- External factors that impact the development of new technologies, including land use patterns, public policy settings, and demographics; and
- Economic factors that impact the uptake of different transport technologies, including economies of density, fixed/variable costs, and complements versus substitutes.
This post will now consider some emerging transport technologies in more detail. These technologies seem likely to make us much better off in the next couple of years, and are worth getting cautiously excited about.
1. Information technologies – The brain in the palm of your hand
Hypothesis #1: Improvements in IT technology will make it easier for people to access the information they need to make good choices. When presented with this information, people will travel by the best transport mode for that particular journey, rather than the one that is easiest. This will reduce the dominant role played by private vehicles in our current transport system, especially in denser cities where a variety of transport options are available. By reducing the complexity and cost of getting around, these IT technologies will also increase the attractiveness of dense cities as places to live.
Some of you may be reading this post on your phone. On the same phone you may also have access to apps such as Google Maps, Uber, AirBnB, and Tinder. With these apps you can check bus/train timetables, book a (cheap) taxi, find a cool place to stay, and arrange a hot date. They help you access the goods and services you want in an efficient manner.
The long-run impact of these kinds of technologies cannot be overstated. In barely 20 years, for example, online dating has completely transformed how we meet the people we love, as illustrated in the figure below (source). Of course, more traditional forms of romantic encounters remain important, but they are *less* important than they were previously. In this way IT has expanded our options and enabled us to do something we were already doing, just more effectively. They function at their best in areas of high density.
NB: 1) This data only goes up to 2009, i.e. it excludes the more recent advent of Tinder and 2) the % of same-sex couples who meet via online dating is higher still.
Google Maps, Tinder, and Uber are old (albeit good) news. What’s the next big transport IT to emerge?
I think it has to be ride-sharing. Uber themselves are operating a shared version of their service in some cities. And they’re not the only ones: The graph below, for example, shows the growth of “Bla bla car” in Europe from 2009 to 2014. Year-on-year growth of 100-200% has enabled Bla bla car to raise hundreds of millions in venture capital to fund their ongoing expansion.
Bla Bla car works as follows: 1) Go to a website; 2) Enter where you are travelling to/from, and 3) you get a list of people who are driving that journey, their time of departure, and the cost. It costs about 5 Euro to get from my house in Amsterdam to Rotterdam, which is a 75km journey at 6 Euro *cents* per km, i.e. cheap as chips. Many drivers are happy to carry pets, and some are commuting regularly, so you can negotiate arrangements for a more regular journey.
Now there’s been lots of (failed) attempts at building ride-share platforms in the past, so why am I so confident that something like Uber’s shared service or Bla bla car will take off soon? Two main factors make me think things are different now. The first is psychological: In the last decade or so, a proliferation in online platforms, such as TradeMe/EBay, Uber, Tinder, and AirBnb, has helped people become accustomed to procuring goods and services in this way. The second is market size: Most people in countries like NZ now have smart phones, providing economies of density in supply/demand (as discussed in last week’s post).
It is not just ride-share: All manner of transport services stand to benefit from turbo-charged IT.
For example, some may think that using different apps for different transport modes is confusing/complicated, and you’d be right. That’s why some clever folks at a Melbourne-based start-up have created Rome2Rio, which is a (gorgeous) ***multi-modal*** transport planner. Rome2Rio searches (mono-modal) transport engines to find the best options for getting you from A to B, whether it be short and long distance by car, plane, boat, or train. For example, below is a possible itinerary to get from my street in Amsterdam to Crete, including details on connections, prices, and schedules.
It is making it easy to travel anywhere, anytime, by any transport mode. On the demand side, by simplifying things people will be able to choose the journey that is best for them, e.g. train from A to B and ride-share from B to C, rather than simply doing what’s easiest, e.g. driving from A to C. On the supply-side, such things are likely to result in increased competition and ultimately see more mileage coming from fewer cars, trains, buses and airplanes.
Of course if/when driverless cars become available then they will seamlessly plug into these kinds of IT platforms.
However, as was discussed in a previous post, if driverless cars are going to be a cost-effective way for everyday people to travel, rather than just a cheaper form of taxi services used for occasional trips, then they will need to carry multiple passengers, just like a bus does currently. And to carry multiple passengers efficiently, then driverless vehicles are subject to the same laws of geometry as public transport: They will tend to travel most frequently along the busiest corridors of demand. Of course they could divert to serve just you, but that’s going to cost you a lot more.
Which brings me nicely onto the next topic …
2. The driverless revolution – How it will turbo-charge PT
Hypothesis #2: The revolution in driverless technology will be applied first and foremost to PT. Cost-efficiencies associated with driverless technology will slash OPEX costs and increase PT’s relative cost-effectiveness compared to all other modes of transport, with the exception of taxis. The latter, however, will tend to complement use of PT in denser areas.
First some background: Drivers are expensive. They account for approximately half the cost of operating a taxi and about 30-40% of the cost of operating PT. So if you remove the need for a driver, then the costs of delivering taxi and mass transit services reduce significantly. In contrast, when you’re talking about private cars the impact of driverless technology on costs is smaller, because the passenger (who was the driver) still has to travel regardless, i.e. the driver’s time is (usually) not “saved”.
Driverless technology may reduce the costs of providing PT services to the point they no longer need OPEX subsidies.
