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It’s about moving from A to B

PA's automotive expert

Fleet Europe

1 July 2014


City dwellers accustomed to regular traffic jams and road rage may shudder at the prospect of the world's urban areas getting even more crowded.

Nonetheless, the world’s population is becoming increasingly city-based, with 50% – or 3.5 billion people – living in urban areas. By 2050, this figure is expected to reach 70% of the population (6.3 billion people). Today, 64% of all journeys taken are in cities and the amount of travel within them is expected to triple by 2050. 

Urban mobility is one of the toughest challenges that cities face. As a result, we will continue to see massive investments being made in this area.

We found five key trends:

  1. All cities are aiming at multimodal solutions which seamlessly connect different modes of transport according to customers’ specific needs
  2. There is a leaning towards a ‘one-stop-shop’ by city mayors, with public tenders focused on integrated urban solutions 
  3. City governments are feeling increasing pressure to work on climate change-related issues and there is increasing competition among global cities to be the greenest
  4. There is a move from single to multiple local strategies 
  5. There is a shift of urban growth to Asia. Chinese cities will contribute about 29% to the world’s GDP growth, and seven Chinese cities will make it into the top 25 in terms of GDP, by 2025.  

The future is networked 

Enabling seamless travelling across different modes of transport in areas that integrate mobility, consumer and other city services is a model many cities are developing.

The strategic imperative is to establish a networked multimodal urban mobility system, which focuses on the needs of the individual customer. Cities are building increasingly holistic business models around access to the consumer, and using this to influence big local players such as banks and telecommunication providers. It’s a way for cash strapped cities to receive financing to fund smart city investments.

From Stuttgart to Hong Kong  

Stuttgart aims to provide its citizens with integrated mobility – enabling the seamless use of trains, trams, buses, car-sharing and bike-sharing from different providers. To make this happen, it is offering four smart-city services – smart mobility, smart business, smart city services and tourism, and smart energy – through a ‘key’ that serves as access to each service. 

A set of partners is being put in place to provide these services including a regional bank to provide payment services, Daimler ‘key’ technology for the sharing concepts, Deutsche Bahn and SSB for public transportation, and a consortium that will develop the platform and mobility card.

This idea is very similar to the ‘octopus system’ in Hong Kong, where there is a well-balanced split between different forms of transport that move people away from individual motorised transport. In this city, travel is integrated through multimodal mobility cards that are owned by 95% of citizens.

Integrated multimodal mobility for everybody 

We find that the mobility systems that succeed are designed according to the needs of the different customer segments and thought of as an end-to-end entity.

This means easy access to all modes of transport, seamless interconnection, integrated payment systems and dynamic information on journey options. All supported by smartphones, and complemented by innovative mobility services, discount incentives and loyalty programmes.

While the logic for focusing on the customer is convincing, the challenges of putting it in place are twofold. Firstly, a collaborative platform needs to be established to align the complex set of stakeholders – the administration, the businesses and the consumers – and help them agree on a common business model.

Imagine how difficult it is to bring OEM’s, public transport companies, city authorities and banks together to collaborate on one value proposition for the citizen.

Secondly, cities must reach out to a sufficient number of citizens to create the momentum needed for a sustainable solution. Once established however, the platform will represent the dominant city platform for millions of city customers.

What you need 

While we see millions spent on future mobility systems, the main bulk of this investment is around three topics: 

  1. The smart city hardware and software required for B2B partner equipment (including access, payment, connectivity) and public transport upgrades 
  2. A web-based platform providing access to millions of consumers. Information, authentication and booking, together with real time multimodal routing and location based services, is a key value  proposition
  3. The carrier media – the universal ‘key’ enabling access to all smart city services. Typically, there will be different media for various customer groups, ranging from simple paperback to near field communication chips built into modern smartphones. 

The investments required usually range within a two-digit €million value for a mid-size city. This is rather insignificant when compared to investment in infrastructure where the spending is well into the billions. While investment financing in infrastructure is generally not sought after, smart city investments are attractive as access to millions of consumers means the payback can be very promising.

Collaboration is vital

Solving the issue of city mobility requires more than vision alone. Stakeholders must collaborate and compete appropriately and never forget customers’ needs.

Leading cities such as Hong Kong and Stuttgart rely on a highly integrated mobility system – with a smart card at its heart – and point the way to highly networked multimodal future.


PA Consulting Group in Germany

Jost Kamenik

Jost Kamenik

Thomas Göttle

Thomas Göttle

Alex Tamdjidi

Alex Tamdjidi

Olaf Remmler

Olaf Remmler

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