your taxi costs, just sign here’.”Briggs’s own employer, Frost & Sullivan, has done just that.“We’ve signed up to Uber for Business for our own travel – theygive you all the data on who is using it, where, and the kind ofsavings that you would make relative to taking a black cab… it’sthe same fleet, the same user experience, but when you use theapp you charge the trip to a business account rather than to yourpersonal account. So there’s two main values: one for the



customer is: it’s split billing, so you just charge it straight to yourbusiness and then it’s integrated to your expenses for those thatuse the Concur app like we do. For my employer the benefit isthat they’re getting data on every individual that uses the service,is it the cheapest option or is it the most expensive, what time ofthe day did you use it, is it compliant with the company’s policy?All the analytics and data are there to tell companies much morethan get with using ‘Martyn’s Cabs’ down the road.”

For multinational firms of all sizes, there is another distinctadvantage for executives who find themselves travelling todifferent countries from one day to the next. Uber has becomethe first global mobility brand. Whereas previously companiessigned up to local providers such as Addison Lee in London,Uber is the first to provide a globally consistent app, productand billing platform. Like many business travellers, I today nolonger find myself struggling to find the phone-number of alocal taxi-company and collecting receipts for journeys; when Itravel across multiple cities, I am able to use one app thatprovides me itemised billing across multiple road journeys.



The fleet management profession is watching all of thisvery closely. I spoke with another large British multinationalthat has taken it a step further. The global travel and fleetmanager told me “we’re not going to bother with carsharing, wegoing to go right over the Uber,” with the perspective ofincreasing Uber’s role as it expands. He felt that if Uber can getinto booking flights as well and unite all modes of transportationonto one platform, they would be looking forward to thesimplification – both from the perspective of the user, and thefinance department who manages employee travel claims.Ultimately, whoever can provide the best user experience acrossthe most modes of transport will win the battle for the corporatecustomer.

Other corporate-focused car-and ridesharing apps addressyet another issue: parking. Flinkster and SAP’s TwoGo eachmatch employees with similar commutes, in order to share aride to work. “You see in the UK and many European marketsone of the main challenges for getting people to work is thenumber of parking spaces,” says Briggs, “so companies will usethese platforms to reduce the number of parking they need andto give a core sustainability message that they are saving Xamount of emissions by ridesharing.” Crucially, the individualdriver – or employee in this case – is incentivised by beingcompensated for the journey, like a mini Uber driver for half anhour to and from work each day.

This follows a similar trajectory to other sections of theshared economy such as accommodation. Mike Atherton, CEOof Mantic Point, the travel app and software company, blogs:“Uber and AirBnB are investing heavily in building their owncorporate direct presence as well as using a partnering strategyto be able to distribute services into the established distributionchannels. The Uber for Business and AirBnB Business Travelservices offer travel managers visibility and insight into their



employee bookings via dashboards to track employee itinerariesand spending, plus centralised billing and financial reporting.”95

According to Fortune Magazine, the number of transactionscaptured by one company in its expense reporting tool increasedfivefold for Uber taxi services and by 27 for AirBnB rentals in asingle year.96

Employee perks: the death of the company car

Cars used to be synonymous with employment status. Cars forpersonal use, bought or leased by the employer, were offered toemployees as perks: the more senior the manager, the moreflashy their car. In an earlier time, directors would of course gettheir own named parking space.

There has, however, “been a relatively rapid death of thecompany car”, as Scott Le Vine puts it. “The provision ofcompany cars to senior management has come way, way downin the 2000s. Something else needs to replace it and I thinkthese [car and ridesharing] mobility services to some degree arein the right place at the right time with the right businessmodel.”

Part of this is attributable to a new generation of workers –millennials – joining (and now dominating) the workforce.Another element is the high level of taxation on company cars,which objectively quickly makes them unattractive for casualusers, especially those living in cities. Former Lex Autoleasecommercial vehicle director Marcus Puddy, now fleet consultant,sees carsharing as one of the alternative routes fleet managerswill look in 2016: “You get a vehicle for a number of hours.Park it up and then somebody else takes it for another couple ofhours… that’s going to become more and more popular.”97

Even John Pryor, chairman of the UK fleet industry body



ACFO, believes that, “Too frequently, many employers retainthe status quo and simply accept that employees have a companycar, will access a pool car or drive their own car and reclaimmileage. But is that the best travel solution, both for the businessand the individual? Frequently, the answer may well be no.”

Instead, Pryor suggests: “Employers and employees havenever had the business travel choice that is available today. Theinternet enables searches and price/time comparisons to beundertaken almost instantly. It means the travel options arealmost limitless: train, plane, car share, car club and daily rental,as well as bus, motorbike, taxi, cycle and walking, not tomention the company car, pool car or own car. Therefore, justas when compiling company car choice lists, fleet decisionmakers should focus on the total cost of ownership of the carduring the operating lifecycle. The factors that should be takeninto account in establishing a staff travel policy should include:the number of people travelling; length of journey, costs, forexample peak versus off-peak fares; hire car, car club or taxi; ifdriving, the cost of fuel and parking; time constraints; ease oftravel; the actual travel distance, in terms of the start to endlocation and return trip.”98

In May 2012, Zipcar UK began offering a salary sacrificearrangement for employers to offer to staff as an alternative to acompany car. The scheme allows employees to set aside aspecified amount of their pre-tax salary each month onreservations for blocks of driving time. Employers offering thescheme can benefit from a reduction in national insurance (NI)contributions and low-emissions cars can enter city lowemissions zones. Reservations can be made via the Zipcarsmartphone applications, online or even over the phone. MarkWalker, general manager at Zipcar, said in a press statement:“Zipcar’s salary sacrifice scheme marks a new era in employeebenefits; a tangible benefit that combines all the advantages of a



salary sacrifice car scheme with the economic and green benefitsof car club membership." He summarises the logic, “moredrivers are looking for low-cost, hassle-free alternatives toprivate-car ownership.”99

Johan Seuffert of the Stockholm City authority (the record-collector) manages a fleet of 400, including Volvo’s Sunfleetcarsharing, for city authority staff. “There is no reason for us toown the vehicle if we only can pay for it when we need,” heargues. “We have even found that car kilometers are goingdown as we use the carsharing scheme, because you need tobook it in advance. If I need to book something and I am onlygoing two kilometers, it’s easier to take the bike. But if you haveyour own car underneath your nose and it’s so easy to just takethe keys and go out to it, well then you’re going to do it.”Amongst the departments that have switched from a standinggrey fleet to a shared car club, driving has reduced by around 25percent, says Seuffert.

Arguably this transition could be perceived as a punitivemeasure. “Of course if you’re going to take away somethingfrom [employees] you need to give them something that theysee could fulfil their needs,” agrees Seuffert. This includesremoving the hassle of having to take care of keep cars clean.Finding a parking space, previously a major headache for citystaff, is also removed – Sunfleet have dedicated parking lots.But perhaps the biggest selling point for employees is that theycan also use the Sunfleet cars for personal use outside of worktime. They have to pay for it, but the ease of use and accessibilityis already established. “When I make the booking I select if it’sprivate or company. So that’s also a trigger to make theemployees use the vehicles even as a private person.” That, hesays, is “also showing a good example” and normalising car clubuse to Stockholm’s citizens.

Similar moves are happening within corporations. The



sustainable mobility programme of pharmaceuticals companyGrifols, Spain, includes an internal scheme for sharing privatecars, installation of bike racks in all Grifols sites and bus usepaid for by the company. Atkins, the global design consultancy,incentivises its employees to car share for business trips withan allowance of 5p per mile per additional person paid inaddition to the standard mileage allowance. Even Jaguar LandRover is following suit with a large carshare scheme, employeebuses and cycle to work programmes, managed via its internal‘i commute’ platform developed by the JLR intelligent mobilityteam.100

Philip Morris International, the New York headquarteredtobacco company, encouraged employees to use publictransportation in 2015 offering the annual fee for half-pricerailway subscription as well as a monthly public transportallowance paid to those employees who choose to use publictransportation rather than commute in their private cars towork.

Shared usage has four key benefits:

• companies don’t lose money through unnecessarymileage and stationary vehicle assets,

• companies offer millennials a benefit they appreciate, • fuel-costs and emissions are cut through efficient

usage, and • moving grey-fleet users on to sharing schemes meets

duty-of-care obligations.

There is significant scope – and low-hanging fruit – for thepublic sector to ditch its permanent fleet and adopt sharingmodels too. As with Seuffert in Stockholm, there is the addedpolitical incentive to influence citizen behaviour. In interviews



with numerous councils across the UK, I have found role-modelling to be a key factor: leading the way to more sustainabletransport by way of example.

Croydon Council in London has saved £500,000,eliminated grey-fleet usage and halved its miles driven byimplementing a package of mobility options including:

• Cycle2Work and Cycle Plus schemes. These allowemployees to purchase bicycles and equipment at areduced price through salary sacrifice. This issupported by 170 spaces for bikes, showers, lockersand changing facilities at the council’s newheadquarters.

• Corporate Oyster cards. Staff that need to travelshort distances are encouraged to use publictransport.

• A Liftshare scheme. Employees can share transportto and from work.

• Issuing all staff with a walking map of the borough,showing employees the quickest and safest routesbetween council buildings.

• The council has also introduced flexible workingand working from home.

• Its new headquarters has been built on a 3:2 ratio,which means two workspaces were allocated forevery three members of staff.101

When it was implemented, grey fleet drivers were offered use ofa pool car through Zipcar. The council also introduced a numberof initiatives to encourage staff to travel in a moreenvironmentally-friendly way, in line with its aim of reducingenergy use and emissions across council buildings and schoolsby 25 percent over a five-year period (2010-2015).



Mixed mode travel: mobility as a service

In 2015 (on Christmas Eve – presumably Santa’s first deliverythat year), Uber was granted a new patent for a travel logisticsweb portal, similar to Expedia. Quickly dubbed “Uber Travel”,the system would connect to networks of airlines to not onlyshow flight information and book flights, but also connect tohotels and AirBnB, and of course book all the Uber rides in-between. Fortune Magazine noted it “would be particularlybeneficial for business travelers.”102 No wonder: in the US alone,business travel expenditure amounts to over $310 billion in 2015,or 490.4 million trips, according to the GBTA BTI™ Outlook.103

The same month, Facebook teamed up with Uber to letAmericans summon cars from the ridesharing service usingFacebook’s Messenger smartphone application. The partnershipwas a major move for both firms, further expanding Facebook’sstand-alone messaging service beyond simply communicatingand putting Uber in a social network-backed application withsome 700 million users.104 “With this new feature, you canrequest a ride from a car service without ever needing todownload an extra app or leave a conversation,” bloggedFacebook product manager Seth Rosenberg. “With the abilityto request, track and pay for a ride in Messenger, we’re makingtransportation as simple as sending a message.”105

With a mind to full integration and seamlessness, it’s easy toenvisage a near future where if you want to get from your houseto a conference at Hotel Red on Main Street in Georgetown, asingle click on the event website will lead to a chain of automatedevents, perhaps managed by Uber. Your virtual concierge (fullylinked into your calendar) will summarise:

Since you are pressed for time on the day of departure andtraffic is projected to add 28 minutes to road travel until



10:45, an Uber vehicle will pick you up at your house at10:00 and bring you to the high-speed train to the airport,where you will get onto a British Airways flight. InGeorgetown, you will take autonomous shuttle 367 to yourhotel, which is booked according to your saved preferences.There is a local bikeshare service that you can use while youare there; you are preregistered via your Uber login. On theway back you will fly by American Airlines, chartered byUber (because we have aggregated enough volume to do so),and since your Calendar says you have enough time and youprefer a cheaper version, we have pre-booked an UBERpoolservice from the airport back to your home. We’veautomatically updated your Google Calendar with alltimings. All tickets are stored within the app and the totalcost will be taken as one payment off your corporate creditcard. It will appear on your statement as Uber transportB.V.

“The killer-app isthat which will allowstaff to put in astarting point, an end-point, that providesdoor-to-door multi-transport modesolution, using a singleform of payment.”



For travel management, the killer-app is that which will allowstaff to put in a starting point, an end-point, that providesdoor-to-door multi-transport mode solution, using a singleform of payment. Or a single swipe card that can be used fromcar to bus, to bike, to ferry, from city to city. From a corporatestandpoint, if the travel department has one provider,administrative hassles are reduced considerably. In the industryjargon this has become known as Mobility-as-a-Service (MaaS).And employers, fleet managers, travel companies, carmakers,public transport bodies, IT companies, financial servicescompanies, are all competing toward the same goal.

Some such ‘killer apps’ are already in place around Europe,making elements of this a reality:

The Scottish ‘Saltirecard’ A Scottish government ID card that be charged up foruse on several types of services, from library access topublic transport. Transport Scotland is working closelywith Scottish transport operators to deliver what it calls“customer focused, multi-modal, multi-operator smartticketing”. The Scottish Government’s vision, firstpublished in 2012, is that all journeys on Scotland’s bus,rail, ferry, subway and tram networks can be accessedusing the same form of smart ticketing or payment.Private bus operators including First, Stagecoach,Lothian Buses, McGills and National Express arecollaborating with rail providers to develop new smartand integrated ticketing offerings, initially in Scotland’smain city regions. As of February 2016, there were overtwo million saltirecards in circulation.106

Rome2rio.comThe website and app, based in Melbourne, is



attempting no less a feat than integrating the world’stransport provision. It offers a multi-modal, door-to-door travel search engine that returns itineraries for air,train, coach, ferry, mass transit and driving options toand from any international location. It is currently aninformation only service however – users wanting tomake bookings are given links to the relevant transportproviders. But as a vast, purpose built, worldwiderepository of air, rail, coach, ferry and mass transitroutes, at the very least it is proof of concept that sucha platform can exist.

Qixxit.comBuilt by the German rail service, Qixxit resemblesRome2Rio, however, you can use it to book tickets inGermany. It covers car rental, carsharing, bus, train andbike sharing, from a wide range of providers. Planningroutes from door-to-door, each phase of your journey isincluded in the calculations, with real-time informationon rail and road transport, including possible trafficdisruptions. The app can include friends from youraddress book, favourites, recent locations, bus stops,landmarks, carsharing vehicles or taxis near you. It willthen tell you the travel time, price, arrival time, transferpoints and paths on foot, and then book the tickets.

MoovelMoovel is Daimler’s integrated mobility platform,offering a joined-up service for travellers using its car2goand Ridescout businesses plus local taxi, Flinkster andpublic transport options. While it started in Germany,it is rapidly expanding across, following the acquisitionof various platforms. Moovel North America opened its



doors in April 2016. The Moovel app calculates theoptimum route for you, with journey times and costsfor your various travel options. When public transporttickets were added to the service in Stuttgart, November2015, Moovel claimed to be “the first providerworldwide of a true ‘one-stop-shop’ for urban mobility”.

