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Collaboration is key to maintaining urban transport efficiency as cities grow

The economic impact of congestion will continue to increase if transport systems are not revitalised through collaborative efforts between governments and technology companies

As populations grow and migration increases, the future efficiency of urban transport systems across the globe will depend on collaboration as much as technological innovation.

According to Swarna Ramanathan, an associate partner at McKinsey, cities are projected to contain 60% of the global population and account for 65% of all economic growth by 2030.

This is expected to place a massive strain on already-congested urban transport systems, which are currently causing billions to be lost in GDP each year.

Between Britain, Germany and the United States, for example, the economic impact of congestion totalled $416bn in 2017 alone, or $975 per person, according to data collected by software and data company INRIX.

“We see more and more the need to take a ‘system-level’ approach, not just a technology or market-focused approach,” said Ramanathan, who outlined four major mobility trends: a shift to electric vehicles, connectivity between different modes of transportation, autonomous driving and shared mobility.

Presenting on the evolution of urban mobility in Asia at the recent UK Asia Tech Powerhouse conference, which was hosted at Royal Albert Dock, Ramanathan said an integrated approach is needed to properly understand the impact of these trends, adding that the piecemeal introduction of any new technologies or systems will lead to even more problems:

“The technology is out there but a coordinated plan to introduce it is needed. We found that if you just introduce, for example, shared mobility and autonomous vehicles, we actually see an increase in things like congestion, and that has the same impact everywhere.”

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  • Around the world, smart city programmes combine IT with internet-connected devices – from waste management to smart grids – which enhances municipality management.
  • The Department for Transport (DfT) has published its strategy for the future of urban mobility, including priorities for 2019, the launch of a regulatory review and a £90m transport innovation fund.
  • The Department for Transport (DfT) has set out an action plan to increase its spend with small and medium-sized enterprises (SMEs) to 33% by 2022, and to support small and innovative companies through grants.

Therefore, collaboration between the public and private sector will be key to understanding the issues around changing urban mobility and how it should be implemented.

“Understanding what the key political issues driving these urban areas are, and thinking about how these can be solved, and then building on strategies to help fix those problems is vital. It’s not about just pumping solutions into markets,” said Reuben Dass, assistant manager of KPMG’s mobility team, who was speaking along with others quoted on a panel about future-proofing cities.

However, he added that public and private sector partnerships often lead to what he calls action paralysis. “No one wants to make the first move and set a stake in the ground about what direction to travel in,” he said.

Isabel Dedring, global transport leader at Arup and former deputy mayor of London, said it’s important for senior leaders from across the public and private sector to forge personal connections with one another to deal with action paralysis.

“That’s how electric buses and taxis came in at scale, because these personal relationships were formed and these people came together and decided to work together to deliver something, underpinned by some nice proactive policy making,” she said.

“You need a ‘burning platform’ of some type. You need an issue that is relevant and then those individuals need to come together and work jointly, one team around a table, as opposed to sending stuff back and forth or shouting at each other in the newspapers.”

Material limits

According to Ramanathan and the panelists, a lack of infrastructure is another major barrier preventing these changes. “If you look at infrastructure and autonomous driving, they go together hand in hand,” she said. “You cannot have autonomous driving without a certain level of infrastructure, and it’s the same for electric vehicles.”

This was corroborated by Robert Hamilton, director of utilities and infrastructure at Power Sonic Corporation, which is currently developing electric vehicle infrastructure using renewable energy.

“There is simply not enough power going to all these EV charging points,” he said. “We’re offering a different solution using green tech, solar and wind to charge cars, which is happening in UK now – there is no point having a car with a 50 mile radius.”

Ramanathan points to the case of the China, which is leading the world in electric vehicle penetration:

“Even in a base case, we expect about 35% of the new car sales to be electric cars, and in a breakthrough case, which is looking more and more likely as we track these projections in real time, that at least 50% of the new cars sold in China could be electric vehicles – that’s millions and millions of cars,” she said.

Now, Ramanathan said the Chinese government is investing heavily in electric vehicle infrastructure to meet this growing demand.

Having divided the nation into three zones, the Chinese government is expecting 2.5 million charging points to be installed in zone one alone by 2020, which will serve a projected 2.7 million extra electric cars on the road.

Wealth and spending

However, not all urban areas will have the same social conditions, affecting which technologies can actually be adopted in that locality, said Ramanathan.

For example, high density areas with high GDP means that, generally, people will have the economic ability to adopt new technologies like autonomous cars when the infrastructure is ready, whereas developing areas with high density but low GDP will be more likely to adopt electric vehicles or ride sharing as cheaper, less infrastructure-intensive alternatives.

“Another area is the developed suburban area; cities which are much more in a sprawl like Melbourne or Huston but have good GDP. Here, we think car ownership will still prevail because people have the luxury of space to own a car and the distances prohibit them from not having one.”

Dass added that while innovation, technology and mobility have the ability to increase social inclusion, the investments being made at the moment are not necessarily focused on that goal.

Looking at the British government’s spending on transport over the last ten years bears these imbalances out. In August 2018, for example, the Institute for Public Policy Research North found that Londoners enjoyed an annual average of £708 of transport spending per person, while just £289 was spent for each person in the north of England.

According to Dedring, however, social equity and inclusion has taken centre stage since Trump and Brexit. “Suddenly everyone has woken up to the idea that maybe we need to care about people who are less privileged, who have less access to the corridors of power, whereas before it was more like ‘I need to be seen to be doing something’.

“It’s a fantastic opportunity for the tech industry, for the new mobility industry, to not just come up with a product, but articulate how it could be implemented and rolled out in a way that specifically tackles these social issues, which isn’t just saying ‘oh, we can share the car, so it must be good for people with less money’ – well, not if it’s not going to the places where those people live, and not if it’s still too expensive,” she said.

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