The public and private sectors are increasingly targeting smart city technology use cases to effectively facilitate rapid urbanization. We previously defined smart cities as including elements of high technology, environmental sustainability, economic prosperity, and livable space. At a deeper level, we point to resource use and efficiency, digitization, governance, and mobility as key components of a dynamic smart city landscape.
As technologies and needs in urban mobility specifically have changed in recent years, we have decided to outline how Lux has chosen to taxonomize urban mobility as it relates to smart city development. We chose the main categories based on their inclusions of the broadest range of subcategory technologies engaged in the mobility transformation. City infrastructure plays a crucial supporting role in efficient mobility, while transporting people and parcels require their own unique solutions. Below, we have chosen to briefly expand on those subcategories that we deem most interesting in the current smart city mobility landscape.
Infrastructure encompasses those technologies that inherently rely on stationary or installed assets, primarily enabling digital solutions.
- Parking innovation will take many forms, though most will seek to leverage mature sensing technologies to manage existing spaces and lots, communicating results to commuters via different digital pathways. Similar to sensor-based traffic management technologies, smart parking solutions intend to offer cities and vehicle owners reprieve from unnecessary vehicle circling and overcrowded lots while also ensuring that cities are maximizing revenue from parking infrastructure.
- Traffic management innovations seek to both monitor and control the flow of vehicles and pedestrians. Integrated detection (sensor) and software technologies intend to capture traffic data and use the resulting analytics capabilities to inform city officials and control signals. Recent conversations have highlighted intelligent traffic management systems as low-hanging fruit that cities are aggressively targeting to positively impact traffic flow.
Passenger mobility consists of shared mobility innovations and business models that stand to disrupt traditional vehicle sales and conventional car ownership.
- Micromobility has emerged as an innovative solution to fill gaps in first- and last-mile mobility. Arguably the most contentious urban mobility innovation of the past decade, the model features docked and dockless electric scooters, bikes, and mopeds strategically scattered throughout cities. While billions of dollars in venture funding have gone toward introducing and rapidly iterating the electric vehicles, companies have struggled to reach profitability, and the outlook for many specific players remains unclear in the overcrowded space.
- Ride-hailing, one of the first and most influential innovations in the smart city mobility revolution, largely popularized the gig economy and gave rise to the development of superapps. Despite billions of dollars of funding, struggles in profitability have plagued the industry, though Uber was on track to be profitable by the end of 2020 before COVID-19 hit, and companies will need to begin addressing concerns that ride-hailing adds congestion and emissions to cities. Supporters of the ride-hailing model point to autonomous vehicle fleets as potentially underpinning successful operations.
- Public transit agencies are actively exploring solutions that help maintain or increase ridership, even in low-demand environments like COVID-19 has brought on. Many are also looking to integrate multimodality, exploring MaaS solutions that connect public transit with first- and last-mile solutions. The key here is not necessarily for cities to completely alter existing systems but to look for ways to maximize the efficiency of existing assets using digital and business model innovation.
- The air taxi, or vertical take-off and landing (VTOL), segment has garnered extensive interest recently, with billions in funding going to startups and corporate development projects looking to capitalize on the futuristic technology and be first to market. While the allure of flying cars and on-demand air taxi networks arouse the imagination of even the most cynical skeptics, high capital requirements, long development timelines, technological limitations, and regulatory hurdles stand in the way of these ventures taking flight.
Logistics and parcel delivery refers to technologies and business models that assist in transporting goods to their final destinations. As more packages are shipped around the world than ever before, many are asking how to move packages cheaper and quicker.
- Drones,the most technologically mature method of automated delivery today, can transport packages faster than any other mode, though payload capacity and range limit the use case. Still, companies are already deploying drone transportation in operational capacities, with many more expected to leverage the technology in hopes of reducing operational costs and improving fulfillment time.
- Autonomous vehicles are expected to play an extensive role in the future of general mobility, although the timelines are longer than most expected, and emerging use cases indicate that the technology will first benefit the delivery sector. Autonomous vehicle lockers are poised to deliver more than 20 billion parcels by 2030, outpacing both drones and sidewalk robots combined. Large stakeholders have already seen success piloting such solutions, with good reason, as Lux predicts autonomous parcel deliveries will generate more than $33 billion in revenue in 2030.
The smart city space has ample opportunity for stakeholders to identify exploitable innovations. Arguably, mobility in the smart city offers more of this opportunity than other segments, as it inherently integrates digital transformation, resource use and efficiency, and governance. With a few exceptions, many of the subcategories have market-ready technologies, lacking only effective applications or business models. Specifically, companies engaged in the sensor, communications, and software spaces have the ripest opportunities in the near term to capitalize on the push for smart city mobility, considering scalability, maturity, and decreasing component prices. Still, those considering their role in urban mobility are encouraged to use this taxonomy to determine relevant research interests and topics that fall within our smart city mobility-related coverage.