CitymapperCurrently based in 27 cities around the world includingLondon, Manchester, Rome, Milan, Madrid, Paris andNew York, it describes itself as “Reinventing the transportapp, built for commuters and their daily needs” and a“single app for all the different use cases and challengesof city life” with live and real-time routing that updatesevery minute. It uses city municipal ‘Big Data’ and datafrom partners including Google, Apple andOpenStreetMaps, Foursquare and Yelp, Uber and Hailo,car2go and Autolib, and more, to provide a multi-modalview of the city and how to navigate it with simple ‘getme somewhere’ or ‘get me home’ options. Anannouncement in late spring 2016 brought this closer tothe “all in one” multimodal solution. For example, ajourney from the San Francisco Bay Area to Apple’s HQthat combines Uber and Caltrain was calculated to costonly $10 rather than $40 for taking a cab all the way.107

The NS-Business Card and the Radiuz TotalMobility passTwo separate Netherlands-based innovations aimedprimarily at business users, allow card holders to rent apublic bike, store it safely in allocated bicycle parks, takethe bus, tram or subway. The NS-Business Card alsolinks up with the carsharing scheme Greenwheels.



Radiuz Total Mobility can also be used to re-fuel orcharge up your car, with all travel expenses billedmonthly. The Radiuz website describes itself as a way forcompanies to reduce administrative processes, easilymanage VAT refunds, provide alternatives to a lease car,reduce parking pressure or parking spaces, provideflexible pay as you go solutions for part-timers, andintegrating reporting (including CO2 consumption) ontravel behaviour of employees.

XXIMOAvailable in Belgium and Germany, but again Dutch-originated, XXImo seeks to enable business travellers totravel hassle-free with a single solution for journeys bycar, taxi, train, tram, bus and plane and also to payconveniently for parking, hotels and even a businesslunch. All transactions with XXlmo are listed on a singleVAT summary statement and pre-authorised by theemployer. XXImo was created with “the vision tosupport multimodal traveling and at the same timeanticipate to the full digitalization of payments,invoicing and cost allocation”.

Last but certainly not least, the mothers of data processing,Google and Apple are most certainly evolving their respectivemap platforms to include all options, especially as theyrespectively prepare to launch their own cars or mobility options.

There are of course many more across the world, and oftencities are leading the way in integrating transport modes. HongKong’s travel pass, the Octopus card, is a rechargable andcontactless ‘smart card’ used on most forms of public transport,as well as settling payments at major convenience stores such as7-Eleven, even Starbucks – Octopus fares can be 5 percent to



10 percent cheaper than ordinary fares. In France, train operatorSNCF is trialling its IDPass focused on integrating multiplemodes of transport beyond simply rail (including parking,bicycle, lift and carsharing) into one digital service forcustomers.109 The Swiss train service (SBB) has also publicallystated that they see their role as a ‘public transport’ provider toencompass all modes of public transport (on the groundanyway), including two-wheeled, four-wheeled, shared and railtravel.

In Europe, I believe public-transport operators may havean edge here when it comes to the question ‘who will get therefirst’. They usually have a distributed smart-card system andapps already in place. With the platform there, they just needthe political will – and the business acumen – to join up withprivate operators. Similarly, any issued RFID card – be it anOyster Card, a Zipcar card or a Visa card could also beconfigured to swipe onto the local bus. We can expect ApplePayto be able to do this soon as well.

Martyn Briggs is a champion of the independents:“Citymapper and Moovit now have as much traffic and datagoing through their sites as Transport for London do”, he says.Commercial incentives and commission-based structures couldbe a complication that public providers such as TfL do notwant. He is keen to highlight the limitations of city-basedintegrators: “some will want to see evidence first before theyallow any partnerships to be made, some will just try it and seewhat happens… Italy have been very open to allowing thegrowth of the market and now they’re looking to tender someof the services in Milan I understand. So different cities havetheir own outlook which is interesting, but [it’s] a challenge tomake a global business.”

Not only is multi-city, cross-border and multimodalintegration key, but so is the provision of meta-apps – platforms



that give options across multiple providers. According toSeuffert, “This is one of the big issues… why should I needfive, ten different memberships, when I only want onemembership. I want one app to access all vehicles. It doesn'tmatter if it’s a BMW or a Volkswagen or whatever, I just wantthe vehicle or mobility. For sure we will see this happening andthe sooner the better.”

Speaking at the Nesta event ‘Mobility as a service: What isthe future of intelligent transport?’ in March 2015, BenPritchard, Technical Manager - Technology and Innovation atThales, informed: “linking some of these new concepts togetheraround provision of mobility as a service and transport togetherrequires a different way of thinking, particularly around modalinterchange. It is just another layer of IT for better customerinformation or new ticketing technologies. You need a betterend-to-end user experience designed every step of the way soyou can change mode quickly and seamlessly.”

The good news is: this is not a winner-takes-all market. Aslong as local governments allow access to data and payment ofgovernment transport services via a third-party, then there willbe plenty of room to redistribute cashflows to new providersand new brands. The bad news: anyone who doesn’t get intomultimode provision will be lost along the way and will becomea ‘provider’ with no brand or consumer relevance.

Of the aforementioned industry platforms in Europe,Moovel is – in my opinion – one to watch. Crucially, it doesnot restrict its users to using Daimler’s own carsharing schemecar2go, as you may expect being its parent firm. Even whilethey promote car2go heavily within the app, they haveunderstood the critical importance of independence from theirparent company. Since 2016, Moovel and car2go are respectivelyseparated from each other, and also sufficiently removed fromtheir parent in order to be able to grow independently –



collaborations with DriveNow and other competing platformsdon’t seem far-fetched. Uniquely, the team also includes aMoovel lab, an interdisciplinary research team studying‘movement patterns’ and traffic flows in urban areas “tounderstand human behaviour in urban areas, to influence itand to provoke discourse.”110

There is no technological hurdle to global roll-out of thesetechnologies. By the breakthrough year 2020, I believe socialnorms and legal frameworks will have caught up to what isalready being offered. Academic researchers looking into‘intermodal travel behaviour’ have suggested that a number ofthings need to be in place before urbanites will consider mixedtransport ahead of car use: “intermodal travelling should providea relative advantage of perceived benefits (e.g., vs. car travel),consistency with lifestyle, low barriers between different travelmodes, trialability before expensive purchase commitments, andvisibility in terms of benefits in switching among travel modes.The implication of the above is that available information is keythroughout the whole buying-decision process.”

Security concerns will be addressed, and in some cases,these apps will prove beneficial in doing so. Paul East, chiefoperating officer in the UK, Europe & America for businesstravel expert Wings Travel, told the Daily Telegraph: “Followingthe [November 2015] Paris attacks, traveller security is nowparticularly high on most businesses’ agendas… Safety andsecurity is paramount in this business, with companies legallybound to ensure a duty of care. New technology includes real-time traveller tracking and travel updates that keep both thetraveller and travel coordinator up to date on schedule changes– and a graphic showing where their travellers are in theworld.”111 Some sectors such as oil and gas already track theiremployees en route, using a combination of corporate-cardbilling records and smartphone GPS tracking.112



Most importantly for companies, this highly-attractive,seamlessly integrated multimodal transport proposition willactually save, not add cost. Full transparency of speed, cost andavailability of travel options will lead to conscious choices awayfrom taxis and private cars as the default option.

Notes

85. https://www.frost.com/sublib/display-market-insight.do?id=29132769386. http://www.dezeen.com/2015/11/25/self-driving-driverless-cars-disrupt-

airline-hotel-industries-sleeping-interview-audi-senior-strategist-sven-schuwirth/

87. http://www.wired.co.uk/news/archive/2016-01/04/volvo-autonomous-cars-ericsson-ces-2016

88. http://uk.pcmag.com/cars-products/75860/news/ford-patents-a-movie-screen-that-covers-cars-winds

89. Accenture (2014), Realising the benefits of autonomous vehicles inAustralia

90. http://www.ibtimes.co.uk/google-planning-build-autonomous-delivery-trucks-1542986

91. Clark et al (2015), ‘Business-to-business carsharing: evidence fromBritain of factors associated with employer-based carsharingmembership and its impact’, Springer Science+Business Media, April

92. Europcar News (2015), Europcar completes its strategic acquisition ofUbeeqo, January 19

93. http://www.fleetnews.co.uk/news/fleet-industry-news/2015/04/21/fleets-key-to-carsharing-growth-says-enterprise

94. Committee for Review of Innovative Urban Mobility Services (2015),‘Between Public and Private Mobility Examining the Rise ofTechnology-Enabled Transportation Services’, Transportation ResearchBoard

95. http://www.itm.org.uk/go/blog/Sharing_economy_MA.html96. Fortune Magazine, "Uber and Air billionb are complicating corporate

expense reports" (July 29, 2014)97. http://www.accountingweb.co.uk/article/company-car-faces-stormy-

road-ahead/595634



98. https://www.employeebenefits.co.uk/john-pryor-a-multi-diverse-mobility-plan-has-never-been-greater/

99. https://www.employeebenefits.co.uk/zipcar-launches-salary-sacrifice-scheme/

100. Esgtrends.com101. http://www.fleetnews.co.uk/fleet-management/fleets-in-focus-croydon-

council-and-zipcar/50124/page/3102. http://fortune.com/2015/12/30/uber-travel-patent/103. http://www.prnewswire.com/news-releases/us-business-travel-spending-

projected-to-top-310-billion-in-2015-300019555.html104. http://www.dailymail.co.uk/sciencetech/article-3422746/Facebook-

wants-help-organise-event-help-time-Patent-reveals-plans-carsharing-travel-tool-site.html#ixzz43qu9iHlF

105. http://newsroom.fb.com/news/2015/12/introducing-transportation-on-messenger/

106. http://www.transport.gov.scot/public-transport/smart-and-integrated-ticketing

107. http://techcrunch.com/2016/03/31/citymapper-launches-seamless-routing-between-cabs-and-public-transit/

108. http://www.radiuz.nl/veelgestelde-vragen/109. http://www.passengertransport.co.uk/2015/07/transport-wont-ever-be-

the-same-again/110. https://www.Moovel.com/en/GB/press/green-skin-pilot-project111. Upgrading the city: Enabling intermodal travel behaviour Scott G.

Dacko, Carolin Spalteholz 1 University of Warwick, Warwick BusinessSchool

112. http://www.telegraph.co.uk/sponsored/business/working-overseas/12127620/business-joins-the-smart-travel-revolution.html



Chapter 5:Impact on theautomotiveindustry


“An entiregeneration is growingup with an allegianceto smartphone apps,and no care for whoproduced the vehicle.Just as Airbus andBoeing are separatedfrom a consumer’spurchase process byairlines and travelplatforms, automakerswill be separated fromthe end-consumer byoperators and apps.”


Beyond the automobile industry, first-tier suppliers, city-planners, urban developers, financial services andinsurance companies, and even retailers are only now

beginning to take heed. Most every consultancy, automakerand first-tier supplier have since echoed our quote from TheMobility Revolution, published in 2015:

“We are on the cusp of a transformation very much akin tothe Industrial and Internet revolutions… Just as theInternet altered far more than merely how wecommunicate, the impacts of the Mobility Revolution willbe felt more widely than in solely the automobile industry.”

Still, it’s the automotive industry that is most immediatelyimpacted and has the most to lose. Since their status quobusiness model is predicated on producing and selling evermore cars, and hooking young people into driving and car-ownership, a disruption that breaks that chain becomes anexistential threat.

85


KPMG fired a warning shot across the industry’s bows backin 2014, stating in an industry report: “For almost 100 years,the OEMs have been kings of the huge, mature $4 trillionautomotive industry. They exerted near-complete control overthe design and content of the car. Their choices defined theroles their suppliers would take and, to a great extent, exactlywhat their suppliers would design. Product specs were createdby OEMs and passed down through the ranks of suppliers.Parts were designed and built according to specifications andpassed back up the chain of tiered suppliers, eventually reachingthe OEMs, who assembled the parts into cars. The paradigmdoesn’t work anymore. The hierarchies are unstable; new playersare rising up…”113

As noted in Chapter One, Boston Consulting Group wasblunt: “carsharing will reduce worldwide vehicle sales byapproximately 550,000 units by 2021 and cause a net revenueloss to OEMs of €7.4 billion.”114 An estimated 35 million userswill instead book 1.5 billion “minutes of driving time” eachmonth – a figure that doesn’t yet even include ridesharing andautonomous technology. (Note that this is a net-loss of vehiclessold, after considering vehicles integrated into carsharing fleets.)

Car manufacturers rightfully fear that “OEM” will cometo mean exactly what it says – original equipment manufacturer– effectively becoming white-label assemblers for a newgeneration of mobility brands with no access to the endconsumer. An entire generation is growing up with an allegianceto smartphone apps, and no care for who produced the vehicle.Just as Airbus and Boeing are separated from a consumer’spurchase process by airlines and travel platforms, automakerswill be separated from the end-consumer by operators andapps. GM and Peugeot may still be able to differentiate themetal slightly, but consumers make their choice of travel via anapp.



Market disrupters: Silicon Valley Unicorns

In 2015, Daimler’s CEO Dieter Zetsche defiantly told reportersat the Frankfurt Motor Show, “We do not plan to become theFoxconn of Apple.” Still, Daimler can’t resist the temptation oflarge volumes. Only six months later, the whole auto industrybuzzed with the news: Uber had reportedly placed an order of100,000 fully autonomous Mercedes-Benz S-Class sedans for2020 (or as soon as full-autonomy becomes available). WhileUber refused to confirm or even comment, it was seeminglyhappy with the speculation. As we heard in Chapter Three, itsoutspoken CEO has made no bones of being a fan of anautonomous future and wanting to compete with privateownership.

Similarly, but presumably with a more immediate deliverytimeframe, Hyundai was also reported to have had conversationswith Uber. Dave Zuchowski, CEO of Hyundai Motor America,told Automotive News that its meetings with the ridesharingcompany were “more than casual talk”. Hyundai Vice ChairmanChung Eui-sun even paid a personal visit to Uber’s headquartersin San Francisco. Zuchowski informed reporters that Uberrequested an electric vehicle custom-built for ridesharing andexpressed interest in Hyundai’s Sonata plug-in hybrid, midsizesedan, which crucially offers a more spacious back seat thanrivals Chevrolet Volt and Toyota Prius. Zuchowski admitted,“we’re very interested in their model because we think mobilityis going to dramatically change our business”.115

Of course, contract manufacture is nothing new. UPS hascontracted out production of its delivery vehicles for decades.Renault has become manufacturer for Bolloré’s BlueCarcarsharing platform. DHL Deutsche Post went even furtherand actually purchased a manufacturer of electric delivery vans(when the usual German commercial vehicle manufacturers

Chapter 5: Impact on Automotive Industry 87


couldn’t deliver one). What is new, however, is that this isbeginning to reflect a full separation of the brand andmanufacture. These orders effectively represent a fundamentalshift from a B2C to a B2B (or B2B2C) business model for thecar manufacturers. We should expect to see many such orderslooking forward: mobility brands custom-ordering purpose-built autonomous vehicles. For mobility managers inorganisations, it also means that their primary point of contactwill change. The dealer or the manufacturer becomes irrelevant.The mobility provider – be it a leasing company, an IT companyor a sharing operator – will become their primary point-of-contact.

The issue becomes even more compounded when we lookahead toward fully-autonomous, shared fleets.

