Transportation 2.0 and the Shared Economy

John Ellis challenges Leadership Forum participants to prepare for a new mobility experience and reality.
February 09, 2018

MIAMI – As convenience and fuel retailers continue exploring disruptive forces and delivering an immediate and compelling experience at their stores, Thursday’s NACS Leadership Forum program raised even more questions related to mobility and what will be on the road in 15 to 30 years. Or, as John Eichberger, executive director of the Fuels Institute put it, “What’s the compelling value to the consumer in the world of transportation?” 

In past several years, Eichberger has been asked many times what’s really going on with electric vehicles, and even more of late as countries such as Great Britain and France say they are banning the internal combustion engine by 2040. “Except for hybrids,” he clarified. “The last time I checked, the hybrid vehicle has an internal combustion engine running on gasoline. However, China and India want to go all-electric…China had 33% of the global vehicle market share last year, and by 2060, India and China are projected to have a combined GDP of 40% globally. Are they going to move the market?”

Going back to the notion of offering a compelling value, Eichberger questioned how much an electric vehicle has for the consumer, particularly when EVs have about 1% market share in the United States. “We’re asking consumers to learn something new” with EVs, and we’re asking them to change their behavior (recharging instead of refueling). “I always bring the consumer element into these analyses because I think that compelling value to the consumer is missing,” he said. However, there is compelling value in autonomous vehicle technology; it’s just a matter of adoption rates.

John Ellis, the global technologist and head of the Ford Developer Program with Ford Motor Company for more than 25 years, is also looking at the transportation market but through a different lens. He calls it the shift from transportation 1.0—the combustion engine owned and driven by a person—to transportation 2.0—the sharing of a vehicle that is not driven by a human and powered by electric, the shared autonomous electric vehicle. 

“We’re very early in the stages of the sharing economy,” Ellis explained. “A lot of the harbingers of the future are what we do in terms of distributed identity: The ability to know that the asset will be used properly, to properly accredited and properly accounted for.”

The next part of the shared economy is the autonomous vehicle. Today, vehicles have hundreds of sensors to help people drive safely. However, there are 1.25 million deaths worldwide (37,461 in the United States) caused by vehicle collisions in 2016. “The incident rate is going the wrong way” in terms of death by vehicle collisions, said Ellis.

“We have to educate people about what vehicles can do to increase their safety,” also called the education phase of autonomous adoption. The next phase (2022-2027) is where we start to see actual autonomous vehicles driving themselves on the roads. The third phase (2027-2040) is enabling autonomous fleets to move cargo efficiently and quickly, and the final and fourth phase is where cities are taking an active role in crafting what the landscape looks like.  

Autonomous vehicle adoption is becoming a much larger discussion. At the 2017 Fuels Institute Annual Meeting, Ryan Robinson, associate director of research at Deloitte Canada, shared research by the firm that found consumers need reassurance of an established safety record—in real-world conditions—to make sure autonomous vehicles can handle the variables that exist while operating among human drivers.

For consumers who would be interested in new vehicle technologies like autonomous, they aren’t willing to pay for it. Robinson said that Deloitte research found that some consumers are not willing to pay a dime to access advanced technologies, with the expectation that in time, these new innovations will simply be built into new vehicles.

Ellis also talked about the emerging passenger sharing economy, as city mayors around the world are publicly attacking single-use vehicle usage and using smart city innovation as the platform to fight such usage. He noted that in terms of real estate, there are 2 billion parking places dedicated to parking cars in the U.S., which is equivalent to 11,622 square miles (50 cities of Chicago).

“There’s a shift in the business models and historical foundations of the individually owned vehicle” that is driven by a human and powered by combustible engine, said Ellis.

To process and adapt to this emerging sharing economy, “You need to use the word paranoia,” Ellis said. “If you use the word fear, that freezes you. Paranoia is a healthy acknowledgment that something is uncomfortable” and that you have to do something differently.

The Fuels Institute continues to look at various factors that could influence the future market, including electric, autonomous and shared mobility. These and other topics will take center stage at this year’s Fuels Institute annual meeting, FUELS2018, taking place May 22-24 in Chicago. For more information, contact Donovan Woods, director of operations for the Fuels Institute, at dwoods@fuelsinstitute.org

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