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An Intelligent Urban Transportation Ecosystem for China

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We are pleased to share with you a report titled: An Intelligent Urban Transportation Ecosystem for China. This new report is the product of a collaboration between Gao Feng Advisory Company and our partners at the Massachusetts Institute of Technology Media Lab. The core mission of the MIT Media Lab is to design technologies to create a better future.

China’s cities have been the engines powering its rapacious economic growth. Since 1978, China’s urban population has risen from about 18% to over 53% today, and by 2025 about two-thirds of Chinese citizens will live in cities. The 35 largest cities in China recently contributed just under half of China’s overall GDP. However, the wealth accumulated in China’s cities has come at the price of livability. Many cities are struggling with paralyzing gridlock, dangerous air quality, and widening income disparity. There is a growing recognition that the current formula for development is unsustainable, and a more balanced model is being sought.

It is precisely this set of conditions that make China the most likely platform for incubating and commercializing the innovative technologies to serve the "smart cities" of the 21st Century. After several decades of advances in the world of mobile connectivity, big data and social networks, technology is now making the commercialization of smart city transportation solutions feasible. A new “ecosystem approach” must be envisioned to deliver sustainable urban mobility. Such a system should evolve beyond conventional solutions such as private vehicles with electric power trains or bus-rapid transit. This “systems" approach instead focuses on utilizing new technologies, urban strategies, and progressive public policies to create an intermodal and interoperable mobility network that combines existing mobility systems (such as mass transit) with creative new mobility systems.

In this paper, we describe the vision and key elements of an Autonomous Mobility-on-Demand (A-MoD) System, and how a collaborative effort among Academia, Industry and Government can be leveraged to deploy a sustainable urban transportation system in China.

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An Intelligent Urban Transportation Ecosystem for China

