Frictionless, automated, personalized travel on demand—that’s the dream of the future of mobility. And the extended auto ecosystem’s various elements are coalescing to realize that dream sooner than expected, which means that incumbents and disruptors need to move at top speed to get on board.
Ben is exhausted. It’s 9 o’clock on Friday evening, he’s been at his desk for 13 hours, and he’s clocked more than 70 hours this week. All he wants is a quick bite to eat and to head home, as quickly and painlessly as possible. He pulls out his smartphone and scans the options that his mobility app suggests. Train or bus? Too many stops. A carpool vehicle? He’s in no mood to make small talk with strangers. He opts for his own autonomous taxi, price be damned, and tacks on his standard order from the local pizzeria.
The small electric car—no driver—picks him up a few minutes later, just as Ben steps through the front door and onto the sidewalk. His slice (with extra onions) is still steaming when he opens the pizza box sitting on the car’s table; the taxi picked it up moments before Ben climbed in. He settles in and enjoys an episode of his favorite guilty-pleasure reality show that the car has cued up for him. The cost of the whole trip is instantly deducted from his account. Twenty minutes later, he’s at his apartment door. Half an hour after that, he’s fast asleep, dreaming about his plans for the weekend.
A journey like Ben’s, and the complex web of actors required to make it happen, may be possible sooner than many of us imagine.
A year ago, we posited that the extended global automotive industry was undergoing an unprecedented transformation into a new mobility ecosystem. Since then, the pace of change has been, in our view, breathtaking. Through hundreds of conversations with corporate executives, government leaders, technologists, and academics around the globe, we have gained a front-row seat to how the future of mobility is evolving. In particular, we have witnessed:
Broad acceptance of the core tenets of how this evolution will unfold. Skepticism persists and uncertainty abounds, but we have seen surprising agreement that a fundamental shift is driving a move away from personally owned, driver-driven vehicles and toward a future mobility system centered around (but not exclusively composed of) driverless vehicles and shared mobility (see sidebar). Less agreed upon: the speed at which this transformation will take place, how the future ecosystem will be constructed and function, and how corporate leaders believe their enterprises’ business models need to adapt.
Governments catalyzing the emergence of a new mobility ecosystem. The US Department of Transportation (DOT) launched the Smart Cities Challenge as a fillip for cities and states to experiment with cheaper, faster, safer, greener, more efficient, and more convenient transportation for citizens. The 78 submissions, including that of eventual winner Columbus, OH, spanned a wide range of intermodal innovations and provided an incubator for new forms of transportation and new ways to consume mobility, potentially making them available and commercially viable sooner than a market-only approach would create. The DOT continues to serve its primary mission of public safety, while demonstrating that it can play a pivotal role in driving innovation through investments and regulation. States such as Nevada, Michigan, Pennsylvania, and Florida6 are developing pilot programs and implementing regulatory changes to accelerate adoption of the future mobility ecosystem, as they seek to provide more and better options for their citizens and to spur economic development.
Significant moves by industry incumbents and disruptors to enact the future. As we anticipated, both sets of players have come to the realization that collaboration is key to gaining a value-added role within the ecosystem. Many of these moves are speculative, exploratory, and of a nature to create option value. Noteworthy examples include GM’s $500 million investment in Lyft and acquisition of Maven, a carsharing platform;8 Ford’s launch of Ford Smart Mobility and investments in Velodyne, SAIPS, Nierenberg Neuroscience, and Civil Maps; Daimler’s investments in Moovel and Car2Go; and multiple efforts by both technology companies and automakers to develop autonomous vehicles. And while these are important developments, they likely represent just the early stages of the transition. We anticipate large-scale, in-market pilots in the next 12 to 18 months; the introduction of commercially available fully autonomous electric vehicles (either as part of shared fleets or for private ownership); and tangible examples of what the cities of the future will look like, including the reduction of curbside parking, intelligent traffic signals, and the emergence of seamless intermodal transportation choices.
Given this dynamic and changing environment, many questions remain:
- How quickly will the future arrive, and how sweeping will the changes be?
- What will the new ecosystem look like, and how will it operate?
- Where will value be created and captured?
- How should an organization transform its strategy, business model, product portfolio, and capabilities to succeed?
This paper aims to advance the collective thinking around answering these questions. It extends our initial perspectives and incorporates new insights and analyses gained from an extensive and ongoing dialogue with most of the key players driving these changes. Ultimately, we hope this article provides a roadmap of sorts, helping stakeholders determine where to play and how to win.