Compared to private vehicles, implementing driverless techology in mass transit systems is relatively easy. PT operates along fixed routes and to fixed schedules. Driverless technology is particularly easy to implement in separated rail systems, which is why so many new metro rail systems are now using it. But it’s not just rail that will benefit from driverless technology, Perth, for example, is currently trialing driverless buses, such as that illustrated below (source).
Meanwhile, slightly further a field one are the runaway success stories of driverless metro systems, which have been constructed in places such as Copenhagen and Vancouver. The success of these systems, which achieve farebox recovery rates around 150%, has encouraged many other cities to follow suit. Milan, for example, has recently opened a driverless metro as illustrated below (source).
Driverless PT, when combined with other initiatives such as congestion charging and accurate parking pricing, raises the prospect that PT services could operate profitably and thereby generate funds to reinvest in more services or infrastructure.
Could driverless PT technologies be deployed in the Auckland context in the near future?
I think the answer is yes. Aside from the rail network perhaps the first candidate for the deployment of driverless technology is the Northern Busway. Don’t get me wrong, I love the Northern Busway – it’s a great service and it was cost-effective to build and operate. The Northern Busway is a key part of Auckland’s successful PT story. And it has scope to grow, with things like double-deckers and more efficient ticketing systems. However, if AC and AT are to achieve their transport objectives, i.e. patronage keeps growing for several decades, then at some point a higher capacity PT technology may be needed.
Driverless rail is one possible solution.
Driverless PT will also put an end to strikes and frequency/span issues that have periodically plagued PT network for decades. I suspect driverless technology may be the circuit-breaker than enables high-quality PT to operate profitably all-day, every-day. No more Sunday service levels, no more leaving the party early to run for the last bus or train.
At this point some may protest that PT still suffers from the “last leg” problem. Thankfully, this is another area where technology looks set to make out lives better …
3. Sweet mobility – The electric explosion
Hypothesis #3: Rapid developments in electric technologies will not only transform the transport technologies we already have, such as cars, buses, and trains, but it will see the emergence of a range of smaller devices tailored to different needs and peoples. These devices will gradually solve the “last leg” problem and complement high-quality PT services.
Unbeknownst to many, the world is undergoing an explosion in electric transport technologies. This explosion is not, however, confined to cars, even though Tesla garners a lot of publicity.
Ineed, the primary impacts of the electric explosion is on devices that are much smaller in size. For example, here’s the “Folkvänlig”, which for those of you who don’t speak Swedish means “People friendly”. This is an electric bicycle developed and sold by IKEA, which can achieve a top speed of around 30-40km/hr and has a range of 50-100km.
Some of you may be thinking that e-bikes are a niche technology. If so, then you’d be incorrect.
In 2014 global e-bike sales totaled 32 million (source). By way of comparison, in the same year global cars sales were 85 million (source). That’s right: sales of e-bikes alone represented more than one-third of *total* cars sales. Another statistic that worth considering: Global electric car registrations hit only 320,000 in 2015 (source). So on a global basis, annual e-bike sales exceed electric car sales by a factor of approximately 100 to 1. Think of that the next time you see a glib news story about Tesla (NB: I love the concept of electric cars, I just feel that they’re significantly less important than e-bikes).
There’s any number of other wonderful electric mobility devices that are already on the market. Some are even small enough to be picked up and carried with you, thereby complementing the use of PT. We have electric scooters …
And the solo wheel … (“reinventing the wheel”).
Electric technologies also have implications for PT. Buses could soon be electric, while batteries may enable electric rail that is powered by overhead wires to operate “off-grid” for some distances. Such technologies could be applicable in Auckland, for example by enabling us to extend the reach of the EMUs to places like Pukekohe without incurring the costs of electrification.
Conclusion: Reinventing the wheel?
Just to sum up:
- Hypothesis #1: IT technology will make it easier to use the best transport mode, rather than the one that is easiest.
- Hypothesis #2: Driverless technology will drive down operating costs to the point where PT is profitable in many cases
- Hypothesis #3: Electric technologies will improve the transport modes we already have, and see new ones becoming available
In short, emerging transport technologies may mean the future is characterised by far fewer cars and greater uptake of non-car transport modes. I’m not saying this is a given, but it does seem possible – and even likely.
I want to finish by considering a recent report by NZIER. This report evaluated changes in car technology and concluded they were awesome and going to destroy PT, i.e. a different conclusion from what I have reached here. While I disagreed with the authors of the NZIER report on almost every point, I found myself agreeing with some of their recommendations.
That is, given the uncertainty inherent to discussions of future transport technologies perhaps the best thing we can do is ensure that our current policy settings are 1) non-distortionary and 2) durable. Such policy settings are often referred to as “no regrets” policies. So when the NZIER report calls for shifting to a road-user based system, especially one that allowed for time-of-use road pricing, I agree. This would encourage more efficient transport and land use choices today, while also preparing ourselves for the uptake of electric cars in the future, if that comes to pass.
I think this is all kind of cool. There’s lot of exciting transport technologies on the horizon, and regardless of what we do they will result in a more efficient and effective transport system. And even if people disagree on how technologies will impact our future, we can still agree on some changes we should make.
What would you do if you were NZ’s grand transport pumbah? Let’s hear it.