There is no doubt that Apple and Google will requiremanufacturing capability to further progress their ownautomotive goals. Google at least has publicly addressed rumoursaround the manufacture of its own branded self-driving car,confirming it will not venture into (low-margin) manufacturingalone, but will instead partner with automakers. While Daimlerand BMW have rejected Google’s advances, Ford has alreadybegun discussions around a potential partnership, Fiat-Chrysler


“We should expectto see many mobilitybrands custom-ordering purpose-builtautonomousvehicles.”


has offered itself as a partner, and Lexus is already heavilyinvolved in Google’s self-driving tech trials.116

That Apple is developing a car has also been described as“an open secret”, having hired thousands of engineers and bignames from established car companies.117 Given the disruptionthat market upstarts Uber have caused, the threat that Googlepose, and the way Apple entered and decimated the entiremusic industry, it’s fair to say the prospect of Apple looms like agrim reaper over OEMs.

The OEM response: adapt or die?

Faced with fundamental transformation, the response ofindustry incumbents has been painfully slow. After ignoring –or analysing – the issue, the automotive status quo began totake the autonomous, electric, sharing revolution seriouslyaround 2015 – albeit with very different approaches.

A Morgan Stanley investors report in July 2015 countedthe rebrandings of an industry in flux: “Auto companies aretaking steps to rebrand and refocus their efforts in mobility…BMW is investing heavily in its ‘BMW i’ efforts including avariety of endeavors embedded in BMW iVentures andiMobility Solutions. Toyota established the ‘Toyota MobilityFoundation’… to help advance research activities in next-genmobility and in May 2016 announced a strategic-collaborationwith Uber, the same day as VW invested into Gett. Bosch, theworld’s largest auto supplier, rebranded its auto business as‘Bosch Mobility Solutions’ in keeping with the theme ofautomated driving and supporting technologies.”

Mary Barra, Chairman and CEO of General Motors,blogged: “We are moving from an industry that, for 100 years,has relied on vehicles that are stand-alone, mechanically



controlled and petroleum-fueled to ones that will soon beinterconnected, electronically controlled and fueled by a rangeof energy sources. I believe the auto industry will change morein the next five to 10 years than it has in the last 50, and thisgives us the opportunity to make cars more capable, moresustainable and more exciting than ever before.”

Barra threw her weight behind fully autonomous vehicles,announced a testing fleet of autonomous cars on its TechnologyCenter campus in Michigan and ridesharing programmes inFrankfurt, Shanghai and New York, and invested $500 millionin a “strategic alliance” with Lyft. “We believe the convergenceof ridesharing and autonomous vehicles offers greatopportunities… Many facets of the traditional industry arebeing disrupted, and we at GM believe this creates exciting newopportunities. Rather than fear disruption, we plan to lead it bydeveloping cars that don’t crash or pollute, that reducecongestion and that keep us connected to the people, placesand activities that are most important in our lives.”118

GM’s plan is to open a network of hubs where Lyft driverscan rent GM vehicles at discounted rates, and – based on itsaggressive acquisition of Cruise Automation – in the longerterm develop a fleet of autonomous vehicles together.119

Ford president and chief executive officer Mark Fieldssimilarly told delegates at the 2015 Consumer Electronics Showin Las Vegas: “We are driving to be both a product and mobilitycompany and, ultimately, to help change the way the worldmoves. Where do we best start? By addressing the mobilitychallenges facing people all over the world.” He went on toannounce Ford Smart Mobility, “to take Ford to the next levelin connectivity, mobility, autonomous vehicles, the customerexperience and big data… To be clear, our priority at Ford isnot in making marketing claims or being in a race for the firstautonomous car on the road. Our priority is in making the first



Ford autonomous vehicle accessible to the masses and trulyenhancing our customers’ lives.”120

Chasing Daimler’s car2go and BMW’s DriveNow, in May2015, Ford launched GoDrive, a free-float carsharing platformin London, with guaranteed parking at your destination. Itcharges by the minute with realtime charges displayed on theGoDrive smartphone app. With a fleet of 50 Fiestas and FocusElectrics open to just 2,000 people across 20 locations in London,it’s a small trial for a company the size of Ford121. But by July2015, the trial was extended to select Ford Credit customersacross the US, in Berkeley, Oakland, San Francisco, Portland,Chicago and Washington DC122. This next evolutionincorporated peer-to-peer sharing, allowing existing Ford carowners (who have financed their car via Ford Credit) to offertheir cars for rental to GoDrive users. Schemes such as easyCarClub and GetAround had already allowed car owners to renttheir own vehicles to others, but Ford became the first majormanufacturer to effectively create its own. Ford’s Vice Presidentof Marketing, David McClelland did a very good Travis Kalanickimpression when saying: “As most vehicles are parked and out ofuse much of the time this can help us gauge our customers’desires to pick up extra cash and keep their vehicles in use.”123

Daimler’s car2go began in Austin, Texas, in May 2010 with300 Smart Fortwo cars and a card membership model akin toZipcar. By late 2015 it had one million registered members in29 cities globally, and added the four-door Mercedes-Benz B-class to its fleet.124 A technology upgrade saw the login, ordering,and payment process shift from units installed in the car2gofleet to a mobile app. In almost all cities, drivers don’t need toreturn the car to the same spot, but they do need to find adedicated parking bay, and pay by the minute with no annualor monthly fees.

In July 2015, car2go took its first steps toward automation.



A joint pilot project with Bosch was launched to trial cars thatself-parked in multi-story car parks. “The existing parkingprocess will be revolutionised,” read the Daimler press release.“It is not the customer who parks and searches for their car; thevehicle drives to a free space independently and drives upcomfortably by itself again.”125 Daimler believes is can adjustthe sensor systems and the software in the existing car2govehicle fleet to do this, akin to a Tesla upgrade.126

Dr. Dirk Hoheisel, board member of Bosch, added: “Fullyautomated parking will be ready for mass-production beforefully automated driving. Low driving speeds and the informationfrom the car park infrastructure enable a fast implementation.”It’s easy to see how well this combination of automation andsharing would fit in a corporate carsharing scheme.

BMW’s DriveNow began as a joint venture with Sixt inMunich 2011, and now spans five German cities, Vienna,London, Copenhagen, and Stockholm. In London, it boaststhe largest fleet of shared electric vehicles in a car club, withover 10,000 members in the capital by May 2015.127 BMWalso entered the US market in April 2016, ditching its Europeanpartner Sixt for a direct offering. ReachNow launched in Seattleas a free-floating “premium” carsharing service, with an initialfleet of 370 vehicles, including the BMW i3, the BMW 3 Seriesand the MINI Cooper, and the intention of spreading to 10North American cities by the end of 2016. Its innovationsinclude an “almost instant approval process” in two minutes orless and free parking at meters and in residential permit zonesin Seattle. Additional paid-for extras to be rolled out soon afterlaunch included some intriguing industry firsts: a request servicefor a specific vehicle to be delivered to your driveway, anexclusive fleet of premium vehicles for employees or at residentialcomplexes that can remain onsite, and even an optionalchauffeur service, allowing you to book a car with a driver “for



those not wishing to get behind the steering wheel” – therebypotentially becoming a direct competitor to Uber.128

“It would be ignorant… if we ignore how young people areusing mobility,” said Peter Schwarzenbauer, BMW boardmember, at the launch of ReachNow “We are reaching youngerpeople who are not buying our cars.”129

Peugeot Citroën have even decided to re-enter the NorthAmerican market (where it hasn’t been since 1991) as a “mobilityoperator”, teaming up with Bolloré (the company behind thepopular French carsharing service Autolib) to take on Uber andZipcar. Its CEO Carlos Tavares told investors and analysts inApril 2016 that loaning and potentially leasing vehicles toAmericans was his preferred strategy in a 10-year plan to returnto North America.130

Not everyone in the industry, however, is so happy to wavegoodbye to their former careers. Hidden within a 2015 reportby Deloitte is an interesting outline of the simmering sentimentwithin the sector: “[Incumbents] believe that they can be at thecenter of actively managing the timing and pace of theseconverging forces. But the interplay of the converging forces ofchange may be less predictable and lead to faster upheaval thanthey think.”131 In other words, they truly believe they are stillthe experts. The report goes on to anticipate a “tension betweenautomakers, heavily invested in today’s product-centered system,and technological innovators looking to realize a more virtuallydependent world of mobility options.”

The head of R&D at Jaguar Land Rover, Wolfgang Epple,told journalists in June 2015: “We don’t consider customerscargo. We don’t want to build a robot that delivers the cargofrom A to B”. While JLR are taking part in several autonomoustechnology trials, their interest is for improved driver assistancesystems, not self-driving cars. “People want to use the emotionalside of the brain and autonomous driving does not generate



that experience,” asserted Epple.132 Similarly, Porsche chiefexecutive Oliver Blume told German newspaper Westfalen-Blatt that people wanted "to drive a Porsche by oneself" andthat Porsche did not need to team up with any tech firms.Quite tellingly, the interior designer of the Mission E leftPorsche to join Tesla in April 2016.

Volkswagen has also given mixed signals. It has a VW Golfcarsharing scheme called Quicar, but only in Hanover, Germany.It also has a joint venture in the Netherlands and a rental pilotproject in China, but failed in comparison to the Daimler orBMW schemes. Its luxury car brand Audi has no significantcarsharing partnerships. “We don’t really see the business casewith the current carsharing programs,” a VW spokesperson toldBloomberg in August 2015.133

This is plausible; it is somewhat well-known that neitherDaimler's car2go nor BMW's DriveNow operate profitably forthe time being. They are both considered ‘strategic’ investmentsinto an emerging and unavoidable market. Following theirDieselgate scandal, CEO Matthias Müller in April 2016announced the launch of a company to explore carsharing andother new mobility services, and also committed “to makeelectric cars one of Volkswagen’s new hallmarks.”134 VW’s plungeinto the new mobility market with its May 2016 investmentinto Gett is surely designed to gather experience and maintainbrand relevance amongst millennial consumers.


“Surprising modelsof collaboration willcome from variousindustries.”


Market consolidation: what will emerge by 2020

Despite being among the leaders in self-driving technology,Daimler has admitted that Apple and Google will becomeformidable competitors. Uber and Tesla have the incumbentindustry on the ropes. Carsharing and mobility systems makeowning a car almost superfluous.

When the automobile first came to market there were over400 brands within the first 10-20 years. Ten years after, a waveof consolidation and acquisitions slimmed this down to ahundred. The enormous growth and energy seen in the currentmarket, with Silicon Valley being thrown into that mix, is akinto those first years of the automobile.

We are now at the same stage and, at the moment, someautomakers can still play the goliath to many of the upstarts.GM purchased Cruise Automation in 2016 for $1 billion andinvested in Lyft. The tables may yet turn, however. Consideringthe market value and cash reserves of Apple, Google, Uber andeven Amazon, it’s not unrealistic to believe that existingmanufacturers themselves could be bought up by the playersthey perceive as Davids. FiatChrysler is small enough to bepurchased outright by most industry players – a fact not lost onits CEO, Sergio Marchionni. After unsuccessfully offering uphis company to GM and Ford, he has pragmatically acceptedFiat’s fate as a contract manufacturer, publicly offering to buildeither the Google car or Apple’s iCar.

It is firms that can adapt and change their models to a ‘zeroownership’ market that will survive. Schroders has warned itsinvestors that there are “structural trends in the sector thatcannot be ignored” and recommends companies where “themanagement teams have a coherent long-term vision for thecompany. We tend to prefer premium automakers, selectemerging market automakers, Tier 1 suppliers and tyre



companies as long-term holdings, steering clear (pun intended)of mass market automakers with high cost structures and a highdependence on their home markets.” Ouch.

Surprising models of collaboration and consolidation willalso come from various industries more remotely affected bythe mobility revolution. General Motors and New York realestate firm Stonehenge Partners are offering residents of the479-unit Ritz Plaza apartment building in New York access to afleet of eight shared SUVs parked in the garage. Daimler hastested out a shared mobility partnership with a suburban homedeveloper in Southern California, while Zipcar has worked withapartment giant Equity Residential across New York, Boston,Seattle and Washington, D.C, claiming to provide access to17,000 residents.135 In my conversations, I have met localgovernment officials across Europe, scrambling to change theirreal-estate planning guidelines to include (as mandatory) bothcharging stations and carsharing bays.

Meanwhile, on 17 March 2016, an unexpected indicationof future trends came not from an OEM at all – or even aSilicon Valley disruptor – but from one of the world’s largestmultinationals, Sodexo. The French-headquartered food servicesand facilities management company announced it was buyingXXImo (remember the Dutch all-in-one business mobility passfrom Chapter Four?). This was seen as a fit for Sodexo Benefitsand Rewards Services, said the firm’s press statement, as “aninnovative mobility platform” that “enhances the experience ofcommuting and business travel and opens the way to new typesof employee benefits that will bring ease and efficiency to theirday to day work.” A quick roll out in other countries is expected,starting with Germany.

Philippe Symons, CEO of Sodexo Benefits and RewardsServices Belux, said: “The acquisition of XXImo enhances ouralready strong offering in the employee benefits and mobility



solutions area further. Our solutions allow our clients andconsumers to concentrate on their main missions rather thanlogistics. It will bring ease and efficiency to their day to daywork and improve their work-life balance, key factors thatimprove the Quality of Life of employees in today’s competitiveeconomy.” A recent valuation of Sodexo put its market cap at£14.9 billion. OEMs and market disruptors alike will have tofit into line with the mixed mobility offerings that the marketwill increasingly demand – soon even Tesla will discover thatmanufacturing attractive cars is not enough.

We can expect leasing and financial-services companies,insurance companies, and even retail companies to be the nextto join the wave of acquisitions and collaborations.

Notes

113. KPMG (2014), ‘Me, my car, my life’114. BCG (2016), What’s Ahead for Carsharing? The New Mobility and Its

Impact on Vehicle Sales, February115. http://www.autonews.com/article/20160201/OEM/302019963/gm-

lines-up-urban-mobility-deals-while-ford-experiments-everywhere116. http://www.themanufacturer.com/articles/google-self-driving-ai-

considered-a-driver-amidst-liability-concerns/117. http://www.telegraph.co.uk/technology/2016/03/09/googles-eric-

schmidt-says-driverless-cars-could-hit-uk-streets/118. http://www.weforum.org/agenda/2016/01/the-next-revolution-in-the-

car-industry119. https://ca.news.yahoo.com/general-motors-invests-500 million-lyft-

part-plan-speed-202211190.html120. https://media.ford.com/content/dam/fordmedia/North

percent20America/US/2015/01/06/MarkFieldsCESRemarks.pdf121. http://www.theverge.com/2015/5/26/8659553/ford-godrive-

carsharing-london122. http://www.autorentalnews.com/channel/rental-



operations/news/story/2015/07/ford-launches-peer-to-peer-carsharing-program.aspx

123. http://www.theverge.com/2015/6/24/8837281/ford-peer-2-peer-carsharing-rental-scheme-monthly-charges

124. http://fortune.com/2015/09/28/car2gocar2gocar2gocar2go-mercedes/125. http://media.daimler.com/dcmedia/0-921-614316-1-1820448-1-0-0-

[email protected]?TS=1433907954671126. http://media.daimler.com/dcmedia/0-921-614316-1-1820448-1-0-0-

[email protected]?TS=1433907954671127. http://www.frost.com/reg/blog-display.do?id=5944335128. https://www.press.bmwgroup.com/usa/article/detail/T0258931EN_US

/bmw-group-launches-carsharing-service-reachnow-in-seattle129. http://www.ft.com/cms/s/0/db4f4c4e-fd9b-11e5-b3f6-11d5706b613b.

html#axzz46MZMekkT130. http://www.thecarconnection.com/news/1103273_peugeot-citroen-

will-begin-its-american-campaign-by-taking-on-uber-zipcar#src=10065131. Corwin et al (2015), Deloitte132. http://www.autonews.com/article/20150626/COPY01/306269983/jag

uar-r?d-chief-shuns-driverless-cars=133. http://www.bloomberg.com/news/articles/2015-08-10/german-car-

share-boom-gives-bmw-daimler-dibs-on-young-drivers134. http://evfleetworld.co.uk/news/2016/Apr/E-mobility-will-8216become-

one-of-Volkswagens-hallmarks8217-says-group-CEO/0438024855135. Hepler (2015), ‘Carsharing becomes a real estate perk with GM,

Daimler, Google’, GreenBiz,October 21



Chapter 6:Trucks, fleetsand industrialuses


“Electrification andself-driving technologynow have the potentialto create step-changesin efficiency, and evenalter businessmodels.”


