REINVENTING PERSONAL MOBILITY – “The Lakes” vs. “The Valley”?

Borrowing from Adam Smith, The Internet of Everything is “the dynamic engine of economic progress” of the 21st century. It boosts the benefits of “the division of labor” by the fusion of cyber physical systems and by sharing of costs and assets. As such,  it is set to spawn a new profitable personal mobility business that has the potential to create $700 billion benefits for all of us around the globe

Five Critical Building Blocks

The value proposition of this new breed of personal mobility business will evolve around five major layers with a number of critical building blocks.

First, the vehicle needs to be upgraded to make full use of its ability to connect to the outside world and to make it part of our everyday life. The starting point is a new operating and infotainment system with a user interface that is highly intuitive and allows operation with minimal distraction, and paired with personalization. Vehicle and user analytics will become key value creators for the “experience manufacturers” and feed the artificial intelligence engine that delivers contextual personalized experiences to drivers and owners. The integration with home security and automation and wearable health devices that monitor driver fitness will complete this innovation layer.

Innovation layer two integrates the vehicle with our virtual life, with the primary commercial goal of finding and getting people to virtual businesses. This includes the integration with social media, Internet search and electronic shopping and payment. The highest value for the business lies in big data analytics and the marketplace, where vehicle and user data is sold for value.

The next innovation layer perfects the capabilities of vehicles to easily find and efficiently direct people to real places. Intuitive destination and point of interest search, highly accurate maps and location, real-time navigation with traffic, weather and road risk, contextual location based services and electronic payment and guidance as to how to drive safer and more economically add value to this innovation layer.

Innovations on layer four physically gets people to real places, by integrating the vehicle into the multi-modal world of transportation with a multi-modal travel planner, including car- and ride-sharing options and mobility on demand (e.g., MyTaxi, Uber). Ultimately, autonomous vehicles will accelerate the convergence between personal and shared or public transportation and make it a viable alternative to vehicle ownership, especially for people who live in or close by large cities. The ability of businesses to pay for your trip to their branches are likely to make the lures of mobility on demand over vehicle ownership even more compelling.

The last layer of innovation integrates the value proposition with the infrastructure the vehicle uses. Pervasive network access with Wi-Fi along roads will be a differentiator in a world where all things connected congest our airwaves even more than our roads. Making it easy for people to find connected parking spaces is becoming a must-have in today’s new vehicles. Vehicles that connect to traffic lights will benefit from “eternal green light zones” and drivers will have perfect visibility at night when light intensity is calibrated between vehicle beams and smart streetlights (and save cities 30 to 50 percent in energy costs). “Hiring” a vehicle together with a dedicated lane or road in highly congested cities will be a highly attractive value proposition. With inductive charging maturing, the ability to recharge electric vehicles while driving on dedicated lanes would add more value, and also allow a reduction in the size and cost of vehicle batteries.

The Valley’s Role

The innovation leaders for most of the critical building blocks are located in “The Valley.” The additional challenge to the automotive industry and their traditional suppliers is that a number of these services are offered via “freemium” business models that are eroding business values of incumbents and creating barriers for new entrants.

“The Valley” can effectively transport three proven virtual business models into the physical world of personal transportation, which is a natural evolution of revolutionary business models.

With the value of the core product “vehicle” eroding and virtual mobility services and business models commanding a growing share of the value-add, automakers will increasingly be forced to expand their value proposition beyond the confines of the car and connect their vehicles with critical elements of the virtual mobility value chain.