From electric vehicles to autonomous taxis, cities are facing a fast and furious transformation of urban mobility

McKinsey Global Inst
McKinsey Global Institute
4 min readAug 10, 2018
“A long-exposure shot of a freeway leading into the city with red and yellow light trails” by Joey Kyber on Unsplash

New forms of shared mobility, including car sharing, e-hailing, and pooled e-hailing, have already taken off in cities around the world. We have therefore included them among the smart city applications in our projections in our most recent research, Smart cities: Digital solutions for a more livable future.

But they are merely a sign of even bigger things to come. Autonomous vehicles, once the stuff of science fiction, are now beginning to hit the road in reality. Self-driving taxis are already cruising the streets of Singapore, and they are being piloted in many other places. Flying cars and taxis are even on the horizon.

Several key trends — not only shared mobility platforms but also electric vehicles, low-cost batteries, the Internet of Things, and ultimately autonomous vehicles — are converging. As a result, urban mobility is likely to have a radically new look in just ten to 15 years.

Cities at the forefront of these trends will be able to harness these technologies to offer seamless mobility that takes people from door to door on demand, combining high-quality public transit with self-driving shared vehicles.

Photo by Anders Jacobsen on Unsplash

Electric vehicles are already gaining traction as battery prices fall and charging infrastructure is built out, and they would become more prevalent in this kind of ecosystem.

Shared vehicles are used more intensively, which improves the economics of electric vehicles — a critical development, since they could be one of the biggest keys to containing GHG emissions.

Cities might be able to maintain or reduce the total number of vehicles on the road even as populations increase. An integrated perspective on the future of mobility explores various scenarios for adoption.

Widespread adoption of autonomous vehicles will be harder to achieve in developing cities due to a variety of barriers: poor road infrastructure, the variety of vehicles and pedestrians on the road, and more chaotic traffic conditions.

The residents of higher-income cities where development has led to sprawl seem likeliest to embrace autonomous vehicles — and in fact, self-driving cars may enable further expansion of suburbs and exurbs. Dense, high-income cities seem to be the best laboratories for implementing a vision of seamless mobility across multiple modes of transportation.

Autonomous vehicles could have a bigger impact on safety than on commuting times. Our analysis suggests that they could potentially decrease road traffic fatalities by as much as 25 percent by 2025, since cameras and computers are not subject to the same kinds of distractions that cause human mistakes.

But many challenges must be addressed for autonomous vehicles to reach that potential. These include software bugs, protection from malicious hacking, liability issues, and safety, particularly as these vehicles are introduced in unpredictable real-world settings alongside human drivers and pedestrians. The net impact on commute times will likely be modest, as improvements to flow are combined with additional congestion if the public embraces this form of mobility.

Even if travel times do not decrease, however, the quality of the experience may improve if commuters do not have focus on the road but are freed to read, work, or entertain themselves. Especially when combined with sharing and electrification, autonomous vehicles stand to be a disruptive force in urban mobility.

It is impossible to predict exactly how these changes will play out and change the lives of urban residents. Much of the impact depends on private-sector innovation, ongoing technical improvements, and national or state level regulation.

But cities do not have to watch the future of mobility unfold passively. They can decide how autonomous vehicles might fit into an integrated mobility plan that includes traditional public transit and road infrastructure, perhaps bringing private-sector partners into the effort.

City leaders can also decide to push things even further by, for example, encouraging ride sharing, mandating night deliveries, or allocating dedicated lanes for autonomous cars. Individual cities will make their own choices about what kind of future to pursue. Cities on one end of the spectrum may exercise caution or resist change, while others could take bold leaps such as banning private vehicles from the urban core.

They have a wide variety of policy tools at their disposal: they can set mandates, incentives, subsidies, and standards; they can convert government fleets; and they can support the build-out of vehicle-charging infrastructure. Cities would do well to engage with the public as they map out their implementation path and address concerns regarding safety, employment, and affordability.

Ultimately, widely adopted autonomous driving technology could offer a more comfortable, pleasant, and affordable way for urban residents get from Point A to Point B — and because ubiquitous self-driving cars could operate at optimal speeds, they could eventually reduce commute times further.

Every year more than a million lives are lost globally in traffic accidents, most of them due to human error. If self-driving cars live up to their promise, they could greatly reduce those losses.

For a more detailed look at the future of smart cities, download our report, Smart cities: Digital solutions for a more livable future.

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McKinsey Global Inst
McKinsey Global Institute

The business & economics research arm of McKinsey & Company, covering topics like economics, capital markets, tech trends, & urbanization. mckinsey.com/mgi