The story for corporate mobility does not begin and endwith the passenger car. Far from it. Trucks, HGVs, LCVsand the myriad of purpose-built vehicles in-between will

continue to serve industry, and transport goods and services.And they too will be transformed in the coming revolution.

In 2014 alone there were more than 22 million commercialvehicles produced across the world; in Europe, more than800,000 new commercial vehicles were added to the roadsduring the first five months of 2015 alone.136

Traditionally this part of the transport industry has alwaysfought for marginal, incremental improvements. Each and everytwo percent efficiency improvement is worthwhile, as itcorrelates to millions in savings. As such, truck-fleet operatorshave traditionally been first to bring in many of the driver-assistance innovations, even before they started to appear incars. Telematics are standard features to monitor driver-behaviour, driver routing and fuel-use optimization. In-laneand auto-pilot speed assist too are industry standard for long-distance haulage. Yet electrification and self-driving technologynow have the potential to create step-changes in efficiency, andeven alter business models.

101


In Stockholm, electric vehicles are opening up newopportunities with respect to delivery times. Seuffert explains,“One of our projects is called project off-peak: you can delivergoods at night-time if you have an electric hybrid heavy dutytruck. Usually you cannot deliver goods between 10 in theafternoon and six in the morning, but within this project wesaid you allowed you to deliver goods using electric hybrids. Theprivate companies we can make 17 trips at night compared toonly 10 in the daytime due to traffic, so that’s a huge advantage.”

In May 2015, Daimler premiered the world’s first self-driving commercial vehicle licensed to drive on public roads,the ‘Freightliner Inspiration’. Far from a low-key event forindustry nerds, the truck was unveiled atop the Hoover Dam,against the back-drop of a lights and laser display. Rarely has alarge truck been made to look so exciting. The whole showgave off a very bold, clear message: the future for trucks isdriverless.

Since 2015, a pilot fleet of Mercedes Actros trucks withHighway Pilot operate semi-autonomously on Germanmotorways, giving the “drivers” time to finish paperwork.137

Publicity images quickly went viral of a truck driver sittingback and reading on his tablet while his Mercedes Actrosnegotiated traffic on a stretch of German autobahn.138

This will soon be a common sight.

Platooning: efficient, 24/7, driverless haulage

Six convoys of 44-tonne trucks left their home factories inEurope in early 2016, driving from Stockholm to Munich,crisscrossing Europe in tandem. The convoys arrived inRotterdam harbour together on April 6th. The trucks weredriving themselves. These autonomous ‘platoons’ were a cross-



sector project, including DAF Trucks, Daimler, Scania, andVolvo, called the European Truck Platooning Challenge,initiated by the Dutch government as part of its 2016 presidencyof the European Union. The Daily Telegraph described this“first-of-its kind European experiment” as a “glimpse into thefuture – synchronised autonomous trucks stop-and-start intandem, driving closer together, so they can ease the congestionof busy motorways.”139

The prospect of trucks ‘platooning’ (sometimes describedas ‘daisy chains’ or ‘road trains’) would clearly make road haulagesafer and more efficient. As the US publication Trucking Inforeports: “Platooning uses vehicle-to-vehicle communicationsand other technologies such as adaptive cruise control, collisionavoidance systems, radar and GPS data to allow two or moretrucks to ‘platoon’ in a very tight formation at highway speeds.The trucks constantly maintain a communication link witheach other (known as “V2V”, or vehicle-to-vehiclecommunication) and with the grid (“V2G”, or vehicle-to-gridcommunication). If the lead truck’s collision avoidance systemactivates its adaptive cruise control to slow down, the followingtruck or trucks will do the same”. Susan Alt, Volvo Groupsenior vice president of public affairs, was quoted as saying in2015 that this could be an on-road reality “in five to 10 years.”140

According to figures from Daimler, a five-truck platoonoffers an average six percent fuel saving, largely due to thebenefits of “drafting” – driving in close formation in theslipstream of the preceding vehicle.141 Niklas Gustafsson, chiefsustainability officer at Volvo Group, went further, telling theFinancial Times that fuel consumption represents about a thirdof the running costs for road hauliers, and platooning couldachieve savings of as much as 20 percent on fuel costs.142

European logistics companies could save €1.6 billionannually in fuel costs from platooning, according to calculations

Chapter 6: Trucks, Fleets and Industrial Uses 103


from Dr Lori Tavasszy, professor of freight transport and logisticsat the Delft University of Technology in the Netherlands. TheFinancial Times commented, “The technique could also havefar-reaching consequences for the use of the road networks, aswell as areas that handle large amounts of freight, such as portterminals. Companies that transport vast amounts of product,such as retailers and consumer goods groups, will also be likelyto benefit.”143

Such are the benefits that big companies across the worldare already investing heavily. Toll Holdings, Australia’s biggesttrucking company, owned by Japan Post Holdings Co Ltd, hasalready equipped some 3,000 vehicles with semi-autonomousfeatures including lane-change sensors. The Netherlands wantsto extend the 2016 trial of autonomous road platoons bysending cargo from Rotterdam, Europe’s biggest port,throughout the continent by 2019. The Canadian oil producerSuncor Energy Inc has in fact already ordered a fleet of trucksequipped to go driverless.144

The UK, determined to lead Europe on self-drivingtechnology, trialled self-driving trucks in platoons on publicroads in mid-2016 in Cumbria, North East England. Aspokesman for the Department for Transport said: “Newtechnology has the potential to bring major improvements tojourneys and the UK is in a unique position to lead the way forthe testing of connected and driverless vehicles.”145 Thus, theM6 motorway (by no means a quiet road) became home toconvoys of up to 10 driverless trucks controlled by one humandriver in the front vehicle. “The technology behind this testenables savings not only in the cost of operating the vehicles,but also through more efficient fleet management andmechanical diagnostics,” Jonathan Hewitt, executive vicepresident responsible for strategy and marketing at OctoTelematics, told Newsweek, “A move toward driverless vehicle



technology is also expected to reduce congestion on UKmotorways through the use of navigational data.”146

Another part of the UKCITE (UK Connected IntelligentTransport Environment) project, co-funded by a governmentgrant and the participating companies, sees Jaguar Land Rovertesting its own platooning system, known as CooperativeAdaptive Cruise Control, as well as its ‘Over The Horizon’warning system: to prepare drivers, or their cars, well in advanceof approaching an accident site.

Platooning saves fleet operators costs from fuel, wear-and-tear, accidents and insurance, and staff. Additionally, thesetrucks are also increasingly low emission. Norway’s plan forzero growth in car use between now and 2030 proposes that allnew heavier class vans, 75 percent of new long-distance buses,and 50 percent of new trucks be zero emission vehicles.

Off-road: the industries that ditched their drivers

Away from the on-road industry trials, fully autonomous,driverless vehicles have already had several years of active serviceoff-road, in industries such as mining and farming.

Mining company Rio Tinto has around 70 self-drivingvehicles hauling iron ore in the Pilbara region in West Australia.



These gigantic Komatsu self-driving trucks known asAutonomous Haulage Systems (AHS) are programmed to driveand navigate themselves with the help of sensors, GPS andradar guidance technology. Like military drones they are remote-controlled by a human many miles away – in this case fromPerth, 1800 kilometers from Pilbara. The trucks contain over200 sensors operated by Cisco networking technology, meaningthat – unlike drones – human intervention is largely a safetycheck. Through their use, fuel consumption and maintenancecosts have reportedly fallen, operations have sped up, and therisk to human life has sharply decreased.147

Saab (the defense and security company, not the ill-fatedcar company of the same name) is entering into autonomousmining applications in South Africa. Its October 2015 press-release stated: “Saab – together with Scania (the maincontractor), Autoliv, KTH (the Royal Institute of Technologyin Stockholm) and Linköping University – is involved in aproject known as iQMatic – the first step to autonomous heavytrucks for mining applications.”

Driverless trucks could also slot easily into industries thathave already embraced robotic helpers. In the port of Rotterdamin the Netherlands, containers are lifted off ships by roboticcranes and slotted into the right stacks with the help ofautomated trolleys. Handling at the Container TerminalAltenwerder in Hamburg, Germany, is automated with a fleetof 84 battery-powered driverless vehicles that transport freightcontainers between the wharf and the storage areas; navigationis performed by a network of 19,000 transponders installed inthe ground.148

Karsten Berns, in charge of mobile robots at the Universityof Kaiserslautern, Germany, is moving towards makingautonomous commercial vehicles a reality and, like consumervehicles, the number that are being used for commercial work



continues to rise. Berns’ team has worked on creating“autonomous control of a mobile bucket excavators,” in otherwords, self-digging diggers.149

Farms use autonomous machinery from tractors to harvesters.“We hear every day about self-driving cars but, truth is, in oursector, we’ve had them for years”, CEMA President RichardMarkwell told a European summit in 2015150. “In fact, it’sprobably fair to say that the agricultural machinery industry isone of the largest producers of autonomous vehicles in the world”.

The US manufacturer ATC claims its AutoDrive to havebeen the first truly autonomous navigation system available fortractors, using Laser-Radio Navigation System (LRNS) for “sub-inch positioning data” rather than GPS, intelligent software that“trains” the tractor without programming, sonar systems, andreal-time progress sent to your mobile phone. Completing theefficiency-minded transformation, ATC can also retrofit tractorswith a diesel-electric hybrid drive system, replacing gas. “A 400hp eDrive system provides 30 percent better fuel efficiency,quieter operation, exquisite control and 20,000–25,000 hoursof new life for your old workhorse,” reads the sales literature.151

There is even a tractor on the market with no driver cabinat all, merely a flat top (imagine one of those little autonomousrobot vacuum cleaners, but scaled up to tractor-size). The ‘Spirit’either directs itself or follows a lead vehicle, and can run for 36hours without stopping.152

The latest driverless tractor from Kubota, Japan, links via areceiver to the Quasi-Zenith satellite that is able to guide it towithin 3cm accuracy up and down a field, while also providinga data stream such as engine temperature, fuel usage, cropinformation and soil moisture. It can plough a field, applyfertilizers and pesticides, and can even handle the mud of ricepaddies. The company plans to bring the vehicle to market asearly as 2018.153



Given their relentless focus on efficiency, safety and a lackof emotional attachment to the act of driving, industrial truckoperators may well be the first vehicles to feature fullautonomous technology on public roads.

Robots taking our jobs

Public attention for self-driving cars has also shed light on thewider impact of robotics on the workforce. Quite obviously,the more driverless tractors and mining trucks are implemented,the fewer farm labourers and miners are needed. In logistics,robotic distribution – such as Google’s patented autonomousdelivery trucks – are a real worry for today’s delivery driver.154

This follow a clear chain, however. Even before cargo goes outfor delivery, it is increasingly handled by fully autonomous logisticsdistribution centres. Amazon’s in-house autonomous warehousesystem currently uses on-floor barcodes to navigate, but is rapidlyadding to its sophistication including computer vision, depthsensing, machine learning, object recognition, and semanticunderstanding of commands. (Incidentally, Amazon’s commitmentto human-machine interaction also extends to the car: it has alsopartnered with Ford to link its cars with Alexa, Amazon’s smartvoice assistant technology, allowing drivers to voice-commandtheir Ford to start while they are still inside the home).

One step further, Clearpath Robotics’ OTTO “heavy-loadmaterial transporter” can carry 1,500 kilogram loads aroundwarehouses fully autonomously. Its 20-50 meter lasers front andback can hone into a location within centimeters and are able tomanoeuvre or brake for real time obstacles. OTTO is able to dealwith changing environments and manoeuver around inconvenientobstacles, moving at 4.5 miles per hour.155 It’s already beenimplemented at a GE Healthcare repair facility in Wisconsin, USA.



And for the last-mile, the creators of Skype, under a newcompany called Starship, have begun testing an autonomoushome delivery robot that rolls along pavements and up tofront doors. “Most of the time the robot is autonomous,”Starship COO Allan Martinson has said. “And it knows itslocation with one-inch precision using computer vision andGPS and some other sensors” with potential interestedcompanies including “dry cleaning to bakeries to flower shopsto the local grocery stores.” It has already been tested in theUK.156 Domino’s Pizza in Australia has even turned a militaryrobot into a pizza delivery droid, something The Guardiangleefully described as the “beginning of the end of the pizzadelivery boy”.157

What is left for us humans then? Well, as the MIT directorsBrynjolfsson and McAfee have illustrated, a considerablenumber of job-descriptions may be at risk in the new machineage, but tasks that require high cognitive and creative inputs,and are highly specialized, will boom. As described in ChapterThree, robots and AI will replace the mundane, the repetitiveand the dangerous jobs.

In spite of all the press, it’s safe to ignore the avalanche ofdoomsday scenarios that postulate that 35-45 percent of jobswill go. In fact, I believe quite the opposite is true – therewill be new and different jobs created. Let’s remember that asrecently as 200 years ago, the vast majority of jobs in Europewere in farming; today it’s less than 1%. For the UK alone,KPMG suggests, “connected and autonomous vehicles willlead to a further 25,000 jobs being created within theautomotive industry.” More substantial job creation will occur“across the economy because of improvements to productivityand greater mobility of workers. Adjacent sectors such astelecoms and creative industries such as digital and mediawill also generate additional jobs as they serve new markets



created by connected and autonomous vehicles. These benefitswill be reflected in GDP growth which we forecast to be anadditional, cumulative 1 percent by 2030.”158 Overall in theUK this would mean upwards of 320,000 new jobs createdby 2030.

In my view, greater transparency of available talents andactivities, easier and lower-cost mobility, and countless new andindependently-defined job-roles will empower a greater numberof people to work in fulfilling endeavours.

As Richard Florida, the urban studies theorist and authorof “Rise of the Creative Class”, has argued consistently, therelease of creativity and passion which forms the backbone ofinnovation will drive regional economic growth, as the shacklesof mundane and employment will be unleashed on millions ofworkers. At the same time, the collaborative economy willfacilitate bringing together the right minds to transform oureconomy with new ideas and concepts.

