I interviewed Wolfgang Lehmacher who discussed Autonomous Vehicles and the Impact on Urban Supply.
Wolfgang. Can you first provide a brief background of yourself?
I am passionate about the flow of goods and the supply chain, which I consider to be the backbone of business and modern life. My interest lies in particular in the area at the nexus of economy, society and the environment. In particular, I am looking for combinations which at least serve more than one of the three dimensions. We need people and technology to make this happen and achieve progress at this vital nexus. We need to find solutions which cover the needs of seven billion people without depleting our resources. We need to protect the life of future generations. Are we going into the right direction? Yes! However,I believe not fast enough. We need to accelerate and intensify our efforts – individually and collectively!
One are we need to focus on is urban planning, in respect to mobility and beyond. Every month the equivalent of the population of Denmark is moving into the cities, this is about six million people. Already today, there are worldwide 300 cities with more than one million inhabitants. The world’s biggest city is Tokyo with around 38 million inhabitants and China plans the Perl River City with 42 million people – resulting from the merger of 11 urban areas – and with a growth projection of 80 million urban dwellers. We easily can imagine the enormous needs in respect to energy, food etc. and of course mobility.
Not only the mobility of people: urban dwellers require also commerce. People do not only wish to be mobile and buy goods in shops but also receive online purchases quickly and at home. This increases traffic, and possibly accidents, noise and pollution. Investments in new technology and new models of operation are needed to provide the required capacity but also reduce unwanted side effects, such as CO2 emissions.
What are these solutions for today’s overcrowded cities?
Two developments are most possibly important: autonomous vehicles and the sharing economy. Just imagine everyone would share vehicles. The World Economic Forum in collaboration with the Boston Consulting Group is working on the understanding of requirements and consequences of operating self-driving vehicles – in particular in cities. Many benefits have been identified. For example: approximately 20 percent better fuel-efficiency, 70 percent less accidents, 60 percent freed parking space, and about1.2 billion hours of pure driving time saved over a period of ten years.The highest willingness to share a self-driving vehicle was encountered in China and India, the lowest in the Netherlands and the United Kingdom.Of course, self-driving comes not without new risks and challenges, such as the impact on jobs. Nevertheless, the combination of autonomous vehicles and sharing economy is a powerful formula Dustin.
What are the biggest barriers in respect to implementing the self-driving vehicle concept in today’s cities?
The World Economic Forum has spoken to policy makers in 25 cities, including New York, Amsterdam, Dubai and Singapore, and has conducted a consumer survey amongst 5,500 city dwellers.
We know that many cities are pushing towards sustainable mobility modes, such as public transport, walking and cycling. In this light, many policy makers seem to have thought about self-driving vehicles. However, they have expressed that there is high uncertainty, in particular around public acceptance and technological readiness: 56 percent consider consumer acceptance as the top impediment, 44 percent see the biggest barrier in the maturity of the technology. However despite this, 88 percent of the policy makers expect autonomous vehicles to gradually become reality starting within the next ten years.
58 percent of the5,500 urban dwellers surveyed in the 10 countries and 27 cities are ready to try a self-driving car. 53 percent are willing to buy one and many are prepared to pay more than 5,000 USD extra for a self-driving vehicle. The most important advantage is seen in the time saved for parking and driving. The biggest concern is safety. And there is good news for the environment too: For 66 percent of the respondents a self-driving vehicle is electric or hybrid.
What does this mean for the transport of goods?
The person with the truck and the van will be largely freed from driving. Instead, other tasks can then be completed: for example preparing documentation, checking devices or communicating with customers and receivers. Provided legally permitted, also preparing for unloading or sorting can be considered while vehicles are self-driving. Maybe less personnel is required in the driverless future. Consequently, productivity gains, lower costs and better quality and service can be expected. Good news for shippers and transportation companies.
We might also see more democratization of the supply chain. Owners of self-driving cars might wish to use the own vehicle to pick-up goods instead of having parcels delivered at home or other places, such as work or service points, by delivery companies. This will probably not replace the delivery services of today’s express parcel operators but might be an interesting supplementary option for consumers. And the retail business as well might benefit from the new level of convenience.
The autonomous concept does not come without threats. 60 percent of the policy makers expect that there will be a ban for private cars in a significant part of the city over the next 15 years.Will this ban stay limited to private vehicles? Probably not: over time cities might also be tempted to limit goods delivery activities.In some cities only authorized companies might be allowed to operate a fleet – for example only a self-driving electric and hybrid fleet. Therefore, not only transportation companies, also shippers need to prepare for the driver less future.
What are the gaps to be closed, items to be resolved?
Although less accidents are expected, we need to better understand the risks and find solutions before going into mass application of autonomous mobility. One concern is cyber risk. We need to ensure that self-driving cars cannot be hacked.There are also ethical questions to be answered. How to decide who the vehicle is supposed to save in case of an accident. Furthermore, cities need to consider the impact on jobs: where to start to permit self-driving operations, in passengers or cargo mobility? In what way: instantly or gradually? And what will be the impact on public transport and transportation companies?
About Wolfgang Lehmacher