The Mosaic of Mobility
Why the future of transportation may be greater than the sum of its parts
At the heart of global innovation, the Frontier Tech Practice at Silicon Valley Bank is seeing increasingly creative, bold and downright revolutionary transportation technology being funded and developed before our very eyes. A fundamental shift in how we move people and cargo is on the horizon, and as a result a global transportation industry that was once built on planes, trains and automobiles will never be the same.
Recently, the Frontier Tech team had a “healthy discussion” (i.e., heated debate) about which transportation technology will have the greatest impact on our future, by examining the different modes being developed as well as the specific challenges they are attempting to tackle. Will it be AV (autonomous vehicles) or VTOL (vertical takeoff and landing)? Hyperloop or hoverboards?
Fasten your seatbelt and enjoy the scenery as we take you through the highlights of the debate, from point A to point B.
Autonomous vehicles
When you ask someone what the future of transportation will look like, inevitably they’ll say that self-driving cars will be commercially available in X number of years. While the boldness of this statement has lost some of its gravitas in recent years due to how often it is overheard in Silicon Valley, the implications of autonomy are no less transformational.
Many people seem to think that a car without a driver will just replace the traditional car experience. It will — but that’s just the beginning. Autonomous vehicles will have knock-on effects that reverberate through our daily lives — obvious ones like less car ownership and more ride-sharing, as well as unforeseeable ones that no one can predict. Eventually, AV will completely change the way cities and infrastructure are built, as fleets run around-the-clock, freeing up new space for parks and housing.
Hundreds of players, big and small, are racing to carve out a niche and own a piece of this emerging industry.
The stats. Conservative estimates put distance driven by Level 4 autonomous systems at around 10 million miles. If we throw into the mix Tesla’s autopilot, which is currently a Level 2 autonomous system, that figure is closer to 1 billion miles. This doesn’t even count simulated miles — those that are virtually driven in various conditions for testing purposes.
The tech. On the hardware side, AV uses technology that has been available for many years, such as cameras and the ultrasonic sensors used for parking assistance. More-sophisticated systems like inertial navigation systems, infrared sensors, and light detection and ranging are the core of the vehicle’s ability to detect its surroundings. The car will also have dedicated short-range communication used for vehicle-to-vehicle and vehicle-to-infrastructure systems that send and receive information, allowing the car to communicate with its environment. Global positioning systems using satellite triangulation along with pre-built high-definition maps help the vehicle navigate on its own.
Some believe the most profound impact of autonomy will be on shipping and logistics.
Adoption, infrastructure and cost. One of the benefits of AV technology is that it will use existing infrastructure at the outset. The upfront costs are associated with the collection of data, and continued development of the aforementioned systems that are being tested and refined today. Overall costs to the consumer will be significantly lower than owning a car; and once the technology has proven itself and people weigh the benefits, adoption will likely be swift.
Personal electric transportation
Personal electric transport (PET) is a commuter’s dream — fast, convenient, cheap and eco-friendly. This technology includes everything from electric scooters, to skateboards, to those one-wheeled planks you occasionally see the daring commuter riding.
It may be difficult to imagine how electric scooters and skateboards can affect our lives that drastically, but consider that 3.5 billion people around the globe live in cities — and the United Nations says that population will double by 2050. Growing urban density is resulting in more “megacities” — those having a population greater than 10 million; and by 2030, there will be 43 megacities around the world. The problems with microtransportation in urban areas will only get worse if nothing is done to innovate urban transport, and this innovation will affect most people on earth.
The stats. As companies in this space expand to large cities globally, the massive addressable market is enough to mint a few more unicorns, and serious investors are along for the ride. It’s easy to see why, as 60 percent of daily trips in the United States are less than 5 miles, and PET solves this pain point perfectly. Electric scooter company Lime recently received $335 million from Uber and Google, while its competitor Bird has raised $115 million at a $2 billion valuation. Talk about electrifying: Those numbers are impressive, especially considering that these two companies are both less than two years old.
PET companies and their sources of funding
The tech. As the name would imply, this technology centers around electric motors and battery technology, which is steadily improving. Personal electric vehicles are not just for the first and last mile, either, as current products on the market have a range of 20-plus miles. Other companies are using regenerative braking and centrifugal force for electric assist, both of which help extend battery life. As the hardware improves, form factors and use cases will become more broad, unique and impactful.