Notes

136. http://www.statista.com/statistics/262747/worldwide-automobile-production-since-2000/



137. http://luxurysociety.com/news/51761?utm_content=buffer2ce10&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

138. http://www.truckinginfo.com/article/story/2015/07/can-autonomous-trucks-solve-the-driver-shortage.aspx

139. http://www.telegraph.co.uk/technology/2016/04/10/britain-is-head-and-shoulders-above-rivals-in-putting-driverless/

140. http://www.truckinginfo.com/article/story/2015/07/can-autonomous-trucks-solve-the-driver-shortage.aspx

141. https://www.youtube.com/watch?v=HdSRUG4KTPA142. http://www.ft.com/cms/s/2/d65866ec-982b-11e5-95c7-d47aa298f7

69.html#axzz416ALrCgi143. http://www.ft.com/cms/s/0/66eab950-fdb0-11e5-b5f5-070dca6d0a0d.

html#axzz45d3Yctmg144. http://www.reuters.com/article/transportation-tech-driverlesstrucks-

idUSL3N15407K145. http://europe.newsweek.com/self-driving-lorries-be-trialled-uk-

434013?utm_source=dlvr.it&utm_medium=twitter146. http://www.weforum.org/agenda/2016/02/where-will-self-driving-cars-

go-next147. Atkins International (2015), Connected & Autonomous Vehicles |

Introducing the Future of Mobility148. http://fleetowner.com/equipment/autonomous-vehicles-what-fleets-

want149. http://factor-tech.com/feature/autonomous-commercial-vehicles-will-

shape-our-jobs-and-lives/150. http://www.cema-agri.org/publication/driverless-tractors-and-

intelligent-excavators-how-digital-revolution-changing-farm151. http://www.autonomoustractor.com/152. http://www.fwi.co.uk/machinery/one-man-takes-control-of-16-

driverless-tractors.htm153. http://asia.nikkei.com/Business/Trends/Drones-self-driving-tractors-

may-make-life-easier-on-the-farm154. http://www.ibtimes.co.uk/google-planning-build-autonomous-

delivery-trucks-1542986155. http://spectrum.ieee.org/automaton/robotics/industrial-

robots/clearpath-otto-can-autonomously-haul-a-ton-of-stuff156. http://www.ctvnews.ca/sci-tech/self-driving-robot-might-be-future-of-

home-delivery-1.2832997



157. https://www.theguardian.com/technology/2016/mar/18/dominos-unveil-worlds-first-pizza-delivery-robot

158. kpmg (2015), Connected and Autonomous Vehicles – Opportunity,March



Chapter 7:Bikesharing,e-bikes and cyclesuperhighways


“Over 1,400 citiesand communitiesworldwide haveimplemented orplanned some sort ofbikesharing scheme.”


So far, so four-wheeled. The mobility revolution isbeginning to sound quite unhealthy, lazy even – muchlike Pixar’s film Wall-E, where humans become weak

and obese from floating around in pods. If you listen to thefounder of autonomous vehicle platform Zoox, Tim Kentley-Klay, you could be forgiven for thinking so. He told the 2014Automotive Tech.AD conference in Berlin, “At the moment,mobility is crushing the soul: Don’t speed, don’t drink, don’ttext. But what if we [ask], how can this stuff be awesome? Whatinspires me…is giving back people their lifestyles, so they cando what they want to do: texting, vegging out, drinking.”159

However, there is an alternate reality within the mobilityrevolution – and it is pedal-powered. A fundamental part of themixed-mobility model that all city authorities are rushing toadopt is the humble bicycle – albeit increasingly an electrifiedversion of it. But like carsharing, we may not necessarily see aspike in bike sales, just in usage. Bikesharing sees memberspaying daily, weekly, or annually for access to a fleet of bicyclesfor their use. City by city, local governments are rushing toestablish infrastructure for bicycling and bikesharing, seeing in

115


it the added social benefit of healthier lifestyles, more breathableair, and a reduction in vehicle traffic and emissions.

Bikesharing originated in Europe in the 1960s, but it reallyrose to prominence in 2007 with the Paris Vélib program,which provided more than 19,000 bikes at 1,230 stations. Sincethen it has grown rapidly in Europe, from London’s colloquiallynamed ‘Boris Bikes’ to Milan’s BikeMi scheme (which evenoffers two-wheelers for kids).

The Chinese cities of Wuhan and Hangzhou are home tothe world’s largest bikesharing operations, with more than50,000 bikes each. Google’s global bikesharing map notes over1,400 cities and communities worldwide to have implementedor planned some sort of a technology-enabled bikesharingscheme as of April 2016. Even in the US, one of the hardestnuts to crack for cycling infrastructure, 72 cities provide over25,000 bikes and 2,440 stations, run by a mixture of non-profit, privately owned and publicly operated models.

Washington’s Capital Bikeshare scheme has over 3,000bicycles and 350 stations. Like most bikeshare schemes it has arange of membership options, from one day, three days, amonth, a year, with the first 30 minutes of each trip being free.A smart phone app tracks the availability of bikes and docks, asdo touch screens on the docking station. Its website encouragesusers to “check out a bike for your trip to work, Metro, runerrands, go shopping, or visit friends and family”.160 The cityalso holds an annual “Bike to Work Day”.

Corporations are also increasingly offering access tobikesharing to their urban employees. For example, Bloombergencourages “all employees, through a variety of methods, toutilize low-carbon alternatives when traveling to work, includingpublic transportation, hybrid/electric cars… and bicycles.”161

EBay too inform CDP that “At different locations around theworld, we are experimenting with creative ways to get cars off



the road completely: a shuttle program at our headquarters inSan Jose, preferred parking for carpools and more fuel efficientcars in Salt Lake City, and bike share programs in Tel Aviv andBern.” Hewlett-Packard go a step further: “Many of theSustainability Network chapters have Bicycle Users Groups,which run initiatives for employees ranging from seminars onsafe cycling and bike maintenance to employee bike shareprograms.”162

Among North American bikesharing users, surveyrespondents have reported declines in automobile use of up to50 percent. People want cleaner, healthier lifestyles, and theywant to work in cities – and for employers – who help toachieve that.

Many cities have also set specific targets, in line with themobility breakthrough in 2020. The UK intends for 10% of alljourneys taken to be by bicycle by 2020; countless cities acrossEurope have expressed similar targets, backing these up withinfrastructure projects. Paris is investing €150 million to doublethe number of bicycle paths to 1,400 kilometers by 2020.

Clearly, fleet managers must begin to think morecomprehensively about “vehicles” under their remit.

E-bikes and intelligent mobility

According to their most avid advocates (attend any sustainabilityor smart city conference, and you’ll bump into one withinseconds) the electric bicycle is the true mobility revolution. It’sa bicycle with an integrated electric motor which can give you alittle extra “push”. When faced with a hill, for example, you canswitch to electric and zoom up it without breaking a sweat.

Despite models appearing as early as the late 19th century,the modern e-bike story began in China in the 1990s. Within

Chapter 7: Bikesharing, E-bikes and Cycle Superhighways 117


six years of their initial introduction, battery life was extendedby 160 percent while price was reduced by 30 percent. Nowspeeds of up to 25 kilometers per hour (15.5 miles per hour)are common. Being faster than traditional bicycles but cheaperthan automobiles, they are seen as the accessible mobility optionfor China’s emerging middle class, with 22 million e-bikesadded to China’s roads each year. In comparison, car ownershiphas increased by only 12 million per year.163

Unlike the Western model, Chinese e-bike adoption hasbeen consumer driven, not policy-led. However, since theChinese government declared a “war on smog” in 2014, thereare signs of a policy shift too. In March 2016, China Dailyreported Qiu Baoxing, former-vice minister of Housing andUrban-Rural Development, directly favouring the electricbicycle over electric cars: “I’m not a supporter of a governmentsubsidy for large-size electric cars like Tesla,” said the formerminister. “In cities like Beijing, the number of people passingthrough a 10-lane road per hour is less than the number ofpeople passing through a three-meter bicycle lane.”164

There remain mixed views as to whether the e-bike’s successin China is due to price alone; is it merely a stepping stone onthe way to car ownership for the aspirant middle class? In theWest, the story is clear. Car ownership is becoming moreexpensive, and environmental and lifestyle choices are turningthe younger generation away from the automobile and towardsalternatives that include e-bikes. Since their 2009 launch inGermany, nearly 2.5 million e-bikes have been sold, with535,000 units shifting in 2015 alone.165

The Dutch have a long love affair with the bicycle, but itturns out they love a bit of added power even more. In 2015 totale-bike sales came to 276,000 units sold, representing a 24 percentgrowth on the previous year.166 In other words: one percent ofthe Dutch population bought an e-bike in 2015 alone.



In June 2015, Milan introduced 1,000 electric bicycles toits BikeMi bicycle network, boosting the total number of publicbikes in the city to 4,600. The bicycles include batteries thatallow a range of 55-65 kilometers on a single charge and can bere-charged up to 300 times. A display shows the level of chargein the battery and an inbuilt GPS displays the route (with theadded bonus of being able to locate the bicycles if they are lostor stolen). These e-bikes were introduced at a cost of € 0.25 forthe first half-hour, rising to € 3.75 for two hours. “The Ministryof the Environment has included €35 million for sustainablemobility and, for the first time in our legislation, recognised thebicycle as a means of transport for the ‘home-work’ commute,”said Barbara Degani, Undersecretary of the Ministry of theEnvironment, which invested € 4 million in the bicycles.167

In the UK, the University of Oxford added electric bikes toits bikeshare fleet in 2016. Its delivery partner Bikeplus israpidly expanding, with over 200 electric bikes in 11 projectsnationwide, including towns and villages.168 Journey Matters inRotherham, a small town in Yorkshire, will provide access to 70e-bikes both for commuter and general public use. WeCycle inHebden Bridge (a village known for both its Eco-centricresidents, and for some of the steepest gradients in the UK) has15 e-bikes including cargo bikes for hire by local residents andbusinesses. Co-Wheels – initially a carsharing operator – hasadded 24 e-bikes at two workplace hubs in Bristol, England’s8th largest city. The Bristol e-bikes are at self-service, smartcardoperated bike lockers bookable through the Co-wheels car clubwebsite or app, and are available to council employees duringoffice hours and to residents on weekends and evenings.169

There are numerous entrepreneurial innovations too,attempting to tap into the demand. The Copenhagen Wheeldesigned by researchers at MIT’s Senseable City Lab, is a singlewheel with in-built propulsion that can – in theory – be added



to any bicycle to transform it into an e-bike. “When you brake,your kinetic energy is recuperated by an electric motor andthen stored by batteries within the wheel, so that you can haveit back to you when you need it”, explains professor CarloRatti, Director of the MIT Senseable City Lab. “The bike wheelcontains all you need so that no sensors or additional electronicsneed to be added to the frame and an existing bike can beretrofitted.” It is supported by the Lord Mayor of Copenhagen,who has said, “our city’s ambition is that 50 percent of thecitizens will take their bike to work or school every day. So forus, this project is part of the answer to how can we make usinga bike even more attractive.”170

You’d be forgiven for thinking this is all very far removedfrom the traditional automotive industry. But it’s not. Ford aretaking e-bikes very seriously. Its own prototype foldable e-bikewas touted around the industry press in 2016, with the(somewhat wordy) tag-line “Your own personal multi-modaltransport system”.171 Ford anticipates that demand will be highfor a foldable e-bike in a multi-modal, mixed-mobility future.You cycle as part of your commute, fold it up, and hop into thecar, bus, or train. It could be the first-mile, last-mile missinglink. The success of fold-up pedal power companies such asBrompton Bicycles, which grew form a turnover of £1.7m in


“In a multi-modal,mixed-mobility future,your cycle could be thefirst-mile, last-milemissing link.”


2002 to £28m in 2014172, testifies to the interest in the market– add some (green) power to those wheels and Ford’s marketapproach seems quite reasonable and sensible, as it starts to fillthe hole left by plummeting car sales.

There is even a hint of connectivity to Ford’s early designs.Its two bikes – the MoDe:Me and MoDe:Pro – included crowd-sourced designs to incorporate the features of real-life urbancommuters. This resulted in a navigation system that can utilizepublic transit options, provide charging station locations, andeven weather and parking cost information. Vibratinghandlebars let the rider known when and where to make a turn,and turn signals are triggered automatically.173

A “No Sweat” mode in the Ford e-bike also ensures you canarrive at your destination without looking a sweaty mess forthat all-important work meeting – an advantage over thetraditional bicycle that, for corporate use, should not beunderestimated. Retailer Electric Bikes New Zealand forexample saw a 35 percent increase in sales in the year to April2016, and general manager Chris Speedy told local publicationBusiness Day: “You’re as fresh as a daisy in your business clothes,that’s the difference.”

The infrastructure challenges for mixed mobility

Beside the ancient capital of Chengdu, southwest China, a newcity is being built for 80,000 people that could serve as a modelfor modern, mixed-mobility. It’s a Chinese interpretation ofNew Urbanism. According to McKinsey, instead of a layoutbuilt around the needs of the automobile, “the streets of whatwill become Tianfu District Great City are designed so anylocation can be reached in 15 minutes on foot. Motorizedvehicles will be allowed on only half the roads; the rest are for



walkers and cyclists. Tianfu is an example of transit-orienteddevelopment (TOD)—high-density, mixed-use urbanenvironments with easy access to mass transit. Such developmentshave environmental benefits in the form of fewer greenhouse-gas emissions, as well as less air and noise pollution. They haveless congestion and therefore fewer accidents; they can also beremarkably livable and attractive to residents of all ages.”

Clearly, designing cities from scratch is far easier thanretrofitting old cities. Europe’s ancient streets and lack ofgreenfield sites large enough to build new cities on face clearinfrastructure problems. But they are not insurmountable. InFebruary 2016, a significant legal case in London marked thetransition from one outgoing mode of transport toward a newapproach. London’s Black Cab drivers lost their legal case againstthe east-west cycle Superhighway scheme between Paddingtonand Tower Hill. These new, segregated cycle lanes will removeroad space from general traffic and, at least in London, thatdoesn’t happen without a fight. Eighty percent of all trips madeby people and ninety percent of all goods moved in Londonevery day are still on roads. Yet congestion costs Londonapproximately £4 billion a year in delays and lost productivity;the public health cost of emissions is said to be between £2.4billion and £3.7 billion.175 Moving people away from fourwheels and onto two is clearly a smart option.

