The Road to Less Traffic

It’s a great time to be working in the business of transportation generally and the automotive industry in particular. There are more cars being made and sold than ever before. There are more human beings driving for the first time every day. Which means the problems of managing and maintaining the increasing number of vehicles on limited available roadways is growing – creating new jobs in transportation.

The reality of these challenges was brought home to me yesterday while attending the Automotive Forum in Lille, France, where the taxi protest against the UberPop alternative taxi service was being felt as it was in Paris and other cities across France. On some days you get in your car or board your train or bus and don’t think twice about transportation challenges. Yesterday, in France, was not one of those days.

As thousands of commuters stood in motionless Metro and suburban trains (as I did) or sat in traffic jams, the reality of too many people trying to get to too many places simultaneously on a daily basis was vividly brought to the forefront. At the Lille conference executives from Autolib and Bla Bla Car discussed the merits of their car sharing and ride sharing services – both of which are spreading beyond France.  Autolib is launching in London and Indianapolis.  Bla Bla Car is up and running in 19 countries with a total of 20M members.

Both Autolib and Bla Bla Car claim to be contributing to a reduction in the volume of cars on the road. Uber, too, claims to be negatively impacting car purchases.

The reality is that Autolib, Bla Bla Car and other emerging transportation network companies (TNCs) are actually solving a different problem. These companies are improving the efficiency of vehicle transportation - while fostering the use of cars to solve transportation problems.

An executive from the European Intermodal Association speaking at the event referred to a McKinsey study which noted that the average car is only used 4% of the time, that only 1% of a vehicle’s energy is used to transport people and that only 5% of highways are used even at maximum efficiency. In other words, low levels of vehicle use efficiency currently translate into excessive traffic and emissions, to say nothing of the rising toll of highway fatalities.

Efficiency is a powerful motivator of innovation. One need look no further than Elon Musk’s efforts at Tesla to appreciate the value and power of an individual and an organization bent on improving energy efficiency in the transportation sector and its potential to change society.

But improving efficiency in and of itself will not solve the challenges facing the transportation sector. The only two solutions that are proven winners – other than rewarding and enabling at-home work – are usage-based insurance and road charging.

Usage-based insurance leverages vehicle connectivity for a carrot-and-stick solution to excessive and poor driving behavior. Studies have reliably demonstrated that UBI participants routinely and immediately drive less thereby reducing emissions and traffic congestion. The use of road charging is intended to produce a similar outcome especially in conjunction with carpooling.

New companies and new opportunities are emerging in the transportation sector as TNCs multiply along with UBI programs and road charging – as in the case of emerging programs in Portland, Oregon and Northern California in the U.S. But TNCs are mainly targeted at enhancing the efficiency of the current infrastructure, not reducing the volume of vehicle purchases.  UBI and road charging will also improve transportation efficiency by making room for more cars on existing roadways.

None of these initiatives will reduce the demand for new cars. Not only are emerging markets contributing to the surge in demand for new cars, but the existing car park in developed countries is aging and governments will find it in their interest to remove less efficient and “dirtier” older cars from the road – further stimulating demand for new cars.

Interest in solving transportation problems is "driving" innovation with the proliferation of new types of vehicles with new types of powertrains.  Even electric bicycles are rapidly emerging as a powerful new transportation option.  But, as yet, no one has found a replacement for the car - which means, for many, transportation will remain a daily adventure far into the future.