Industry Research

The Mega-Trends That Will Define Your Service

Martin Romjue
Posted on March 10, 2020

A "hot seat" panel of ground transportation experts hosted by then-LCT publisher Sara Eastwood-Richardson tackled the industry's future Nov. 5, 2019 during LCT Show East in Altantic City, N.J. (LCT file photo)

A "hot seat" panel of ground transportation experts hosted by then-LCT publisher Sara Eastwood-Richardson tackled the industry's future Nov. 5, 2019 during LCT Show East in Altantic City, N.J. (LCT file photo)

ATLANTIC CITY, N.J. — The term mobility may be broad and as yet not fully defined, but it’s certain to affect passengers and operators in different ways.

For passengers, it means they will have more options for getting around in the coming years. For luxury ground transportation operators, it means their businesses and services can never stand still if they want to survive.

A recent panel at the November 2019 LCT East addressed how ground transportation will transform and evolve on the local, national, and global levels, and how today’s limo-chauffeured-shuttle-bus operator fits into the new people moving scenario.

LCT Publisher Sara Eastwood-Richardson hosted a look at the future of ground transportation at the LCT East Show, Nov. 5, 2019, in Atlantic City, N.J. (LCT photo)

LCT Publisher Sara Eastwood-Richardson hosted a look at the future of ground transportation at the LCT East Show, Nov. 5, 2019, in Atlantic City, N.J. (LCT photo)

Expert Roster

Hosted by then-LCT publisher Sara Eastwood-Richardson, the group included the following ground transportation experts:

  • Glenn Cook, owner of Lake Nona Transportation and EV Transports in Orlando, Fla., and a board director of the Orlando Limousine Association. He works closely with the Florida Autonomous Vehicle Program where he collaborates with the city and the University of Central Florida on an R&D program to look at what an electrified autonomous vehicle ecosystem might look like in the future.
  • Matt Daus, transportation technology chair at City University of New York, CUNY, Transportation Research Center of the City College of New York where he conducts research and continues to be published as an expert on ground transportation regulation and technology. Daus is president of the International Association of Transportation Regulators (IATR). He’s also the former chairman of the New York Taxi & Limousine Commission, the longest-serving leader in that role.
  • Chris Jones of Canalys Research, a world-renowned company in the technology space that analyzes mobility and transportation trends.
  • Adam Parken, global communications director with Blacklane, an app-based global luxury ground transportation service based in Berlin, Germany.

Data Driving

The discussion started with a look at Cook’s company which has worked on an R&D project during 2019 with the University of Central Florida where it used five of its Tesla Model 3s and a Model X to test out autonomy systems while carrying passengers and then recording the data. Chauffeurs would ask passengers if they would like to see it in action and then would engage it if they agreed. The Florida Legislature had passed a bill allowing the legal transport of passengers at different levels of autonomy.

The R&D program at the University of Central Florida analyzes the APIs of the Teslas to develop an artificial intelligence structure that creates a “neuronet” that helps the vehicles get smarter, Cook said. “You can program your final destination into this system and it gives it a longitudinal-latitudinal address. That vehicle will merge around vehicles, overtake vehicles, and take on and off interstate ramps as it takes you to your final destination.”

Charging stations ranging from 50 to 350 kilowatts can be sustained by solar panels that also charge battery packs for cloudy days, Cook explained. Central Florida has five supercharging stations and plans to develop four more by July 2020. “The recharge mobility hubs will become our own ecosystem and it will have charging stations that are sustainable.” Across the U.S., Tesla can connect drivers to charging stations for recharging along their routes to avoid range anxiety.

An electric vehicle has about 100 moving parts, compared to 1,000 in a combustion engine, Cook said. “That's 900 opportunities of failure you can possibly have. Less opportunities for failure means more sustainability and zero emissions. They are designed to travel 500,000 to one million miles with minimal maintenance, such as tires and windshield wiper blades.

