Public-private JVs point the way for connected cars

Cities need to make themselves more liveable to attract residents and, especially, tax-paying businesses. A primary goal, then, for municipal and regional authorities is to reduce road congestion and fossil-fuel pollution. To accomplish those ends, they need the technology being developed in the private sector to find alternative mobility solutions to replace the private automobile. On the other hand, as car sales start to slow, carmakers need the public authorities as paying customers.

“The public-private interdependence is becoming very, very clear,” says Lukas Neckermann, managing director of Neckermann Strategic Advisors and author of the book Smart Cities, Smart Mobility: Transforming the Way We Live and Work.“One can’t operate without the other and certainly can’t operate against the other. Any time Uber has had a problem with a city, it’s only because they tried to operate against the city, rather than with the city.”

Jan Hellåker, programme director at Drive Sweden, a strategic innovation project launched by the Swedish government, says that legacy car manufacturers wishing to remain viable need to adapt to the new mobility ecosystem and, for that, they need to regard cities and public transport authorities as their future customers. “Almost all car-OEMs are pursuing a dual path right now,” he explains, “Where the one path is to just keep making their products more advanced and self-driving, whereas in most cases they have also established their own mobility services brands. It may well be that those [two streams] are not fully coordinated. I think they need to have some competition between them internally. Clearly, the legacy brands to the extent they want to become mobility service providers, need to talk with public authorities of all kinds. It’s natural that this is easier in their home markets.”

In countries without domestic carmakers that situation is reversed. “As they want to advance new mobility solutions, progressive countries around the world look to establish relations with foreign vehicle manufacturers,” he adds. “We see that happening in Singapore and Dubai, for example, often with substantial financial incentives.”

The Smarter Mobility competence hub at the Helsinki Metropolia University of Applied Sciences has been at the forefront of new mobility research inspired by the needs of public transport authorities. Harri Santamala, Smarter Mobility’s project director, says that it is not always the public authorities who define the project. “We do have a lot of projects with Helsinki’s offices working with or indirectly with the public transport authority but, sometimes, the focus group could be end users, for example.”

A recent, much-publicised two-year project overseen by Santamala involved running autonomous shuttles on public roads. Shuttles appear to be the entry transport mode for European cities embarking on the path to a new transport ecosystem. “It seems that almost every big city in Europe has its own shuttle project,” Santamala says. “The mobility service they promise to do, of which they are not fully capable yet, but close to it, is something very compelling for cities: to introduce a new mode in public transportation, for the first and last mile, with very cost-efficient technology. I suppose they also see it as a first step towards automation internally. Last mile as a concept means that you are driving in an area that is not that big, and the speeds are lower, because the traveling distances are not that long.”

For its own shuttle project, he explains, the university issued a request for tender for the vehicles, and selected the French company EasyMile. “We had a lot of companies interested,” he says. “This was the first open road experiment for [EasyMile], so they learned a lot about their technology and they got good visibility in this area.”Countries, such as Finland, that have no domestic vehicle manufacturer have no choice but to acquire research vehicles via public procurement.

Some observers see a potential danger in the growing collaboration between public authorities and private mobility service providers: the possible absence of commercial competition. “I hope we don’t have a monopoly of public transport from one selected partner. It should be the customer who will decide,” says Santamala.

According to MaaS Global founder and CEO Sampo Hietanen:“The biggest problem for us is that in some city the public and private players get together to make mobility as a service happen for the citizens. It would be a public project with a tender. That’s a sure way to kill the whole thing – a project where the public authority chooses one winner. It’s a waste of tax money to try to compete against car ownership with a one-provider solution. Think of it from the end user’s perspective. He will have one provider for city mobility against the freedom of choice that car ownership provides. It’s never going to work. This public and private getting together might even slow things down if it’s done the wrong way. The consumer must have a choice or it will not work.”

As cities and regions build up their new mobility systems and deepen their collaboration with carmakers and mobility service providers, it is inevitable that the question of who runs the mobility network will be raised.Lidia Fabian, senior communications manager at the Berlin mobility start-up door2door, says that, for now at least, it is best to let the city manage the mobility. “The reason we don’t operate these [mobility] services ourselves is because we understood that cities want to do that themselves,” she explains. “And the efficiency and scalability of new mobility services is much higher when the city is the decision-maker about mobility in the city. As a concrete example, when Uber started operating in Manhattan there were suddenly 50,000 more cars in the streets than before. Yes, there was a new mobility service, but it didn’t help much. Statistics have shown that when you integrate these services in the public transport system, it reduces the number of cars in the street. Ideally, the city would have the opportunity to integrate all other mobility services on our platform.”

Helsinki Metropolia University’s Santamala of has a different view: “The question is,” he says, “who can get big enough to attract a large number of people, the way Uber did. Uber started from zero. The car-OEMs are not starting from zero. It is up to whoever can get past the critical mass first. Because the more customers they have, the better deals they will get from the mobility providers. The question is, who can scale up.”


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