Mobility in the 20s: COVID, Cities and the Digitization of Transportation
One year after closing our second fund, here’s how Maniv Mobility is thinking about mobility investing amid the Coronavirus pandemic.
“Mike invests in self-driving cars.” That is the short-hand way in which I have often been introduced in various settings over the last few years. As the poet Alexander Pope observed, “Tis but a part we see, and not the whole.”
In 1908, Ford launched the Model T, and for 100 years the individually owned-and-operated, internal-combustion-engine vehicle dominated. Every several years a family would buy an all-in-one mobility provider — a vehicle designed to serve for the quick errand, the daily commute, the annual road trip, and all other transportation needs.
In 2008, when the financial crisis threw the auto industry into turmoil, the real threat to its dominance arrived in a much quieter form — in the advent of third-party apps on our smartphones. Soon after came Waze and Uber and Moovit and Bird and Lime and more.
The era of digital mobility enables a thousand flowers to bloom across vehicle types, ownership and sharing schemes, business models, and more allowing consumers to purchase mobility as a service, right-sized for the particular trip — or sets of trips — at hand.
When we began investing out of our first fund about four years ago, conventional wisdom held that the world would glide seamlessly from a world of manually operated vehicles to one in which self-driving cars dominated, many predicting that robotic taxis — “Uber without the driver” — would dot our cities before 2021.
While we never invested based on the premise that autonomous vehicles would bring rapid, disruptive, and singular change, we have always seen them as a part of the future. Several of our companies were born amidst the self-driving hype but built in the versatility to last for the long haul.
Cognata, for example, develops simulation to test automated driving systems, which are relevant both to higher and lower levels of automation; Brodmann17 too is focused on bringing lifesaving ADAS functionality to every car as “Level 4” startups continue to consolidate; Phantom Auto’s proprietary teleoperation technology allows human drivers to intervene remotely if a self-driving car faces a situation it can’t resolve, but also is highly relevant to logistics applications and autonomous delivery bots like those from Postmates, and Hailo is developing high-performance, energy-efficient chips to meet the requirements of cars that will need to rely on high-performance on-board, edge computing, whether they are designed for full automation or not.
Our first fund portfolio also included many companies working on the theme of vehicle connectivity and its ability to secure and leverage data flowing to or from individual vehicles or fleets for a wide range of use cases (Autofleet, Aurora Labs, C2A, Nexar, Otonomo, and Upstream). These companies continue to iterate on their offerings and are largely agnostic to the delay in more highly automated vehicles.
Many of our second fund investments have been focused less on the deep digital technologies that characterize many of the Israel-based startups of our first fund, and more on innovations around business models that take them — literally — where the rubber meets the road and closer to the consumer.
One of the megatrends underlying many of these investments has been urbanization and the density that comes with more people living in cities. Over the first two decades of the 21st century, urbanization has increased on every continent. One could have imagined that the first generation to be digitally connected at all times would be less sensitive to distance, but in fact, the trend has been the opposite. Young people are choosing to live more densely from Shanghai to New York to Sao Paulo to where we sit in Tel Aviv.
Halfway through 2020, the obvious question to ask is how this and other trends may be affected by COVID. Already, a nearly global consensus seems to have emerged that working remotely is more practical than had been thought. Will that fact, combined with the dangers of density associated with the virus, reverse urbanization? Will it encourage more open-air forms of mobility like bikes, scooters, and mopeds?
We believe the answers will be mixed and will vary as time passes. And we also believe that, even if the pace of urbanization slows for a year or two, the forces that inspire people to live more densely are too entrenched to be reversed.
Increased urbanization, and the congestion, emissions, and economics that accompany it, make car ownership less desirable. Half of all car trips, and most of those within cities, are distances of three miles or less. In the last few years, the voracious appetite of tech-savvy young city-dwellers for alternatives was revealed most dramatically in the explosion of micromobility options — shared bikes, kick scooters, and electric mopeds like those from Revel. The COVID crisis accelerates that trend — even if some cities are momentarily less dense. And for those who want the convenience of their own car, without many of the burdens of ownership, car subscriptions, like those offered by Bipi, allow turnkey, quick access to cars for variable periods.
Food delivery couriers, and other urban, last-mile service providers, find that electric bikes (and electric-assist bikes), such as those provided by Bolt Bikes, are optimal for the task, enabling gig workers to be far more efficient in their tasks, ultimately improving gig worker retention. Others are deploying autonomous delivery robots to deliver packages, pizza, and more. All of these things have become more essential than ever in the era of COVID, and as with remote work, we expect some of these consumer habits to persist long after the crisis.
Over the last year or so, I have often reflected on the “parallel experiment” playing out over 200 cities around the world, where micromobility vehicles have been deployed, predicting that one would take a bold response to the entrance of light vehicles, and that would be a watershed moment. (I have often conjectured that if Mike Bloomberg were still mayor of NYC he would already have designated an uptown and a downtown avenue to be exclusively for pedestrians, cyclists, and zero-emission vehicles under 500lbs).
Could it be that COVID is the stimulant to bring about such bold measures? It is seeming increasingly possible. The desire of residents to seek relief from stay-at-home orders, to get fresh air, and to exercise has been one driver. The realization of just what a difference the cessation of vehicular traffic can make to the quality of air is another. (In Israel, where no one drives each year on Yom Kippur, we already have a taste of this, but now this experiment has been played out on a global scale, over a much longer period.)
In Seattle, the city has announced it is permanently shuttering 20 miles of roadways to cars. Milan has designated 22 miles of roadway to be free from vehicles. Paris, which was already well on its way to being the most progressive major city in the West on mobility policy, is seeking to create 650 kilometers of cycleways. Oakland, London, Dublin, Melbourne, and other cities are following suit, including even New York. The pandemic has forced cities to rethink how they view transportation and create scalable ways to accommodate mobility needs in uncertain times — all while ensuring proper safety standards.
A classic pair of pictures shows Fifth Avenue in Manhattan at the turn of the 20th century and just over a decade hence. Over the century that followed, the only thing that meaningfully changed about that picture was the style of the cars. While COVID has thrown the world a tremendous dose of uncertainty, at Maniv we hold tight to the belief that in this decade, that picture will change more dramatically than it has in all those decades. That change will be driven by creative entrepreneurs of all types. And we continue to be passionate about the chance to seek them out and go along for the ride.
Maniv Mobility was born from an enthusiasm to back great entrepreneurs in the business of digitizing transportation. And this hasn’t changed. So yes, Maniv continues to invest in “self-driving cars,” and we do believe they will impact mobility patterns meaningfully within the current decade. But we also believe that increased mindshare will continue to be devoted to the competition among cities globally to arrange themselves to best accommodate the plethora of new options that digital mobility is offering up to their citizens.
And so Maniv looks forward to continuing to find passionate, creative and versatile entrepreneurs who see opportunities emerging from the application of digital technologies to transportation, whether it applies itself to electric vehicles of all shapes and sizes that help clean the air of our cities, or to connectivity that enables the seamless synchronization of multimodal mobility, or to greater automation of mobility and the added safety, cost benefits and convenience that can bring, or more. While our focus is exclusively mobility, we are geographically agnostic — in the last year, we have made investments on four continents. So wherever you are, if you have a great idea to help better move people and things around, please find us here!
