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Overall, our Start-up and Investment Landscape Analysis (SILA) tool reveals significant investment activities in new mobility technologies—nearly $111 billion in disclosed transactions since 2010 in more than 1,000 companies across ten technology clusters (Exhibit 1). Seattle permanently closed 30 km (20 miles) of streets to most vehicles at the end of May, providing more space for people to walk and bike after the lockdown. And change can happen fast; consider how quickly people took to using their smartphones to hail cars. Long term, COVID-19 could have a sustained influence on mobility, driving changes in the macroeconomic environment, regulatory trends, technology, and consumer behavior. Companies will base new offerings on innovation and regulation. defines seamless mobility as systems incorporating the use of different kinds of transit and enabled by technologies such as intelligent traffic systems and advanced rail signaling. Eric Hannon, Colin McKerracher, Itamar Orlandi, and Surya Ramkumar, “, Overcoming pandemic fatigue: How to reenergize organizations for the long run, What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries. These developments could have implications for other places facing similar economic, demographic, and mobility trends. Governments are also expanding their favorable policies to eco-friendly travel beyond cars; for instance, Italy is offering its citizens a bonus of 500 euros for buying a bike, which has led to sold-out bike shops. In addition, cities might not repeal all of the prior restrictions on private vehicles, thus accelerating the trend toward shared mobility. The World’s Cities in 2018, United Nations, un.org. While this is an exceptional case due to high demand, a third-party evaluation found that our Mumbai-Pune Hyperloop Project could be funded 100% by private capital. Reinvent your business. Mobility’s future: an investment reality check Micro-machines: one start-up’s plan for scalable EV production Contactless delivery and mobility attracting autonomy investors Matthias Bartsch et al., “Urban planners herald end of cars in cities,” Der Spiegel International, October 10, 2019, spiegel.de. See Eric Hannon, Stefan Knupfer, Sebastian Stern, Ben Sumers, and Jan Tijs Nijssen. McKinsey Global Institute. Right now, governments around the globe are severely restricting mobility and overall lifestyle choices. Los Angeles, for example, wants to make its downtown denser and to ease congestion, so it is investing in new rail to achieve both goals. Even so, investment in light-rail and metro systems is massive. In this environment, the use of private cars or biking, walking, and shared micromobility could outpace public transport. So it’s complicated. Please use UP and DOWN arrow keys to review autocomplete results. In addition, 32 percent said they would travel by train less often (versus the 18 percent who said they would more often travel by train). But this does not appear to be happening. “Micromobility” in the form of electric scooters and shared bicycles, for example, can convert a 30-minute walk into a ten-minute ride. New players from the technology and connectivity sectors are entering the business, and the traditional auto value chain is under threat. If you would like information about this content we will be happy to work with you. Of these, walking and biking are currently the most attractive options. But huge questions remain about how technology, demographics, economics, and other factors will play out, so cities and rail operators are understandably tempted to duck the matter and delay taking action on mobility. 13 2 our use of cookies, and The authors are members of the McKinsey Center for Future Mobility. See, for example, Eric Hannon, Colin McKerracher, Itamar Orlandi, and Surya Ramkumar, “An integrated perspective on the future of mobility,” October 2016; Shannon Bouton, Eric Hannon, Stefan Knupfer, and Surya Ramkumar, “The future(s) of mobility: How cities can benefit,” June 2017; and Eric Hannon, Stefan Knupfer, Sebastian Stern, and Jan Tijs Nijssen, “The road to seamless urban mobility,” McKinsey Quarterly, January 2019. Supplier access to new customers and technology. About 40 percent of global consumers said they would fly less than before in the next normal, while only 16 percent said they would fly more often. Cost and convenience have traditionally played key deciding roles when customers choose transport modes. 72. Cities, rail operators, and other actors in the public and private sectors must work together to establish shared, specific aspirations (such as improved door-to-door travel times, air quality, access, and liveability) and lower congestion and greenhouse-gas emissions. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. collaboration with select social media and trusted analytics partners “When Uber replaces the bus: Learning from the Pinellas Suncoast Transit Authority’s ‘direct connect’ pilot,” SUMC Case Study, 2019, Shared-use Mobility Center, learn.sharedusemobilitycenter.org; “MTS & Lyft partner for ‘Transit Tuesday’ initiative,” San Diego, CA, 2019, learn.sharedusemobilitycenter.org; “Case Study: Centennial, Colorado and Lyft First/Last mile pilot project review,” August 2017, learn.sharedusemobilitycenter.org. Some automakers are leading the way in this regard by delivering new cars directly to customers’ homes. Investments across the mobility landscape First, we see continued acceleration of investments in the relevant technologies—with e-hailing, semiconductors, and sensors for advanced driving-assistance systems and autonomous driving still being the front-runners (Exhibit 1). Because virus-related trends can vary by region, the responses of mobility players and the outcomes themselves will likely differ by location as well. tab. Our flagship business publication has been defining and informing the senior-management agenda since 1964. McKinsey, which has written several reports exploring this topic, hereLearn more about cookies, Opens in new Today, one metro line can carry more than 70 times as many passengers as a city street with cars. SOURCE: McKinsey future-of -mobility consumer survey, 2018. Press enter to select and open the results on a new page. Our Mobility Value Chain model reveals current and year 2030 shared-mobility profit and revenue pools. Eric Hannon, Colin McKerracher, Itamar Orlandi, and Surya Ramkumar, “An integrated perspective on the future of mobility,” October 2016. In 2017, the mayor of Nashville, Tennessee, proposed spending up to $9 billion on a mass-transit system, including 26 miles of light rail. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Kersten Heineke is a partner in McKinsey’s Frankfurt office, Timo Möller is a senior expert in the Cologne office, Asutosh Padhi is a senior partner in the Chicago office, and Andreas Tschiesner is a senior partner in the Munich office. Operators and city leaders need to consider the impact of new technologies and to figure out how they can be integrated into mobility planning—an issue that came up in Nashville. In the past decade, the rate of mobility investments has increased nearly sixfold, and the median deal size has more than tripled. Please click "Accept" to help us improve its usefulness with additional cookies. While researchers work to develop a vaccine, with the threat of infection looming, consumers are newly refocused on health. Rail has other advantages too. McKinsey’s SILA tool reveals areas with the largest investment activity by using big data algorithms and semantic analytics. We use cookies essential for this site to function well. 14. To get started, stakeholders need to agree on where they are going. An analysis of mobility investments reveals how technologies and players are beginning to interact, and where new opportunities are starting to appear. Milan announced it will transform 35 km (about 22 miles) of streets previously used by cars to walking and cycling lanes after the lockdown. Against a backdrop of mass layoffs, disrupted travel, and public-transit ridership down 70 to 90 percent in the world’s major cities, shared mobility—and mobility in general—is struggling. We looked at ten proposed investments of more than $500 million in urban railways across the globe. He served as chief executive officer from 1998 to 2019. Cities differ among themselves, so different places will make different choices, depending in particular on population density and expected population growth. And because rail is physically separate from other transport modes, it is typically faster, particularly during rush hour. Please use UP and DOWN arrow keys to review autocomplete results. Voters rejected the plan the following year. Exhibit 1 The auto industry is facing a dynamic and potentially disruptive decade. We see this prominently in the mobility sector, with passengers largely favoring modes of transportation perceived as safer and more hygienic, such as private cars over ridesharing. The Chinese government recently extended its support for new-energy vehicles by exempting them from a 10 percent purchase tax and maintaining subsidies for Chinese-branded electric vehicles (EVs) until 2022. The case for building new rail is strong. 10. If you would like information about this content we will be happy to work with you. Whether this will have an impact on private-car ownership, affect car rentals, or allow clever shared-ownership models to prosper remains unclear. By contrast, many more people, 32 percent, said they would travel more frequently by private car, while only 13 percent said they would travel less by car. Done right, a master plan improves a system’s design while helping the public to see the value of new investments. The Singapore Land Transit Agency did not mention autonomous vehicles in its investment documents but is running a pilot program for them. 17 New technologies and mobility offerings are reshaping how we use and drive vehicles. McKinsey Center for Future Mobility, based on North America Shared Mobility Survey 2019 and analysis of third-party sources. Mobility companies like Uber and Lyft are ramping up their investments to stay competitive in the emerging e-hailing sector. With the pandemic, health considerations are more important. Many of these differences are likely to remain in the months ahead. These differences could significantly impact customer demand and available travel options, potentially making mobility truly hyperlocal. Suddenly, private cars are in, shared rides are out, and the best-laid plans of mobility players appear to be in tatters. We expect that the role of cities to foment change will only increase, as people become more interested and invested in the future of mobility. Although the specifics will vary from place to place, the following four steps can help cities and rail operators work together to shape systems toward seamless mobility. 16. Automotive suppliers can improve their margins on traditional commodity technologies by pursuing a “last man standing” strategy that can increase their market power. Deciding roles when customers choose transport modes, it is typically faster, during. More successful coupled with investments in convenient, accessible, and more transit ridership reduces to. Of scale through consolidation might help to create a digital twin of the new York Comptroller! Ohio, or allow clever shared-ownership models to prosper remains unclear least weekly usage at... Business and sales models that reflect the post-COVID-19 world, such as long-term and. 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