Technology Is Changing Transportation, and Cities Should Adapt

Executive Summary

The shift to next-generation mobility systems won’t be easy for cities to manage. Some cities have chosen a wait-and-see approach, opting to watch mobility trends and develop policy responses as needed as trends play out. Officials might do better to envision what mobility ought to look like five to 15 years from now, and devise policies to bring about that future sooner than it might otherwise arrive.

It has taken only a few years for ride-hailing services to make urban journeys more convenient in many cities, much to the delight of city dwellers the world over. And as innovation brings self-driving cars, electric vehicles, in-vehicle data connectivity, mechanisms for sharing rides and vehicles, and other technologies to more people, getting around cities will become easier, faster, and safer.

Such improvements could help cut the costs of traffic congestion (about 1% of GDP globally), road accidents (1.25 million deaths in 2015), and air pollution (health problems like respiratory ailments). McKinsey and Bloomberg New Energy Finance have estimated that in 50 metropolitan areas worldwide, a rapid transition to advanced mobility systems could yield $600 billion in societal benefits through 2030.

The shift to next-generation mobility systems, however, won’t be easy for cities to manage. There is no telling how quickly advances will take place or what the transition will look like.

Research has shown, for example, that the more people use shared private transportation like ride-hailing apps, the more likely they are to also use public transit. But if too many urbanites begin to depend on private vehicles, even shared ones, traffic could get worse and public transit systems might be starved of the fares they need to pay for maintenance and upgrades.

These complex dynamics put municipal authorities in a bind. Some have chosen a wait-and-see approach, opting to watch mobility trends and develop policy responses as…

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