Introduction

Part of STL Partners’ (Re)connecting with Consumers stream, this report explores how telcos could support the companies seeking to reinvent how people get around the world’s increasingly congested cities. It looks at the serious problems arising from congestion and the need for a multi-modal approach to urban travel (incorporating ride hailing, public transport, bike and scooter sharing). The report then considers the many challenges facing the new players trying to bring about this multi-modal future, before making creative and constructive suggestions as to how telcos can help address these challenges. Finally, it also outlines how some operators, such as M1 in Singapore, China Mobile and China Telecom, are already playing an enabling role in the personal transportation market.

In particular, the report explores whether telcos can help coordinate the provision of transportation, as well as providing the underlying connectivity that will enable travellers to get information and make bookings on the fly, while allowing the transport providers to monitor their assets.  In many respects, the provision of effective public transportation is a systems integration challenge that requires a wealth of highly accurate real-time information about what is happening across a city.

As explained in the STL Partners report: The Coordination Age: A third age of telecoms, telecoms networks and related services can help people and companies use assets, such as bikes, cars and roads, much more effectively than they have in the past.

This report also builds on other STL research, notably:

• Can telcos create a compelling smart home?
• Uber and Tesla: What telcos should do
• Autonomous cars: Where’s the money for telcos?

The financial and human costs of congestion

After decades of urbanisation, many affluent cities in North America, Europe and East Asia are gridlocked with traffic. In much of the developing world, people continue to migrate to urban centres in search of work, clogging up roads from Bangkok to Bogota. Urbanisation is at its most extreme in East Asia (see Figure 1) where internal migration over the past decade has seen cities across China expanding at breakneck speed.

Figure 1: People have been flocking into cities worldwide for the past five decades

Source: The World Bank

The population density in some major economic hubs in the developing world, such as Mumbai, Manila and Lagos, is higher than 10,000 people per square kilometre (see Figure 2), compared with 1,510 people per square kilometre in London. As the UK capital suffers from serious traffic congestion, many cities in the developing world simply do not have enough space to allow the car to be the primary form of transport for their citizens.

In any case, private cars are not a sustainable mode of transport. As well as reducing people’s productivity and quality of life, traffic congestion is damaging air quality and harming human health. Air pollution has become the fourth highest risk factor for premature deaths – one in 10 deaths worldwide is attributable to air pollution exposure, according to the World Bank. Moreover, the bank says the economic burden of pollution is immense for the world and for individual countries. It estimates that ambient particulate matter (PM2.5) air pollution alone cost the global economy US$5.7 trillion, or 4.4% of global GDP, in 2016.

Figure 2: Many cities in the developing world are very crowded and cramped

Source: UN

So where is traffic congestion at its worst? Of the 38 countries covered by the INRIX 2017 Traffic Scorecard, Thailand is top of the list. In Thailand, drivers spend an average of 56 hours in rush hour congestion, ahead of Indonesia (51 hours) and Columbia (49 hours), followed by Venezuela (42), and the U.S. and Russia both with 41 hours (see Figure 3). Among developed nations, U.S. and Russia have the most congested cities in the world.

Intriguingly, sales of cars fell in 2018 for the first time in almost 28 years in rapidly urbanising China, a symptom of both the economic slowdown and the frustration of trying to drive in the country’s congested cities. Traffic jams, parking difficulties and overcrowding on buses and subways are the top three problems for urban commuters in China, according to a 2018 report by think tank Tencent Financial Technology.

Figure 3: The countries where the most time is lost to traffic congestion

Source: NRIX 2017 Traffic Scorecard

INRIX’s data shows that Los Angeles tops the list of the world’s most gridlocked cities, with commuting drivers spending an average of 102 hours in congestion in 2017, followed by Moscow (91 hours), New York (91 hours), San Francisco (79 hours) and Bogota (75 hours).

Figure 4: Most of the most gridlocked cities are in the developed world

Source: NRIX 2017 Traffic Scorecard

Contents

• Executive summary
• Introduction
• Disrupting urban travel
  • Similarities with telecoms
• Bringing about a multi-modal future
  • The Amazon of transportation?
  • Uber’s competitors
  • Takeaways – why one company won’t win
• The rise of e-bikes and e-scooters
• The challenges confronting micro-mobility
  • Lack of profitability
  • The maintenance and charging conundrum
  • The threats of vandalism and theft
  • Safety and public order
  • Buying rather than renting
• How telcos are getting involved
• Conclusions

Figures

1. People have been flocking into cities worldwide for the past five decades
2. Many cities in the developing world are very crowded and cramped
3. The countries where the most time is lost to traffic congestion
4. Most of the most gridlocked cities are in the developed world
5. An overview of the pros and cons of different modes of urban transport
6. Lime and Bird are clear leaders in the US e-bike and scooter sharing markets
7. Both Lime and Bird have reported rapid growth in the number of rides
8. Lime claims using its products is far cheaper than using a private car
9. Challenges facing providers of shared bikes and scooters
10. Some Northern European countries have embraced cycling in urban areas
11. Sales of bikes (including electric-bikes) continue to rise