London is in fact building twelve cycle superhighways. NewYork expects to have 1,800 miles of bike lanes by 2030. Delhi isconsidering proposals to set up separate bike lanes and isproviding bike parking near public transport stops. Moscow isexpanding bike sharing and adding dedicated bike lanes.176

Norway plans to spend close to $1 billion constructing bicyclehighways for commuters despite severe winters andmountainous terrain between cities.177

Toronto, where winter temperatures can plummet to -25oC,



began to snow plough 49 kilometers of its busiest bike lanes forthe first time in 2015. This was done in part thanks to datacollected by the Toronto Cycling App, a tool launched in May2014 to inform development and upkeep of the city’s cyclingnetwork. The app tracked around 4,000 users and 90,000 tripsfor four months and uncovered user bottlenecks, safetyimprovement, demographic information, and the type of tripsor roads people were taking.178

Popular cycling app Strava also sells its own data to cityauthorities to use in a similar way. Brian Riordan, manager ofStrava Metro, told the Guardian that the data – which iscollected anonymously to collate a “heat map” of cyclists’ routes,journey durations and frequency – is “incredibly useful forurban planners… In London [2014] we tracked 5 million tripsand 4 million of these are commutes. You can see where cyclistsare avoiding – possibly despite your best efforts to improveinfrastructure – or what is overused. You can quickly locateareas in a network that can be improved or connected.”179

Strava Metro is currently working with over 70 urbanauthorities worldwide. Indeed most major cities in the worldare investing in bicycling infrastructure in one way or another.The World Economic Forum argues that, “new mobility modelssuch as carsharing, bike sharing, and smart parking [help to]improve mobility… Now is the time for further public-privatecooperation on pilots as part of a push, at federal, city andindustry levels”.180

Frost & Sullivan’s Martyn Briggs believes that cities“investing hard on the infrastructure side – segregated cyclelanes, cycle superhighways – mean that it’s going to becomeeasier, safer and of course more sustainable to use cycle orbicycles than a car. That many of these systems are also usingelectric bikes means it is going to be easier to use and you’ll beable to go further distances.”



Most city bikeshare schemes, he argues, remain subsidisedand increasing their user numbers can come down to policydis-incentives (making it harder to use cars, through emissionscharging, congestions zones and reduced parking etc) as well asincentives to cycle.

In 2016 Milan announced a plan to pay its citizens to cycleto work in a bid to cut air pollution in the city. It bid for a sliceof a €35 million (£27 million) fund set up by the Italiangovernment for sustainable transport schemes that could Italy’sdangerous levels of air pollution. Milan’s bid would follow aFrench trial from 2014 whereby employees were paid €0.25 perkilometer cycled.181

There are risks – Rome’s Roma’n’bike scheme facedinsolvency after just two years.182 But the rewards of getting itright are huge. In Helsinki, which is investing heavily in mobilityas a service, Sampo Hietanen, chief executive at IntelligentTransport Systems (ITS) Finland believes the electric bicyclemay prove an even more popular than self-driving cars as a last-mile solution. He told the Helsinki Times that the bicycle istypically also the fastest way for staff to reach their workplacesfrom a metro station.183 Already in Copenhagen, arguably thecycling capital of the world, 56 percent of cyclists ride theirbike to work because it’s quick and easy, 19 percent for theexercise, and just 1 percent because of environmental concerns.

Bikesharing also offers fertile ground for consolidatedpayment systems. Bikeshare could soon operate seamlessly witha city’s transit system cards and also work across different cities,according to Jay Walder, CEO of the bike share operatorMotivate, integrating with existing transit system smart cardsand eventually migrating to smartphones.184

When Switzerland’s largest bike sharing service providerPubliBike merged with velopass in 2013, it also began offeringcustomers access to over 1,000 bikes and e-bikes from any of



the 100 stations across Switzerland, with a single swipecard. Itsobjective, and tagline, was: “1 network, 1 brand, 1 card”.185

Sound familiar?

Notes

159. http://spectrum.ieee.org/transportation/advanced-cars/meet-zoox-the-robotaxi-startup-taking-on-google-and-uber

160. https://www.capitalbikeshare.com/161. Esgtrends.com162. Esgtrends.com163. http://thecityfix.com/blog/e-bikes-bring-individual-sustainable-

transport-china-maya-ben-dror/164. http://www.chinadaily.com.cn/business/2016-03/18/content_23946

340.htm165. http://www.deutsche-handwerks-zeitung.de/das-wichtigste-ist-das-

vertrauen-zum-haendler/150/4562/326547166. http://www.bike-eu.com/sales-trends/nieuws/2016/4/huge-growth-in-

dutch-e-bike-sales-in-2015-10126019167. http://www.eltis.org/discover/news/milan-adds-1-000-e-bikes-city-

bike-scheme-italy#sthash.oIM2Mre9.dpuf168. http://www.carplus.org.uk/archived_newsletter/shared-mobility-news-

march-2016/169. http://www.bike-eu.com/home/nieuws/2016/3/e-bike-share-schemes-

start-to-roll-out-in-uk-with-government-funding-10125970170. http://senseable.mit.edu/copenhagenwheel/wheel.html171. https://cleantechnica.com/2016/04/13/ford-gives-itself-an-ev-culture-

makeover-with-ebikes/172. http://www.theguardian.com/lifeandstyle/2015/apr/17/brompton-

bicycles-the-unfolding-saga-of-a-two-wheeled-success-story173. http://gas2.org/2015/03/11/ford-launches-e-bike-experiment-in-

conjunction-with-its-cars/174. https://www.transportxtra.com/publications/local-transport-

today/news/48137/taxi-drivers-lose-challenge-against-e-w-superhighway

175. https://www.kcl.ac.uk/lsm/research/divisions/aes/research/ERG/researc



h-projects/HIAinLondonKingsReport14072015final.pdf176. http://www.mckinsey.com/business-functions/sustainability-and-

resource-productivity/our-insights/urban-mobility-at-a-tipping-point177. http://www.hybridcars.com/norway-aiming-for-100-percent-zero-

emission-vehicle-sales-by-2025/178. http://www.theguardian.com/sustainable-business/2015/nov/27/city-

cycling-routes-app-toronto-glasgow-bikes-data179. http://www.theguardian.com/sustainable-business/2015/nov/27/city-

cycling-routes-app-toronto-glasgow-bikes-data180. http://www.weforum.org/agenda/2015/11/are-we-ready-for-self-

driving-cars181. http://road.cc/content/news/180716-polluted-milan-could-pay-

citizens-cycle-work182. http://www.bloomberg.com/news/articles/2014-06-19/romes-bike-

sharing-program-is-a-bust183. http://www.helsinkitimes.fi/finland/finland-news/domestic/13448-

helsinki-to-have-little-need-for-parking-space-in-2030.html184. http://www.fastcoexist.com/3040950/the-future-of-bike-sharing-

becoming-part-of-public-transit185. https://www.post.ch/en/about-us/company/media/press-

releases/2013/national-publibike-bike-sharing-scheme



Chapter 8:Sharing, renting,leasing andinsuring


“Like a mobilephone provider,leasing companiesadvise, consult,recommend andprovide support acrossmultiple brands ofhardware. Thecustomer’s (and thefleet-manager’s) loyaltywanders away from thecar dealer and any onebrand, to the leasingcompany.”


The current model for full-service car leasing and financingis strikingly similar to mobile phone providers. Of the€50 per month you pay for an iPhone, €20 per month

goes to service (calls, texts, data), and some €30 per month paysfor Cupertino’s hardware. Just as lease-car drivers switch cars atthe end of their term, most people choose, at the end of the 24month phone term, to simply continue their monthly paymentwith a new model smartphone.

Over time, there is a genuine detachment from the actualpurchase price, and from the brand of the hardware. Manysmartphone owners or operational lease customers will struggleto know the actual purchase price of their phone or car, as it hasbeen neatly sliced into monthly packages. And for consumers,it’s a test of loyalty when switching phones, but most are morelikely to stick with Telefonica or Vodafone when they switchhardware, in the same way they will stick with the same leasingprovider when they trade their BMW for an Audi.

Between the carriers and Apple, it’s a symbiotic relationship.The carriers do the dirty work of marketing and selling the

129


phone to you, and in return they get the £20 plus commissionon the purchase price of the phone. Apple gets a footprintmuch, much larger than it could ever achieve even if it put anApple shop next to every Starbucks.

For automobile companies, non-captive leasing companiesare both a footprint-enhancing sales machine, and a threat. Asleasing companies advise, consult, recommend and providesupport across multiple brands, the customer’s (and the fleet-manager’s) loyalty wanders away from the car dealer and anyone brand, to the leasing company.

Of course, this still varies across countries in Europe. InFrance and Germany you can still find companies with fleetmanagement departments with some 10-20 people. In the UK,however, leasing dominates the corporate market. Even mid- tolarge companies with 20,000 staff might have the responsibilityfor ‘procurement, real estate and fleet’ shared over only a fewshoulders. Much of the service is outsourced to the leasingcompany.

British soft drinks company Britvic, for example, outsourcesits fleet management to Lex Autolease and its circa 550 cars and100 vans are regularly upgraded. In 2015, Lex undertook areview of Britvic’s light commercial fleet focusing onaffordability, maintenance, reliability and environmental costs,and switched to Volkswagen Caddys with Bluemotion engines,projected to save the business £70,000 a year and reduce itsannual CO2 emissions by more than 90 tonnes.186

Celesio, best known for its Lloyds Pharmacy subsidiary,leases 90 percent of its 620 cars and 1,650 vans through Arval.As well as the cars, Arval provides vehicle ordering, scheduling,servicing, licence checking and downtime management. MartineSmith, distribution manager at Celesio, outlined to Fleet Newsthe benefits of such an outsourced model: “Having Arval handle



a lot of the administrative elements leaves us to concentrate onstrategic fleet objectives, such as risk management programmes,review and development of the car policy, and exploring anyinitiatives that can help us in running the fleet more cost-effectively.”187

According to the European publication Future Fleet,leasing (or Personal Contract Hire - PCH), is also the preferredchoice for many Small Medium Enterprises (SMEs), self-employed individuals and sole traders who are looking tooperate one or more vehicles but no wanting to own vehiclesoutright. It also advises that a vehicle obtained via a PCHagreement can come with a fixed mileage allowance and 50percent VAT saving.188

Many businesses also offer lease cars to their employees viasalary sacrifice models. Engineering firm WSP ParsonsBrinckerhoff used to directly own its fleet of 320 vehicles, butnow offers them to employees direct through a salary sacrificemodel. “We felt salary sacrifice gave us that ‘best of bothworlds’ solution,” Dennis Dugen, the employee benefits andcar fleet manager, told Fleet News. “We could turn round toemployees and say ‘you can have any car you want’ and it alsoprovided us with an early termination fund that meant ifpeople did leave us we could return the cars without incurringextra costs that the scheme hadn’t already funded… We havegiven people a car allowance and that is it. There aren’t anyshocks and surprises over and above that for the firm. It setsthe cost of operating cars in stone somewhat, other thanbusiness mileage claims.”189

Predictability of cashflow and the more efficient use ofassets through use-based payments are key arguments forfull-service leasing, but also for all models of on-demandmobility.

Chapter 8: Sharing, Renting, Leasing and Insuring 131


Carsharing, rentals and leasing: convergingmodels

For most fleet managers and end-users, the intended durationof use has for many years determined the preferred provider ofthe vehicle. It’s a model that had become perhaps toocomfortable, too staid.

This model is changing, however: just as the user’s profilebegins to gain flexibility, so too are the various providers melting,merging and launching new offerings that blend seamlesslybetween ridehailing, sharing, rental, and leasing. By 2020 wewill see these terms and offers begin to blur, as providersinnovate, merge and acquire toward full-service models.

First, carsharing is growing up fast with the help of thetraditional car rental firms. While clearly innovative and creatinga new market, Zipcar struggled to turn a profit until it wasbought by Avis Budget in 2013. The acquisition was describedby the International Business Times as “a very loud andencouraging merger for an industry that up to now has beenmostly populated by new ventures and small in-houseoffshoots…”

“Prior to the acquisition of Zipcar by Avis Budget Group,there was a significant amount of growth in the [carshare]industry,” Julian Espiritu, managing director of Abrams



Carsharing Advisors, told Auto Rental News in April 2015.“Since car rental companies have gotten into carsharing, it’sbeen hard… for independents to launch a carshare operation.”190

Two years earlier Zipcar had itself acquired London car-sharingbusiness Streetcar, which had more than 1,700 cars and vans,for £32m.

Europcar first dabbled with carsharing in 2008, launchingEuropcarClub in France, followed by the UK a year later. It wasoffered as a two-tier subscription service – ‘easy’ and ‘premium’– for “those who have decided to opt out of second carownership, want the flexibility of different cars to suit differentneeds, or… businesses who don’t want the financialcommitment of leasing or buying company cars.”191 Thelearnings from that operation would ultimately be rolled intoUbeeqo, following its purchase of majority in 2015.

When Enterprise Rent-A-Car swallowed up City Car Club,at the time the UK’s biggest independent carsharing company,in April 2015, it had over 800 vehicles available for hire in 17cities around the UK, allowing customers to hire cars for halfan hour for just £2.50.

Consistent with the theme of expanding beyond thetraditional vehicle-use profiles, Enterprise has also added longerterm rentals to its portfolio. Its ‘Month-or-More Plan’ positionsitself as “a flexible alternative to a traditional rental or leaseagreement”. The longer you rent a vehicle, the more you save: asecond month is rewarded by $25 off; $50 off in month three,and a $75 discount at four or more months, up to a maximum11 months. This is specifically aimed at the corporate market,saying in the press release: “Whether your long-term hire needis for contractual work, seasonal work or new employeeprobation periods, you can rent only when it’s convenient foryour business… Our goal is to provide you a cost effectivealternative to long-term leasing or buying, saving your business



unwanted expenses … we cycle our cars regularly, you can beassured of driving practically new vehicles, without having toplan for servicing or maintenance of your car.”192 It’s a modelthat commercial-vehicle users in the UK have become veryfamiliar with: Northgate Vehicle Hire is more than happy toprovide rental agreements to use a van for one day, one month,one year or even three years.

Dollar’s long-term car rental plan ‘Dollar 4Business’ offersa similar service, offering car rental for anywhere between twoand 11 months, and bills automatically each month with noneed to return to the Dollar rental facility until the vehicle is nolonger required.193

Europcar also now offers a ‘£1 one-way’ rental solutionavailable exclusively online on Europcar websites. The attractionis similar to a free-floating, or point-to-point carshare, althoughyour chosen destination may not always be where the cars needsdropping off. The theory being that Europcar often needs itsvehicles shifting around its various sites to meet flexes indemand, so why not get a paying customer to deliver it ratherthan staff. Users can find out which routes are available byvisiting Europcar websites where an interactive map shows thecities where cars need taking. The extremely low cost pointcould appeal especially to the younger market.194

Meanwhile its Ubeeqo carshare product launched a mobilityapp ‘Matcha’ in London and Paris in January 2016, to provideaccess to cars for use by the hour from £6 per hour (inclusive offuel for the first 50 miles). In London, users will eventually beable to use the app to book a taxi or chauffeur service whenthey prefer to be driven rather than doing the driving, as well asaccess to public transport services. This move sees Ubeeqoeffectively entering the ‘killer app’ arena for corporate mobility.

“Ubeeqo takes the sharing economy to the next level bycombining a range of mobility solutions in one place,” said



Benoit Chatelier, founder and CEO of Ubeeqo. “There’s noneed to download as many applications as there are servicesavailable, with all that’s involved in dealing with differentsuppliers. Ubeeqo streamlines the process – with centralisedcustomer support, payment and billing all from the oneplatform.”195

In the same spirit of expansion, we should expect leasingcompanies (captive or non-captive) to extend their servicedownward, for terms shorter than the traditional three or fouryears, and also add innovative service-offerings. At the 2016Detroit Auto Show, Ford revealed two new connected-car-enhanced programmes via its Ford Credit captive financesubsidiary:

• The Ford Credit Link pilot programme in Austin,Texas, will allow groups of three to six people toeffectively share a 24-month lease, dividing use ofthe car among themselves. An onboard device andsmartphone app allows the group to reserve drivetime, communicate with each other, and check thestatus of an account or vehicle.

