Jonathan Smith, Senior Principal Consultant at Expleo
Vehicle ownership a one-way road to becoming a service-based market
In recent weeks, MPs have stated that for the UK to meet its net zero carbon emissions target by 2050, we’ll have to park our personal vehicles in the past.
It comes as a result of the Science and Technology Select Committee stating that technology alone cannot solve the problem of greenhouse gas emissions. “In the long-term, widespread personal vehicle ownership does not appear to be compatible with significant decarbonisation”, stated the report.
So, how can the UK revaluate its national infrastructure network to reduce personal vehicle ownership, without compromising social mobility and aimlessly investing in new technologies?
Personal vehicle ownership as a service.
A network of vehicles owned, managed and maintained by competing private sector companies, that connect consumers through a national system of vehicle usership as a service. Through investment in connectivity and infrastructure, the future of vehicle usership could look a lot like a national network of taxis and rental cars.
However, for the many of us who excitedly entered their late-teenage years eager to learn to drive and take to the roads, the children of tomorrow will never own a car, nor have a need to learn to drive.
Instead, tomorrow’s children will simply be required to learn to use a ride-hailing app – to get themselves from one place to the next.
Has public transport failed?
An increased investment in public transport may certainly seem the obvious answer to reduce personal vehicle ownership without compromising social mobility, but in years gone by, there is little to suggest consumers view public transport as a valid alternative to personal vehicle ownership.
For all the investment and development across London’s transport network, London has the longest commute time of any region across the UK, with an average journey time of 46 minutes. That is almost 20 minutes longer on average than any other region.
Moreover, the disparity in the quality of public transport in and outside of London is a good indicator of how the current system is failing to invigorate social mobility. Bus journeys declined 1.9% across England between April 2017 and March 2018, with a 0.7% decrease in London and 3.2% outside of London. Since 2008, bus journeys have decreased by 15.5% in metropolitan areas outside of London.
Public transport has not reaped its promised rewards, both for increased efficiency and significantly reducing our carbon footprint. The industry must instead look for more innovative and impactful solutions, to address the challenges that public transport has not solved.
Is vehicle ownership as a service the answer?
To address “significant decarbonisation” the commercial car industry requires a significant shake-up.
Personal vehicle ownership has resulted in a surplus of vehicles, decreased use of public transport and increasing traffic congestion (with the traffic growth forecast being 17% to 51% between 2015 and 2050 ).
This surplus in both the number of vehicles and similar journeys made has in turn increased the production of fossil fuels, congestion, the releasing of dangerous pollutants into local environments, journey times and created the need for expensive and carbon-heavy infrastructure projects, like the building of new car parks and additional motorway lanes.
Put simply, to achieve net zero, vehicle ownership must become a service hardwired into the national infrastructure. We know consumers are beginning to appreciate the need for the industry to move in this direction, with 67% of consumers expecting their use of car-sharing services to “increase, or increase a lot”, in the next two years (McKinsey, 2017).
The technology to implement such a system is readily available and in use around the world.
Take Uber’s ‘Pool’ option for example and apply that same operating process and software to the UK’s national infrastructure. Now consider cars as we know operating as ‘flexible’ buses. The technology is available, it is a question of investment, not innovation.
Such a system would give consumers the capacity to share school runs, trips to the shops, visits to the local GP and so on. Regardless of whether the car was fully automated, electric, hydrogen or pulled by horses, each consumer would have the same level of access as the next. Enabling communities to come together and collectively ‘do their bit’.
Through such a shift, we would expect vehicle ownership as a service to result in a reduction in the number of cars on the road, journeys made, length of journey, traffic collisions, demand for fossil fuels, congestion and dangerously high levels of inner-city pollution.
What’s important to appreciate here, is that whilst funding will inherently be necessary, it goes far beyond money.
The imperative need to drive innovation at both the technological and infrastructural level, derives from the need for businesses to stay relevant in increasingly saturated markets, with greater consumer choice. Carefully assessed and monitored investments into R&D, should help to reduce the all too familiar practice of innovating for innovating’s sake.
But, as new innovations are added new risks emerge, requiring state-of-the-art cyber security and safety solutions to counteract these potential risks. Every technological offering and innovation must be embedded with creative engineering and quality assurance to ensure continuous improvement in performance and safety. In the current “existential crises” of the climate and with the looming 2050 net zero target, there is an exciting and prosperous opportunity for an automotive industry stakeholder, who best capitalises on addressing these challenges.
Automotive manufacturers and other stakeholders should therefore actively be looking to develop and implement technologies that improve efficiencies.
The complete re-evaluation of the business model for personal vehicle ownership and dealership is set to be the biggest shake up of the automotive market, since the arrival of Ford.
Technological change will drive greater efficiencies, revolutionising the quality of transport and in turn, life.