Adoption, infrastructure and cost. This technology uses existing infrastructure, and the cost to ride is extremely low — currently only 15 cents per mile — which will likely decrease as competition heats up and next-gen scooters with greater durability increase the lifetime value. Adoption will be very specific: individuals in densely populated areas who need a quick, cost-effective mode of transportation over a short distance.
Long-distance and mass transportation
Already, these two words carry a certain connotation for most people — rarely is a rush-hour bus ride pleasurable. There is a lot of room for improvement here, which is why these new technologies have the potential to make a huge impact, as they could revolutionize the way we travel over long distances.
The stats. The technology behind Hyperloop will be able to get you from San Francisco to Los Angeles in 30 minutes; new supersonic jets to be built by Boom will get you from New York to London in two hours. If Elon Musk has his way, SpaceX’s rockets will be able to get you from New York to London in 29 minutes, which is nearly identical to the average commute time in California.
The tech. The technology of Hyperloop outlined in SpaceX’s alpha paper uses linear electric motors and magnetic levitation or air bearings to propel a podlike vehicle in near-vacuum steel tubes up to speeds of 760 miles per hour. Musk’s Boring Company, which is working on massive tunnel-based intracity transport systems that propel around high-speed electromagnetic sleds, will rely on similar principles to move people and goods underground in urban areas. On the other hand, airline startup Boom plans to use tried-and-true turbine jet engines with advanced aerodynamics to get you across the pond faster than the speed of sound.
Adoption, infrastructure and cost. Just like with AV, adoption will be swift once the tech is proven. The one downside here is the upfront infrastructure cost and the capital-intensive nature to develop these projects. Moreover, this long-distance mode of transportation touches multiple jurisdictions and will require coordination and collaboration among various public- and private-sector agencies from cities, counties, states and even countries — all of which may have differing goals, needs and budgets. The tech will also have a significant impact on the logistics industry. If you didn’t already believe that Amazon’s corporate plan is no less than total world domination, they’re allegedly looking into the technology behind Hyperloop to make sure your Prime delivery arrives at your doorstep in less than 30 minutes from the moment you hit “Buy Now with 1 Click”!
Unmanned aerial vehicles and vertical takeoff and landing
While some companies are developing this technology for human transportation, others are disrupting the logistics supply chain by building unmanned cargo air vehicles designed to deliver goods. Industry titans like Amazon, DHL and Boeing are all developing unmanned aerial vehicles for logistics.
The stats. At least 20 companies are producing and testing electric VTOL aircraft today, running the gamut from startups like Kitty Hawk and Joby Aviation to large legacy aerospace players like Boeing and Airbus. It is expected that by 2020 there will be about 7 million small unmanned aircraft airborne at any given moment, 37 percent of which will be involved in commercial operations. Uber plans to commercially deploy a form of VTOL for human transportation by 2023.
The tech. The tech for VTOL builds on basic drone technology — powerful electric motors that spin fan blades to produce lift. It would be wrong to think of these aircraft as just scaled-up drones with seats, however, as prototypes today are equipped with very sophisticated hardware and software. Some believe that the unit economics of these aircraft imply that most of them will have to be fully autonomous, borrowing sensor, communication and mapping technologies used in ground-based autonomy.
Adoption, infrastructure and cost. It’s hard to say how the public will adapt to traveling in VTOL vehicles. It will probably resemble the binary nature of electric scooters: You either love them or you hate them. Although people are generally attracted to the idea, many of those same people don’t particularly like the prospect of getting in an autonomous car, much less one that flies. The key infrastructure aspects of VTOL vehicles are the systems and regulatory framework, which are still being developed today. Costs are likely to be high at first, but, as with AV, they will gradually come down over time.
Conclusion
We’ve arrived at our destination, and while you may have a favorite in mind, it would be premature to pick a single winner in this race. After the team’s lively debate, it became clear that these innovations are part of a much bigger picture. Each one of these technologies represents a node in a wide interdependent network of movement, and each plays an important role, from microtransportation, to shipping and logistics, to fast long-distance transportation.
It is important to understand that this race is not about a winner. As horsepower makes way for high tech, the real transformation is in the growing diversity of unique and meaningful solutions being developed across all modes of transportation — all of which will work together to make your commute a bit shorter and your life a bit easier. With the huge amount of work being done to push these incredible technologies forward, Detroit should pay attention. The Motor City of the future may just be tucked away in Silicon Valley.