• Its Lincoln Miles pilot will give current leasecustomers credits of $100 to $1,000 for unusedmiles, plus track their current mileage and see end-of-lease mileage estimates. This helps it keep in linewith declining car use among drivers, plus a moreattractive offering and higher price for the used carat the end of the lease period.196

Audi launched a similar program in Sweden in 2014, calledAudi Unite, which bundled costs, fuel and maintenance, into amonthly fee split among group members. According to Leasing



World, “Both Ford and Audi need customers willing to trysomething new, and urban dwellers in particular are expectedto be more receptive to an alternative to car ownership.”197

Another fleet manager of a UK-based multinationalcompany told me that they had it put into their salary-sacrificeleasing agreements in Denmark that their cars be rented out toothers. So you drive your lease car to work, and rather thanleave it parked from 9-5 it is available to others at £10 per hour.Ford’s pilot program in Detroit actually advertises to customersthat they can “earn your lease payment back”.

Insurance challenges: who is liable?

As innovations in the flexible use of vehicles abound, insurancecompanies are struggling to keep up. The classic model ofinsuring one car and one driver simply is no longer holding up.For decades, insurers have become increasingly granular in risk-profiling and have provided more unique policies and coverageto individuals. They are now finding they need to revert back tothe fundamentals of insurance: coverage of a pool of drivers anduses.

They are needing to develop new products to deal with:


“Insurancecompanies need torevert back to thefundamentals ofinsurance: coverage ofa pool of drivers.”


• non-professional drivers involved in ridesharing, • professional drivers in an Uber-like models, • vehicles that are offered to any driver, from 18 to

100 years of age and with varying driving histories,by carsharing providers, and

• vehicles that are shared peer-to-peer.

The International Business Times noted how insurancecompanies are still very divided on carsharing: “Although all ofthe sharing companies provide insurance on the vehicles,insurers are not too happy about the possible litigation thatcould arise. Indeed, the New York Times approached insurancecompanies… asking them to comment on whether they woulddrop insurance coverage if they learned a car owner wasoutsourcing his vehicle. For the most part, insurers eitherwouldn’t comment or said they would not renew policies ordrop coverage in these cases. This uncertainty led California,Oregon, and Washington to establish rules for carsharing,including prohibiting insurers from dropping coverage of vehicleowners who participate in these arrangements.”198

The larger schemes such as Zipcar provide third-partyautomobile liability coverage to members as either personalinjury protection (PIP) or no-fault coverage, depending on thelocal authority requirements. But peer-to-peer carsharing suchas RelayRides and Getraround raise “insurance questions”,concluded the American Committee for Review of InnovativeUrban Mobility Services, and “most state insurance laws havenot kept pace… the fundamental insurance issue with peer-to-peer carsharing is defining when the vehicle owner’s policy endsand when the… operator’s commercial policy begins.”

An even greater challenge presents itself to insurers whenautonomous vehicles come on the scene. In one sense, self-driving cars press a reset button on everyone’s driving records.



Can’t drive, banned from driving, or terrible at driving? That’sfine – just jump into an autonomous vehicle, it does all thedriving for you.

More crucially, however, the promise of self-driving,accident-free cars also threatens the fundamental business modelof insurers. Where there are no accidents, there are no claims.Where there are no expected claims, there is very little premium.In turn, if their relative safety records play out as expected,human drivers could actually be priced out of existence – to thechagrin of many, but for the safety of all. Scott Le Vine notes,“The difference in insurance costs will be, I think, a very strongmotivator [toward shared autonomous mobility]”.

There are early signs that this is already happening. Thepotential for the autonomous technology assisted emergencybraking (AEB) is so significant that, despite the system’s relativeinfancy, the Association of British Insurers has alreadyannounced that AEB will be taken into account in insurancegroup ratings.199 Basil Enan, the boss of CoverHound, an onlineinsurance broker, told The Economist that as well as givingdiscounts to drivers who install black box telematics devices,insurers are offering lower premiums on cars with assisted-driving features because they reduce accidents. He thinks thatin future “manual driving” will increasingly be penalised: “Themore miles you’re logging on autopilot, the less you’re going topay.”200


“Where there are noaccidents, there are noclaims... and very littlepremium.”


This is another nod to the convergence of ridesharing andcarsharing. Would a car2go still want to rent out its vehicles tohuman drivers, or rather switch to an autonomous model?Would either the driver or the operator be effectively priced outof doing so even if they wanted to? Once your local Zipcarbecomes autonomous and hailable by an app on your phone, itis effectively the same as Uber, and the distinction betweencarsharing and ridesharing/hailing no longer applies.

Scott Le Vine agrees, suggesting that over time, carsharingoperators “will not wish to deal with the messiness of humandrivers. From the operatives’ perspective there’s really no benefitin dealing with human drivers and crashes.” Still, it will becrucial to identify liability – in other words, who was drivingand who is responsible – in case of incident. According to a2015 report into the competitiveness of European SmartSystems Technologies, “it is of essential importance for insurancecompanies and all road users whether the responsibility lies



primarily by the human who uses the car, the owner of thevehicle or the vehicle manufacturer or a vehicle supplier. For anacceptance of automated vehicles, the balance between thesethree potential responsibilities has to be established.”

It is the imperative of insurers – many of whom currentlyderive up to 50 percent of premiums from car-insurance – toinnovate and adopt a fundamentally new business model. Asmobility brands (soon including Google and Apple) maybecome autonomous fleet operators, insurers will need to movefrom a B2C driver-insured model to becoming B2B insurers of:

• manufacturers, for the core technical liability ofhardware and software failure,

• operators, for the remaining risk of collision, evenin regulated environments,

• infrastructure providers, who may makecommitments to the manufacturers and operatorsto provide connectivity for self-driving fleets.

The key to unravelling liability in any claim is data. As futuremobility blog 2025AD notes, “Event data recorders may bringeverybody closer to an answer. Once automated driving arriveson our roads, these devices will become more prevalent. Fireand shock-proof, the appliances are similar to the black boxesof airplanes. Working like a log book, they store relevantinformation to shed light on what went on in the decisiveseconds before a crash… register faults in the assistance systems,software bugs or network failures.”

According to US lawyer Andrew Garza, “This will resolvemost liability issues. Maybe there won’t even be a need foreyewitnesses to say ‘this is what I saw’. Instead, we’ll let the datashow. That’s the best evidence we can have. Reviewing that datawill be a game-changer.”201



Self-driving cars will soon be considered legal “drivers” inthe US following a letter issued by the federal agency that setsthe rules on road usage. The National Highway Traffic SafetyAdministration (NHTSA) supports Google’s claim that self-driving cars should be allowed on the same roads covered bythe same laws as vehicles driven by humans. This is a big stepforward for the company’s driverless car project.202

When Google’s AV had its first at-fault accident in February2016, on a busy Californian six-lane boulevard, some of thesequestions were brought into sharper focus. The car wasfollowing a recent change to its programming, to allow for“the spirit of the road” – i.e. allowing the car to predict likelyhuman driver behaviour rather than strictly following the trafficcode. Google released a statement explaining what happenednext: “It… detected sandbags near a storm drain blocking itspath, so it needed to come to a stop. After waiting for someother vehicles to pass, our vehicle, still in autonomous mode,began angling back toward the center of the lane at around 2miles per hour – and made contact with the side of a passingbus traveling at 15 miles per hour. Our car had detected theapproaching bus, but predicted that it would yield to us becausewe were ahead of it… Our test driver, who had been watchingthe bus in the mirror, also expected the bus to slow or stop.And we can imagine the bus driver assumed we were going tostay put. Unfortunately, all these assumptions led us to thesame spot in the lane at the same time.” It added, somewhathopefully, given the world’s media were about to run with thestory ‘robot crashes into bus’, that “This type ofmisunderstanding happens between human drivers on the roadevery day.”

Google said it had since refined its software following theincident, acknowledging that buses and other large vehicles areless likely to yield: “In this case we clearly bear some



responsibility because if our car hadn’t moved there wouldn’thave been a collision.”

Hilary Rowen, a partner at the insurance regulation practiceSedgwick LLP told the Guardian that in real world situations,both the driver and injured party will actually be incentivizedto blame the software which, if found to be guilty, will leave thedriver’s record clear and likely have a higher payout for theinjured party. That said, Rowen stated that autonomous carinsurance will still be cheaper than human-driven car insurancebecause “humans aren’t very good drivers”.203

Insurance opportunities for new business models

Naturally where challenges exist, so do opportunities. Ratherthan being up-in-arms at the turmoil that awaits, Lloyds ofLondon issued a forward-thinking report in 2014 on the comingage of autonomous vehicles and drones. “The advent ofautonomous cars could revolutionise the world of motorinsurance,” it stated. “Some might argue that if cars really dobecome crashless, there may not even be a need for motorinsurance. However, some element of risk would be retained bythe owner of a car. Damage or theft can still occur when a car isparked in a driveway, and for the present at least, cars withsemi-autonomous capabilities are more expensive than theirtraditional counterparts. It is possible that this risk could becomepart of a household contents policy coverage. The role of claimsanalysts and loss adjusters could change in line with the differentavailability of data on the frequency and nature of accidents. Insome ways it may make assessments easier because it would bepossible to see data such as what speeds vehicles were travellingat.”

In a presentation to the captives industry in December



2015, John Ellis, former Head of the Ford Developer Programat Ford, argued that since Google has stated it will self-insure itsautonomous car, the question arises will it subsequently becomea general insurance player? “These guys are here, they’re smart,sharp and they know software, they know analytics and forthem it is a data challenge to be solved. The products andservices we have sold and transacted in the past, and which wethought were real values, are merely the carcasses that carry thereal value – which is data.”204

The Lloyds report continues: “An accident caused byautonomous technology, however, would need extensivesoftware and hardware analysis expertise in order tounderstand how and why it occurred. As sensors andcomputers become more commonplace in cars, and somedriving responsibility is devolved to the car, an increase intelematics-based policies could be an option. Premiumscould be better matched to exposure rather than based onproxies, and in the event of accidents, the car’s ‘blackbox’could be examined. Whereas at present insurers usingtelematics devices incur the cost of their fitting, in the futurethe data may already be collected, making telematics a moreviable option… The current stance could also potentiallybe changed to assign more liability to manufacturers,especially if a point were reached whereby users were nolonger expected to even oversee the autonomous driving oftheir car. If such changes were to occur, motor insurancecould change substantially to be something more likeproduct liability insurance.”

The crux of the matter, concluded Lloyds, is that insurerswould need to know less about the users of a car, and moreabout different models of cars themselves.205



I’ve spent more than twelve years both running andconsulting insurance organisations; I am confident that theindustry will survive, albeit with a raft of new and innovativeplayers and products that will rock the boat of the incumbents.The industry will redefine what is insured – the car, the operatoror the service-provider. Already companies like Fairzekering inHolland, DirectLine and Autosaint in the UK, Metromile inCalifornia and even the giants Allstate, Aviva and Allianz nowoffer telematics-supported, usage-based car insurance policies –a first half-step toward universally insuring a vehicle’suser/operator, no longer the car itself. Insurers will certainlyalso focus more on business-interruption and liability insuranceat manufacturer and fleet level, as we will see shared vehiclesproduced by third parties, and operated by the likes of Googleand Apple (meaning a change from retail to corporateinsurance).

Notes

186. http://www.fleetnews.co.uk/fleet-management/case-studies/employees-had-a-negative-view-of-the-car-fleet

187. http://www.fleetnews.co.uk/fleet-management/case-studies/celesio-outsourcing-lets-us-focus-on-fleet-strategy

188. http://www.futurefleet.eu/motoring-guides/comprehensive-guide-to-business-car-van-leasing/

189. http://www.fleetnews.co.uk/fleet-management/case-studies/salary-sacrifice-has-capped-our-fleet-costs

190. http://www.autorentalnews.com/channel/rental-operations/article/story/2015/03/carsharing-state-of-the-market-and-growth-potential.aspx

191. file:///C:/Users/Tim/Documents/Book percent20 millionobilitypercent20revolution/Europcar percent20Groupe percent20-percent20EuropcarClub_UK.pdf

192. https://www.enterprise.co.uk/en/car-hire/long-term-car-hire.html



193. http://www.reviews.com/car-rental/long-term/194. http://www.europcar-group.com/en/communique-de-presse/europcar-

launches-an-innovative-e1-rental-offer-named-oneway-2/195. http://www.fleetnews.co.uk/news/fleet-industry-

news/2016/01/14/ubeeqo-launches-multimodal-booking-app196. http://www.leasingworld.co.uk/freepages/news-detail.php?ID=1507197. http://www.leasingworld.co.uk/freepages/news-detail.php?ID=1507198. http://www.ibtimes.com/avis-buys-zipcar-compete-better-against-

hertz-enterprise-has-carsharing-finally-come-995762199. http://www.theaa.com/motoring_advice/safety/autonomous-

emergency-braking.html200. http://www.economist.com/news/special-report/21576224-one-day-

every-car-may-come-invisible-chauffeur-look-no-hands201. https://www.2025ad.com/in-the-news/blog/driverless-cars-and-

liability/202. http://recode.net/2016/02/09/federal-government-will-treat-googles-

driverless-car-system-as-a-legal-driver/203. http://www.theguardian.com/technology/2016/feb/29/google-self-

driving-car-accident-california?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+main+NEW+H&utm_term=159420&subid=15417643&CMP=EMCNEWEML6619I2

204. http://www.assetfinanceinternational.com/index.php/countries/white-clarke-group-blog/wcg-blog/12729-data-extraction-leading-to-the-zero-dollar-car?utm_source=newsletter_9687&utm_medium=email&utm_campaign=video-a-zero-dollar-car-the-future-of-auto-finance

205. Lloyds (2014), Autonomous vehicles handing over control:opportunities and risks for insurance



Conclusion:How quickly willit happen?


“Driverless carscould represent themost fundamentalchange to transportsince the invention ofthe internalcombustion engine.”Former BritishChancellor, GeorgeOsborne


The traditional automakers – some years or perhaps evena decade behind the leaders – are beginning to expresstheir legacy, their predicament, and their plans. “Urban

traffic congestion already costs society billions of dollars inwasted fuel and productivity, and the problem is growingrapidly”, wrote a guest author for the World Economic Forum,Davos, 2016. “The UN predicts that, by 2050, the world’surban population will be 6.3 billion, up from 3.9 billion in2014… When vehicles are connected to smart highways andtraffic lights, then linked to highly accurate, real-time trafficupdates and navigation systems, we can significantly reducecongestion and urban commute times, in addition to furtherimproving vehicle safety.”206 These aren’t the words of anenvironmental revolutionary, or even Elon Musk. They onceagain come from Mary Barra, CEO of General Motors.

