Solving the Chicken-and-Egg with Driverless Cars

By Graham Jarvis

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12th November 2020

KPMG claims that autonomous vehicles are being held back by the need for infrastructure to support them.

The consultancy and analyst firm’s Autonomous Vehicle Readiness index (AVRI) ranks the UK as the 9^th most advanced connected and autonomous vehicle market in the world.  The country is, nevertheless, within the top five countries for cyber-security. The 2020 report also says: “The UK retains its second place on the Policy and Legislation pillar, with the government continuing to make substantial progress in this area over the past year.

“Building on 2018’s Automated and Electric Vehicles Act, UK Government launched its second consultation paper in a three-year review of the UK’s regulatory framework for automated vehicles. This explores AV regulation for public service vehicles, including how unstaffed minibuses or taxis would be kept safe and clean for passengers. Furthermore, in support of its Future of Transport Regulatory Review, UK Government has recently launched a wide-ranging consultation considering (amongst other areas) flexible bus services, micro-mobility vehicles such as electric scooters and mobility as a service (MaaS).”

UK leadership position

Fleet News says the findings point to the UK’s leadership position around policy and security measures, “but it says physical and digital infrastructure is needed to make sure it doesn’t get pushed out of the top 10. Compared to last year’s ranking, the UK has slipped two places, with South Korea and the United Arab Emirates inching ahead owing to planned infrastructure investments”.

However, an article in Automotive World headlines: ‘Autonomous vehicles must prove their worth before cities adapt’. Even without the infrastructure to support them, there is an expectation that connected and autonomous vehicles (CAVs) must prove themselves without the necessary investment in required infrastructure to support them. This is creating a chicken-and-egg situation and the need is clear for this conundrum to be resolved to improve the prospect of us all seeing fully AVs on our roads in years to come.

Infrastructure investment

To meet this end, it is certainly true that more investment in cities is needed to put in place the infrastructure that CAVs require to operate safely and efficiently.  Ben Foulser, associate director in our Transport Advisory Practice at KPMG adds that there is a need to separate the C and A from the acronym, CAV. He said: “CAVS can talk among each other, however, that in itself is not going to deliver the benefits we need to maximize the capacity and the road network to develop safety benefits as well as a whole range of others such as fuel efficiencies.”

In his opinion the challenge emanates from determining how the new infrastructure is going to be paid for. “We have yet to see business models that show how it is going to be funded and financed,” he explains. He believes that the business models have to come first from the C side of the connect vehicle equation. However, this doesn’t mean that the vehicles themselves don’t currently have sufficient capabilities at present. Many connected vehicles are rolling off the production line now with connectivity in place.

Missing equation 

So, what is often missing? He clarifies the need to have business cases to leverage the capabilities of the vehicles, and the prerequisite to unlock funding for the infrastructure investment: “Road authorities need to start to be more progressive in terms of their engagement with the private sector to explore the business models. We are starting to see the emergence of some business models and new solutions in this space, including innovative services. A good example is Transport for West Midlands with its testbed and Connected Vehicle Exchange (ConVEx), which is effectively putting in place a data exchange platform to start exploring business models. We need to see this a lot more, and to expand these out across the roads network.

“Once we see the cash-saving and/or wider economic benefits there will be a case for wider investment in infrastructure. The other challenge we have is: what technology to use? The debate between 5G and equivalents, or ITS G5 remains a perennial issue. There’s propensity in Europe for ITS G5; however, 5G is likely set to win the race. It has a broader capability and feature set than ITS G5, supporting a larger number of use cases.”

Proving CAVS’ worth

Despite the chicken-and-egg conundrum, Foulser is confident that autonomous vehicles will prove their worth without the appropriate infrastructure being in place across the country. “The majority of automotive manufacturers are building autonomous vehicles to be self-sufficient,” he explains. However, by investing in and building the right infrastructure to support CAVs, wider benefits could emerge. Meanwhile, there is a need for the vehicles to operate without any infrastructure and this includes being able to drive with safety, accessibility and, ultimately, reduced costs per mile.

He highlights that these factors are particularly important in freight and logistics. He adds: “It’s when you introduce communications infrastructure that you can start exploding those benefits to include significantly enhanced traffic management, and to enable mobility-as-a-service.” Furthermore, he emphatically believes the conundrum can be resolved by getting the business models agreed for the development of CAVs and city infrastructure, or even rural infrastructure, and part of this discussion is about whether the connectivity will be 5G or G5.

Private finance role

In terms of infrastructure development, he feels there is a role for private finance to play: “This isn’t going to be solely funded by government and this is a long-term investment opportunity for private finance which should be actively explored by government. This goes back to having established business models. A good example would be roads maintenance. If you can collect data from CAVs on road conditions you can start transitioning to predict and prevent, which should be less expensive. This cost-saving is commercializable. If authorities could save money on road maintenance, this could pay the finance costs of private finance, creating a win-win situation.”

From his perspective, Transport for West Midlands is a key case study in the UK. The project called, ‘Midlands Future Mobility’, comprises of 185 miles of roads in Coventry, Birmingham, Solihull and the wider region for the trialing of connected and autonomous vehicles.  It is also involves companies such as Zenzic, and it is using 5G CAV testbeds.

For the purposes of the project, a Future Transport Zone has also been created in Birmingham and Coventry. He reveals that the Zone is “the first to receive government funding from the Transforming Cities Fund, and this will be used to trial a number of different use cases”. Beyond this, Foulser concludes that the connected vehicle aspect of CAVs will be: “Inherently more difficult because of the low density of vehicles to make the business models work.”

Rural autonomous transport

Ironically, he suggests that the AV side of CAVs might be easier. For example, a small number of AVs could provide cost-effective transport in rural areas. So, rural areas shouldn’t be neglected. Rural accessibility is a key policy area for the Department for Transport. There will therefore need to be some constant analysis of rural autonomous demand response transport. Innovation trials and financing initiatives are underway. HITRANS – the transport authority in Scotland, for example, has successfully bid for funding.

Transport Scotland’s website says the funding is for a “pilot that will offer a regional, multi-modal journey planning system using real-time data, offering an account-based payment system that is available to all users for all participating mobility options.” Thankfully, there are signs the current chicken and egg equation soon be resolved in one way or another through pilot schemes and funding to support these innovation trials, and yet there is still a need to agree how it all works in practice.