Electric vehicles. Autonomous vehicles. New mobility businesses like Uber. Any one of these could be disruptive enough. Together, the impact could be seismic: potentially a fundamental shift in the way we get around and in how cities are organized.
A new report from Bloomberg New Energy Finance (BNEF) and consultants McKinsey sizes the impact of these trends, plus others like the internet of things (which will connect vehicles together) and the drift toward to urbanism (which is likely to see denser and more crowded metros). Its conclusion: Some cities could move rapidly to shared on-demand, door-to-door private transport, moving away from both internal combustion engine (ICE) cars and traditional public transit.
"In the 2020s, the costs of commuting via public transit versus shared, self-driving vehicles may converge," it says. "Some travelers could decide to shift—occasionally or structurally—from public transit to shared mobility, as the convenience of a door-to-door on-demand offering is compelling."
BNEF and McKinsey don't see all cities moving at the same pace. Rather, it sees three types:
Cities like Delhi, Mexico City, and Mumbai ("clean and shared" category) will focus on the EV part of the equation in an attempt to reduce pollution. Poor infrastructure and interference from pedestrians will hamper any shift to autonomous vehicles (AVs). Human drivers will stay in control, even if a variety of two- and three-wheel vehicles and ride-hailing apps will proliferate.
Meanwhile, a second type of city characterized by sprawl (think L.A. or San Antonio) will still privilege personal, private car ownership, even if "autonomy and electrification allow passengers to use time in traffic for business or pleasure." Traffic will be optimized with intelligent infrastructure, but car sharing, ride hailing, and ride sharing will still be complementary, not the main way of getting about.
But a third type—densely populated, high-income places like Chicago, Hong Kong, London, and Singapore—will move away from private car ownership toward shared AV mobility, the report says. People may travel more overall, because picking up an Uber AV will be relatively cheap and easy. There's less need for parking (because cars keep moving around, picking people up) and fewer buses, because people want the convenience of "last mile" pickup and drop-off, not the hassle of waiting at the bus stop.
The report sees electrification, automation, and shared business models working in concert, producing compound effects. For example, the shift to EVs will reduce battery costs, while the uptake of shared mobility will accelerate vehicle electrification. By the mid-2020s, private EVs are competitive with ICEs on a total cost of ownership basis, and earlier than that for high-use vehicles like delivery fleets and taxis.
This isn't science fiction: The shift is underway. Car manufacturers are investing heavily in the mobility-as-a-service future. Singapore, already a world leader for urban transport, has signed partnership agreements to test shared, on-demand, and door-to-door options. And, Norway is mandating that all new car sales be electric by 2025.
And happily, the report says the social benefits—in reduced congestion, pollution, and accidents—could be considerable. By 2030, it forecasts $2,800 in savings per person in the "clean and shared" scenario, mostly from improved safety. It forecasts $3,300 in savings for the second "private autonomy" scenario. And, in the most advanced scenario ("seamless mobility"), it expects $7,400 savings per person (and a global GDP boost of 3.9%).
Sure, some taxi and truck drivers may lose their jobs. But everyone else will be better off. See more here.