Individual Mobility: Challenges ahead

The age of individual mobility in urban areas started around the same time as public transportation, in 1860. At the time railways were growing rapidly. This – and other factors – led cities to expand significantly, generating a need for transportation to cover the increasing inner-city distances (steam-powered trains were too inefficient and dirty for this). Until electric tramways arrived in the 1880s, urban transportation came in the form of horse-drawn tramways or other means of transport that involved horses. Owning a horse, however, was restricted to the upper class (it was rather costly and generated negative externalities in the form of manure). All others had to use (limited) public transportation or walk. People thus had a very limited radius of activity (similar to what Covid-confinement of 2020/21). Within half a century, however, this would change. The change was driven by bicycles, sewing machines – and the great liberator of individual mobility, the automobile.

In 1860 Pierre and Ernest Micheux started to build bicycles in Paris that were more advanced than the push-wheels that had been known since the late 18th century. By the end of the decade father and son had sold several thousand of their bicycles but these early bikes were inefficient. In 1869 Eugene Meyer of Paris developed the first “penny farthing” or “high wheel” bicycle with spokes. The large front wheel gave more meters per pedal stroke and other companies took notice, leading to the appearance of bicycle companies in the UK and the USA. By 1875 estimates put the number of “penny-farthings” in the UK at 50,000 while a decade later the number had reached almost half a million. Albert Pope brought the bicycle to the USA and had it manufactured at a sewing machine factory. By then the USA has developed precision tools and precision manufacturing, leading to an increase of bicycle quality while lowering their costs. Pope soon produced thousands of bicycles every month. Back in Europe John Kemp Starley of the Coventry bicycle cluster developed the first modern type of bicycle during the 1880s (it had a chain and a front tire that was almost the same size as the rear tire). This new type of bicycle was called the “safety” bike (high bikes caused many injuries).  By 1887 Pope had manufactured a quarter of a million bikes. Demand for bike grew even further when in 1888 by John Boyd Dunlop′s used inflated rubber tires on his son′s tripod. This made bikes more comfortable to drive, giving women the opportunity to join the scene, giving rise to a second, even larger boom. By the late 1890s the USA had become the global champion of the industry, with sales of more than 1.2 million bicycles per year. Bicycles were the “iPhone” of the late 19th century, giving individual mobility to the upper middle class and then to the majority of society.

The case of the bicycle is interesting because it reveals the need for individual mobility, available to all. Bicycles covered that need, for the first time in history giving the masses an affordable means to extend their range of “at will” mobility beyond walking distance. At the same time a new industry was born and all stakeholders involved benefited from the arrangement. Many of the original bicycle companies would join a new industry, created by Carl Benz in 1886 in Germany: the automotive industry. After experiencing the liberty of riding a bicycle, people wanted to extend their range even further. And just like with bicycles before, the first to adopt the new mode of transport were the well-to-do. With the arrival of Henry Ford′s mass production system in 1913, however, people moved from bicycle to Model T and the age of individual mass mobility was born.

A century later the need for individual mobility persists. Today, however, many more modes of transportation are available, ranging from bicycles to e-bicycles, e-scooters, monowheels, motorcycles, cars, public transportation and others. The same applies to business models, where we see a continuum ranging from buying the vehicle to ride hailing or free float car sharing. Within this broad landscape of technology and business models we are looking to solve problems that are created by urbanization and its collaterals in the form of greenhouse gas (GHG) emissions and traffic congestion. We also see an opportunity to re-think not only mobility services themselves, but the whole value chain behind this service concept, particularly in our effort to reduce GHG emissions.

Current solution approaches focus on urban settings and forms of shared mobility. Many pilot projects from the Baltics to Western Europe, Australia and other regions are ongoing. So far, however, no "dominant design" has emerged: we are facing a very complex, multi-dimensional problem.

Two examples may illustrate the complexity: for large cities, cars will continue to be an important element in the mobility mix. At the same we know that the current system of using cars in cities is suboptimal: most of the time the asset is not used and blocks space. So a better approach would be to share the vehicles. But so far the vast majority of car sharing companies have not been profitable (surprisingly the fact that they are not seems to boost their market value – reminiscent of the year 2000). The problem is rooted in the cost of the asset, which in turn is explained by the significant investments OEMs have to make in new factories (easily € 1 billion) or tooling for a new model (depending on brand several hundred million €). This installs a lower bound below which OEMs cannot price their products.

The introduction of highly standardized electric vehicles for the urban setting, however, may change this. Urban vehicles don’t need to operate at high speed, they should be small to save space and for the short trip from city center to the office park design is less important than good connectivity and seamless integration of mobile gadgets. At the 2019 Geneva motor show Citroen showed its Ami One, a car that combines these elements. It is only a matter of time until an OEM or Asian contract manufacturer will take the next step and produce a small urban electric shared and connected vehicle on a fully automated production line. This will significantly reduce the cost of the car and has a high disruptive potential, similar to what happened in 1913/1914 at Highland Park.

While the urban mobility challenge is studied in great depth, the topic of innovating mobility in rural settings is less present in the discussion. This is surprising, because more than 40% of the global population lives outside of cites – and more than 80% of distances covered by automobiles are driven there. Shared mobility solutions in these settings are difficult to imagine, as population density is below the necessary threshold for it to make sense. Level 5 autonomous vehicles may alleviate the problem somewhat, but even they are of little help in sparsely populated regions like Montana or Patagonia – or even Extremadura. It therefore seems very likely that urban mobility solutions will differ from those in rural settings.

The challenges listed above take on an even more complex nature when we include the infrastructural needs of electric mobility. Different, very powerful players, are part of this new ecosystem: the automotive industry, utilities and grid operators. Only if they find a way to collaborate will electromobility be able to live up to the promise of seamless mobility without range anxiety and reduced emissions (the topic of recycling and recuperating will hopefully be solved). The technological challenges are significant – for example, managing bi-directional charging on a grand scale, with millions of cars and their battery packs of different sizes and chemistries calls for advanced algorithms and advanced IoT technology. The collaboration between these players is also heavily influenced by the regulator – for example, it is difficult to understand why in 2021 Spain, a country famous for its sunshine, generates less photovoltaic energy than Germany (more famous for beer than sunshine). The explanation might have to do with differing regulatory settings. A Europe-wide approach would be a good approach – if it can be done for the automotive industry (emission goals), why not for photovoltaic energy?

Many questions remain. But this explains why many of the best and brightest are currently gravitating towards the mobility sector in general and the automotive industry in particular: it has never been as interesting before, ever. We are entering a new world of mobility.

 If the topic interests you, perhaps IESE Mobility, a web conference on May 5/6 2021, is worth a look (details below): we certainly would love to have you join the discussion.

Best regards & stay healthy,

Marc Sachon

IESE Mobility - Program:

https://industrymeetings.iese.edu/meeting/35-mobility-1/#program (English)

https://industrymeetings.iese.edu/es/meeting/35-mobility-1/#program (Spanish)

IESE Mobility - Web::

https://industrymeetings.iese.edu/meeting/35-mobility-1/ (English)

https://industrymeetings.iese.edu/es/meeting/35-mobility-1/ Spanish)