A full electric charge for a Tesla costs about $17 compared to a $55 full tank of gas or diesel for a convention vehicle, Cook said. The battery structure in a Tesla can be charged in about 30 to 40 minutes.

Overall, more future vehicles are likely to be electric as their efficiency, charging accesses, and economies of scale improve.

Canalys Research analyst Chris Jones looks at how urbanization will influence mobility. (LCT file photo)

Canalys Research analyst Chris Jones looks at how urbanization will influence mobility. (LCT file photo)

Connecting Electric Vehicles

Electric vehicles will help create connected, autonomous shared ride services, which will require more such vehicles coming to market, Jones said.

Car sales have declined worldwide in every mature automotive market, as younger people move to mega-cities where jobs are. “Fewer people are getting a license when they turn 16, 17, or 18, depending on the country. There are different ways of getting around now, whether it's ride-hailing, car-sharing, bikes, scooters, etc. Owning a vehicle as a young person in the city is not necessarily the thing you go out and want to do.”

Mobility, on-demand, and safety all intersect, Jones said.

There are still 1.25 million deaths globally on the road, with 35,000 to 40,000 per year in the U.S., Jones said. “That's a big strategy around autonomous to move from driver assistance to a high level of vehicle operating the cars to increase the safety on the roads.”

Connected cars that efficiently use technology to get around can reduce pollution and congestion, Jones said.

“There are more than 20 different carmakers now that have almost the equivalent of autopilot,” he said, defining it as “adaptive cruise control and lane-keep assist working together in level two autonomy.” About 10% of vehicles sold in the U.S. now have it. The autonomy levels are being developed toward Level 5 where the vehicle has no steering wheel or driver and the passengers can completely disengage from the traffic around them, allowing time to work, sleep, or spend time with personal electronic devices, Jones said. The closest to that reality now is Level 4 shuttles traveling on simple set pathways carrying eight to 15 people.

Carmakers and technology companies are racing to bring these vehicles to market as developers realize an autonomous vehicle must be a compelling experience to be accepted by society in addition to the safety rationale. Jones underscored the manufacturers and technicians still have a long way to go with their R&D.

Chauffeurs Here To Stay

While autonomous vehicles will take time to dominate the market, the role of the chauffeur will actually increase in a more autonomous world, said Parken of Blacklane.

“Chauffeuring is a service mindset that means taking care of guests and figuring out how to best meet their needs. It's knowing the local area better than just about anybody. In an international context, we find chauffeurs are often cultural ambassadors. They can inform guests about customs, holidays, traditions, and what you need to know about them. They're full of service ideas and recommendations and we don't think that will change at all.”

Parken added there could be a need for personal security. “Chauffeurs could certainly walk people longer distances if they don't have to park the car. If they can get out of the car and the car drives and parks itself, then chauffeurs could be personal assistants to get people.”

While the vehicle parks, the chauffeur also could greet the client at the airline gate and help them through the airport, just like a personal assistant. “So the role of the chauffeur will evolve regardless of the timing of the technology,” Parken said. “But we are absolutely convinced chauffeurs will have a role to play in an autonomous world.”

What’s more, the vehicles will need to be properly maintained and kept in good working order, requiring maintenance workers and cleaners, Parken said.

Adam Parken, global communications director for Blacklane. (photo: Blacklane)

Adam Parken, global communications director for Blacklane. (photo: Blacklane)

Simpler Pricing

A major part of the transition to a smarter ground transportation world will be inclusive and transparent pricing, also known as all-in, Parken said. Some hotel chains are being sued by attorney generals because of add-on resort fees and drip pricing. “This is something that happens in car services as well. I don't know how each of you price your services, but certainly there are some players in this space that have a base fare. Then there's an extra fee for the airport pickup, airport parking, a surface transportation charge, an administration fee, and a safety assurance fee. And, and, and. There are all kinds of fees ground transportation, whether it's chauffeur, taxi, or ride-hailing, may put in there.”