On the one hand, the status quo manufacturers have noincentive to promote the transformation too quickly (for adetailed explanation as to why, please see my first book, TheMobility Revolution). In a nutshell, a shared, autonomousfuture of mobility means fewer cars coming off the productionline. But the more forward thinking leaders recognise that thechange is coming whether they like it or not. They either change

149


with it or die off completely, leaving the road free for the likesof Uber, Zoox and BlaBlaCar to fill.

When it comes to the approaching mobility revolution,there are bullish optimists and cautious pessimists, but bothagree that it is happening. Both agree that autonomous, shared-ownership vehicles will become a familiar sight in our city roads.The point of difference is when. And there are crucial questionsthat, as long as they remain unanswered, will slow us down.

Political will (they or won’t they?)

Scott Le Vine, our trusted sparring partner, advises that how weget around in the future will ultimately come down to policydecisions. “If we wish to have reached a peak in automobility wecan do that”, he says, “but I don't think it’s a foregone conclusion.”

Maintaining the status quo is often in a politician’s bestinterests, and not always in an underhand way. The battlecurrently raging in town halls all over the world against Uber isa case in point. Traditional taxi services – some of which aresynonymous with a city’s image, whether it’s the yellow cabs ofNew York or Bogota, or the black cabs of London – employ alot of people, as do public transport operators. Both have tochange, yet both are also backed by powerful trade unions thataim to maintain a legacy of robust worker pay and protection.

It has become a key issue in elections as well. In early 2016,both leading candidates for the London Mayoral election cameout against Uber. During his successful campaign, Labour’s SadiqKhan proposed that he would crackdown on Uber, saying “theseprivate hire vehicles [can charge] far, far less than black taxis can.”The Independent newspaper immediately responded with anonline opinion piece saying that “black cab prices in London areextortionate… [the] fare price is cut by a third when travelling in



an Uber. The reason Uber is so popular with Londoners is that itis cheap, cheerful – and safe… black cabs remain an unaffordableluxury for Londoners. Threatening to take away the only taxiswhich actually fit into our personal finances is a political movethat might not go as ideally as Khan imagined it would.”207

While the debate rages on in London (although arguablythe consumer has already spoken), Uber has been banned orsubject to serious restrictions in Belgium, France, Germany,Italy and Spain. Former European Commissioner Neelie Kroescharacterized the court decision to ban Uber from Brussels as“crazy”, and clearly favouring the taxi cartels.208

Georgios Petropoulos, Visiting Fellow at the Europeaneconomic Think Tank Bruegel, blogged in response that,“Regulatory bodies around Europe were not ready for platformslike Uber. Regulators failed to react to the emergence ofridesharing online platforms and revise their price caprestrictions for taxis. Strong taxi lobbies have also made theauthorities’ work more difficult.” Petropoulos concluded, “Thefuture of urban transportation will rely heavily on technologiesthat facilitate information sharing and reduce asymmetries. It isup to regulatory bodies to certify that the associated efficiencygains will be maximized and distributed in a fair share amongall involved parties.”209

Such political interference, however, rubs both ways. Manyurban authorities are incentivising private developers to offerfewer and fewer parking spaces, almost literally squeezing theprivate car out of town centres – this naturally pushes residentsand small businesses toward a zero ownership model. In theLondon Borough of Southwark for example, a maximum of0.4 parking spaces per unit is permitted for residentialdevelopment in the central zone. All developments inSouthwark’s Controlled Parking Zones are required to be carfree. Similarly the London Borough of Merton has policies that

Conclusion: How Quickly Will It Happen? 151


encourage proposals for car-free residential development intown centres and areas where there is an operational controlledparking zone. The carsharing body Carplus comments that this“policy is now widely accepted” throughout London. “Bothcommunities and planners have embraced the introduction ofcar club stations as a key tool to redesigning the road space.”210

When it comes to autonomous vehicle technology, politicalsupport is easier to find. No minister in his or her right mindwould aim to campaign against life-saving technology that hasthe potential of creating jobs in innovation. Like his peers inthe UK, Germany and Sweden, Dutch Minister Schultz vanHaegen has pronounced: “The age of self-driving cars hasarrived. I want us as the Netherlands not only to be ready, butalso to be at the vanguard of this innovative developmentinternationally. Self-driving cars will make a positivecontribution to the flow of traffic and to the safety of our busyroad network. Moreover, self-driving cars are more economicalwhich is good for us as well as the environment.”211

The British Chancellor George Osborne even used his 2016budget speech – arguably the UK’s highest profile politicalmoment of the year – to pledge his support for driverless cars.At a time of “global uncertainty” he said he wanted Britain tobe a “world leader” in new technologies such as driverless cars.

“Driverless cars could represent the most fundamentalchange to transport since the invention of the internalcombustion engine”, said the Chancellor, personally vowing tocut the red tape necessary to “allow driverless cars to take to theroads by 2020”.212

Market and technology wobbles

Cyber security also remains a concern. In February 2016, Nissan



was forced to disable its smartphone app for drivers of its all-electric Leaf car after it was exposed as being vulnerable tohackers. Troy Hunt, a security researcher in Australia, found away to access the app, allowing him to control heating and airconditioning in individual vehicles as well as accessing journeyinformation. Speaking to the Financial Times, he raised theprospect that “a determined adversary could access othercomponents of the vehicle.”213 Hunt said the level of securityon the app was lower than he expected, and an employee in hisworkshop was able to gain access to a vehicle within 15 minutes.“The paradigm was never built in,” he said. He speculated thatthey “never even decided to build any security at all into this —this I found quite striking.”

Tesla’s celebrated automatic upgrades have similarly notbeen without fault. In February 2016 it was reported that Teslawas addressing “valid concerns” about its self-parking feature,Summon, which allowed owners to control the Tesla Model Sremotely using a key fob. The feature could have the car pullinto a garage and close the garage door, or open the garage doorand pull out, at one mile per hour. However, users could easilypress the wrong button. If the Tesla app closed while the carwas in motion, the car would also continue to move. ConsumerReports informed that despite supposed self-stopping features,“we tried out the Model S P85D with several large objects thata homeowner might leave in a driveway or on the floor of agarage—such as a duffel bag and bicycle—and the car failed tostop before hitting them.” Tesla ultimately responded to theseconcerns with a software upgrade that requires customers tokeep their finger pressed to the phone screen while Summon isin use. “As a beta feature, we continue to test Summon andcollect feedback from real-world user experience,” Tesla wrotein a statement to Consumer Reports.214

This balance between real world testing and safety is an



uncomfortable one and will remain so even as further iterationsof autonomous technology roll out. We have becomeaccustomed to upgrade glitches in our smartphones changingour preferred settings from time to time, but a two-ton carmoving erroneously is a truly dangerous prospect. The Nissanand Tesla experiences illustrate the need for tech start-ups tolearn from the car industry.

Others believe that something as simple as the weathermight derail driverless car technology. When Sam Abuelsamid,a senior analyst test driving a 2015 Kia Sedona equipped withadvanced autonomous driving systems was caught in a snowstorm, he posted a pictured of his subsequently stationary caron Facebook covered in snow, with the update: “We’re a lotfarther from general use self-driving cars than those in SiliconValley would like you to believe. The radar sensor in the frontand the rear camera are completely covered. While the snowwas falling, I had to turn off the parking assist because thefalling snow was triggering the ultrasonic sensors causing thesystem to beep continuously while there was nothing aroundthe vehicle.”215


“A world of self-driving vehicles maysound odd, butcoming generationswill consider the era ofcar ownership to havebeen muchstranger.”The Economist


Performance in heavy rain, fog and ice have also beenquestioned, as has Google’s preferred testing base in sunnyCalifornia. According to The Inquirer, Ford’s Lidar sensors havebeen found to identify snowflakes and raindrops as obstacles,which “returned false information to the autonomous system,giving the impression that precipitation should be avoided.”216

However, while press attention is naturally drawn to theseproblems, none have yet been insurmountable. Ford havedesigned an algorithm that allows a car to “see” falling rain. AsQuartz explains, “Ford’s autonomous cars rely on LiDAR sensorsthat emit short bursts of lasers as they drive along. The car piecestogether these laser bursts to create a high-resolution 3D map ofthe environment. The new algorithm allows the car to analysethose laser bursts and their subsequent echoes to figure outwhether they’re hitting raindrops or snowflakes.”217 The samesensors can sense landmarks and other points of interest on thehorizon, and when contrasted against the 3D map information,Ford is able to provide more accurate positioning than GPS.218

Then there is the financial hurdle. Can we afford this high-tech future? The answer lies in the scale of the potential market.According to research commissioned by the Transport SystemsCatapult in 2014, the Intelligent Mobility market is estimatedto grow from its current annual value of around £140 billion tojust over £900 billion a year by 2025; communications servicesand products – including collaborative vehicle to vehiclecommunications, and vehicle to infrastructure communications– will be worth £162 billion per year; network management –control systems required for the management of smart transportnetworks – a further £94 billion.219

KPMG too believe that the coming of autonomous vehiclescould deliver 320,000 jobs to the UK, with up to £51 billion ofeconomic benefits and 25,000 lives saved.220 The companiesand tendering authorities that navigate this space well will find



the investment necessary to proceed in changing the future ofmobility.

Corporate Mobility Breakthrough 2020

So why 2020? Social and cultural shifts take time – usuallymuch longer than technological ones. We see corporate mobilityat the forefront of the transition. New car technologies “filterdown from companies to ultimately lower and lower socio-economic groups,” notes Le Vine. “The potential here for safety,for reduced accidents by having constantly monitoring,unblinking eyes co-pilot, emergency braking… to yourcorporate risk manager, that’s an enormous benefit. We see aconvergence of factors that accelerate the process”.

A greater understanding of our immediate environment istaking place both at the individual level and within companies.In 2016 the UK government increased its national estimate ofannual deaths caused by air pollution from 29,000 to 40,000.This is driving public awareness, investment and politicalactivity like never before. Between now and 2020, we will seemayoral elections in many of the cities with greatest impact inEurope; a number of high-profile national governments shift aswell. Each will add air quality and public road safety – generally,the wellbeing of citizens in cities – to their platform. There willbe pledges for improved cycling infrastructure and publictransport will become becomes easier to use and pay for as itbecomes integrated within multi-transport payment systems.

By 2020, car clubs will no longer be seen as an ‘alternative’way of getting around, but instead a common sense approachthat complements walking, cycling and public transport. Theywill be fully integrated into the offerings of employers willingto attract millennials, who by 2020 will make up the majority



of the workforce. The aversion to today’s disruptive technologieswill have dissipated.

More fundamentally, by 2020, we will have shifted from alove for driving, to a disdain for the futility of traffic. TheEconomist puts it nicely: “In a driverless future, people willcome to wonder why they tolerated such a high rate of roaddeaths, and why they spent so much money on machines thatmostly sat unused. A world of self-driving vehicles may soundodd, but coming generations will consider the era of carownership to have been much stranger.”221

Last but not least, between now and 2020, the mostprogressive of fleet managers will have gone through one cycleof consulting their users on new mobility options. Theythemselves will have gone on a journey from initially managinggrey fleets, to outsourcing and leasing, ending with carsharing,mixed mode mobility and for commercial operators, overseeinga shared autonomous fleet. Just as cities, companies and staffwill have embraced a mobility breakthrough, their own rolewill have changed as well.

Notes

206. http://www.weforum.org/agenda/2016/01/the-next-revolution-in-the-car-industry

207. http://www.independent.co.uk/voices/sadiq-khan-and-zac-goldsmith-have-revealed-how-little-they-know-about-londoners-lives-by-coming-out-a6905221.html

208. http://bruegel.org/2016/02/uber-and-the-economic-impact-of-sharing-economy-platforms/#_ftn16

209. http://bruegel.org/2016/02/uber-and-the-economic-impact-of-sharing-economy-platforms/

210. http://www.carplus.org.uk/wp-content/uploads/2015/03/Car-clubs-in-property-developments-2015.pdf



211. https://www.government.nl/ministries/ministry-of-infrastructure-and-the-environment/news/2014/06/17/schultz-advocates-large-scale-testing-of-self-driving-cars-on-dutch-roads

212. http://www.telegraph.co.uk/news/politics/georgeosborne/12191589/Driverless-cars-will-take-to-Britains-motorways-for-the-first-time-next-year.html

213. http://www.ft.com/cms/s/0/d4a4018c-dbc2-11e5-a72f-1e7744c66818.html?siteedition=uk#axzz41eshnnfJ

214. http://uk.businessinsider.com/safety-concerns-prompt-tesla-to-upgrade-self-parking-2016-2

215. http://fortune.com/2015/02/02/autonomous-driving-bad-weather/216. http://www.theinquirer.net/inquirer/news/2450155/ford-driverless-car-

tech-has-snow-problem-with-bad-weather217. http://qz.com/637509/driverless-cars-have-a-new-way-to-navigate-in-

rain-or-snow/218. http://www.driverlesstransportation.com/fords-new-driverless-car-

algorithm-can-see-raindrops-snowflakes-12695219. https://ts.catapult.org.uk/market-breakdown220. http://www.cityam.com/212540/driverless-cars-could-create-320000-

uk-jobs-and-save-25000-lives221. http://worldif.economist.com/article/11/what-if-autonomous-vehicles-

rule-the-world-from-horseless-to-driverless



About the Authors

Lukas Neckermann is ManagingDirector at Neckermann StrategicAdvisors, a consultancy based inLondon with a focus on emergingnew mobility trends and theirstrategic impact. He has 20 years ofleadership experience in automotive,media, and financial services.

Neckermann StrategicAdvisors has a unique and relentlessfocus on the big-picture,

fundamental and strategic challenges of its clients – includingautomobile manufacturers, first-tier suppliers, captive and non-captive financial service and insurance companies, as well asstartups in the field of electric, autonomous, and sharedmobility.

Corporate Mobility Breakthrough 2020 is Lukas’s secondbook. His first book, The Mobility Revolution (Matador BusinessPress 2015) was met with excellent reviews from readers andmagazines, and solidified his position as a leading thinker andstrategist in the area of new mobility. He is a keynote speaker atmany corporate events and industry conferences.

Lukas is Growth Advisor to NEXT Future Mobility (astart-up company focused on autonomous shared transport)and an Advisor to Vayon Group, a first-tier supplier for low-carbon transport. He was part of the core team that launchedthe original OScar project (the open-source car project). He is aFellow of the Institute of Leadership and Management (ILM),Adjunct Instructor at New York University, and has lecturedand taught courses to executives from over 40 countries. He

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holds a Bachelor’s Degree in Science and Technology Studiesfrom Cornell University, and an MBA from New YorkUniversity’s Stern School of Business.

Tim Smedley is a sustainability, work and smart cities journalistbased in the UK. After writing for business magazines for muchof the 2000s, his first feature article for The Guardian in 2010looked at the future of cities: could the newly-built smart citiessuch as Masdar, Abu Dhabi, create a blueprint forenvironmentally and socially responsible urban living? He hasbeen writing about sustainable innovation for The Guardianand the Financial Times ever since. He also continues to writeabout business, with a particular focus on diversity and corporateresponsibility.

In ten years as a Londoner, he quickly ditched his own car(a third or fourth-hand Ford Fiesta) in favour of publictransport, and keenly follows the future of mobility debate.



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