While guests understand such costs need to be covered, the fares showing up differently on search engines causes much confusion, he said. “Think about a business traveler who has the permission to book a $100 chauffeured transfer, but that same traveler may not have permission to book a $150 or $160 airport transfer, which is what the final cost would be after the fares or fees.” The first price you see is the final price you pay at Blacklane, Parken added.

Blacklane Benefits

Promoting sustainability is another effort Blacklane works toward by offsetting its carbon emissions for every ride until fleets can be emissions-free. The challenge remains in finding enough larger, luxury vehicles beyond Teslas that are emissions-free, he said.

Parken emphasized Blacklane is best used for airport transfers and scheduled rides over longer distances. Riders can complement Blacklane transportation with Uber, Lyft, or taxis for shorter urban hops.

“If you're landing in a hotel or airport at six o'clock at night and going straight to your hotel, maybe a taxi or ride-hailing is fine. But if you're landing in an airport and then going straight to a meeting where you need to focus and be prepared, the last thing a company wants is for the employee to be standing in a line for a taxi or having to order something right away and wondering what the price may be in the moment. They just want the employee to be able to walk and go straight to the meeting.”

New Rules For The Road

Daus foresees a growing need for “multi-modal integration,” or various transportation types that combine and complement each other so riders can seamlessly use one to another when traversing urban areas. Older and younger people alike will continue to move to cities as part of global urbanization, Daus said.

“I think to predict the future you have to look at what the extent of regulations are, the governance model, who will be controlling the data, who will be making these decisions?” Among automakers, “the technology is there, it's getting there, but they don't really have a business model,” Daus said.

To accommodate more intelligent forms of ground transportation, a raft of regulatory agencies at the federal and state levels will need to coordinate on standards and ground rules, he said.

“The lack of leadership and governance will prevent automation from happening at Level Four and Five in cities for another 20 years unless somebody takes leadership. So the industry can get its act together, but the government will have to make the decisions.”

Limo service will still exist because clients will always want high-end vehicles, Daus said. “Even if there's no driver, they'll become a concierge. There will be some role that will be played to provide extra perks and benefits. I also think as we get closer to Level Four and Five, vehicles will become safer. I think insurance premiums will go down and I think there could be some benefits before we get there for the industry.”

The TNCs in their drive to become profitable will try to pursue higher-end services with analytics-driven duty-of-care and statistically how they can reduce risk and improve safety, Daus predicted.

“They’re going to walk into the executive's office for Goldman Sachs and say, 'you know what? We've been servicing you guys for the last three years. Here's the analytics. Nobody got killed. We saved you this amount of money. Get rid of everybody else. Get rid of the five or six limo companies you have. Get rid of your travel manager. We'll automate the whole thing.’ This is coming because it has to. They must do this.”

While Daus said the California passage of AB5 narrowing the definition of independent contractors will force TNCs to raise their rates, it will also apply to taxis and smaller limousine companies who might be put out of business, Daus warned. “There will be a lot of shrinkage in this industry if this thing doesn't get reversed on referendum.” He forecast more mergers and acquisitions throughout the industry as bigger companies try to compete for client business with Uber and Lyft.

While proms, weddings, luxury VIP trips, and corporate clients are safe for the time being, Daus said, the challenge lies with the non-luxury B2B clients. There will also be a great opportunity for luxury operators in non-emergency medical ground transportation and Medicare-related services.

Daus also predicted lower insurance rates as driver and accident liability will fall as AI takes root. While technology product liability will rise, it will decline for auto manufacturers and ground transportation providers.

“The chances for things going wrong are slim compared to many years ago. So the manufacturer's liability and insurance are really where it will be. Insurance costs will be reduced significantly because you're not looking at a driver and their frailties and bad driving record anymore.” With vehicles increasingly able to take control and avoid accidents, “ultimately we will have different premium structures and cheaper insurance before we get to take the driver out.”

Related Topics: 2019 LCT East, artificial intelligence, autonomous vehicles, industry education, industry regulations, industry trends, LCT Events Education Series, Matt Daus, research and trends, Sara Eastwood-Richardson, self-driving vehicles

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