  1. 1. An Intelligent Urban Transportation Ecosystem for China Bill Russo Chee-Kiang Lim Kent Larson Ryan C.C. Chin
  2. 2. Gao Feng Advisory Company An Intelligent Urban Transportation Ecosystem for China China’s cities have been the engines powering its rapacious economic growth. Since 1978, China’s urban population share has risen from 17.9% to 53.2% in 2013. Rapid, large-scale urbanization and the accompanying rise of the urban middle class population are among the major forces that have propelled the economy forward. This urbanization momentum will continue, on a size and scale never before experienced in history. By 2025, 65% of Chinese citizens will live in urban population centers, many of which have high-density cores. To underscore the economic impact of urbanization, the 35 largest cities in China contributed just under half of China’s GDP in 2013 1) – and this intensity should increase as China continues its relentless pace of urbanization. As GDP growth moderates going forward, a new pattern will emerge where these cities will compete even harder with one another for the human and investment capital needed to sustain their economic development. Beneath towering skyscrapers and surrounded by gleaming new infrastructure, this newfound wealth accumulated in China’s cities has come at the price of livability. Many of China’s cities are now coping with hazardous air quality, paralyzing gridlock, and widening income disparity. There is a growing recognition that the existing formula for development is unsustainable, and cities are now faced with the challenge of how to balance economic growth with livability. It is precisely such conditions that make China the most likely platform for incubating and commercializing the 2 innovative technologies that will serve the “smart cities” of the 21st century. China is already the world's largest automotive market, and the market with the largest number of both internet and "smart phone" users. China's urban transportation challenge, the high rate of adoption of connected mobile devices, combined with the rapid and aggressive introduction of alternative mobility and vehicle ownership concepts from new entrants, will ultimately compress the time needed to commercialize smart city transportation solutions. After over 20 years of advances in the world of mobile connectivity, big data and social networks, technology is now making the commercialization of smart city transportation solutions feasible – and offering cities a economic development strategy of making them “smarter”. The concept of a smart city is about leveraging technology to improve how residents live, work and play by optimizing the use of resources in a sustainable manner. For example, the vision for the 21st Century smart city urban transportation model may require a migration away from individual car ownership (~5% utilization rate) toward on-demand mobility services (> 60% utilization rate). Besides offering a more sustainable economic development model, the innovations needed to build smart cities will seed the development of new industries that will eventually become the pillars of growth for the cities’ next phase of development, and catalyze the backbone innovations needed in tomorrow’s knowledge-based economy. 1) http://www.tealeafnation.com/2014/03/map-half-of-chinas-gdp-comes-from-major-cities/
  3. 3. Gao Feng Advisory Company 3 Context for Sustainable Urban Mobility In designing a sustainable urban mobility system of the future, one has to consider how city dwellers aspirations are evolving. The hassle of car ownership in China will continue to escalate as more cities impose license plate restrictions, parking spaces become scarcer, and congestion worsens. Yet, demand for urban mobility can only increase, as residents commute longer distances within expanding city boundaries, and rising affluence fuels the desire for more leisure travel. This demand will be met in part by mass transit systems that are under construction, but “last mile connectivity” will continue to be an unaddressed gap. The widespread adoption of digital technologies like smart phones paves the way to resolve the paradox of rising demand for mobility coupled with a lower appetite for car ownership. It enables traditional mobility platforms and services to become more efficient and customized. A new “ecosystem approach” must be envisioned to deliver sustainable urban mobility. Such a system should evolve beyond conventional solutions such as private vehicles with electric powertrains or bus-rapid transit. This "systems" approach instead focuses on utilizing new technologies, urban strategies, and progressive public policies to create an intermodal and interoperable mobility network that combines existing mobility systems (such as mass transit) with creative new mobility systems. We envision a new city urban mobility network that consists of a fleet of shared electric vehicles (EVs) capable of autonomous “pick-up” and “drop-off”. Users can either walk to a nearby charging station to pick-up a shared EV, or a vehicle can be autonomously delivered to the customer. Users can then drop-off the vehicle at any desired location for either recharging or be picked up by the next user. We call this new concept an Autonomous Mobility-on- Demand System (A-MoD), which consists of the following core elements (See Exhibit 1). An Intelligent Urban Transportation Ecosystem for China The Vision
  4. 4. Gao Feng Advisory Company 4 Exhibit 1 Key Elements of an Autonomous Mobility-on-Demand System Shared – New ownership and use models that allow the sharing of EVs in a point-to-point fashion will allow the maximum utilization of the vehicle (upwards of 80% vs. 5-7% for non-share vehicles), as well as much higher utilization of parking space in densely crowded streets. Point-to-point travel – known as “one-way rental – provides users with a solution to the "first and last mile problem" of public transit. For example, users can pick-up a vehicle near their home and drop-off the EV at a subway station, then continue the rest of their trip using public transit before walking the last block to their final Electric – Vehicles designed with an all- electric in-wheel motor drivetrain will provide the highest levels of energy efficiency (nearing 90%) that allow the transmission of power from on-board battery storage directly to each wheel. The coupling of an all-electric drivetrain and by-wire controls which reduce the need for mechanical linkages provides an ultra-lightweight platform to further improve fuel-economy – up to 85 kilometers per liter (energy equivalence) for a four-wheeled two-passenger vehicle, or up to 170 kilometers per liter for a single occupant two or three-wheeled vehicle. An Intelligent Urban Transportation Ecosystem for China Source: Emilio Frazzoli, Ryan Chin
  5. 5. Gao Feng Advisory Company destination. This will dramatically reduce the need to own a private gasoline- powered automobile, helping to alleviate congestion and pollution. Studies have shown that the introduction of every shared vehicle reduces the need for up to 20 vehicles. Finally, the financial barriers, in terms of capital expense to electric and/or autonomous vehicles, will be dramatically reduced by vehicle sharing, since the cost will be borne by many users. Autonomous – Self-driving technologies are now readily available as evidenced by the efforts by many universities (e.g., MIT, Stanford, and Carnegie Mellon), automotive companies (e.g., Ford, GM, Toyota, and Audi,), and technology companies (e.g., Google and Uber). These technologies offer the potential to fundamentally change passenger and goods movement in cities by dramatically improving safety via vehicle-to-vehicle autonomous communication; to improve traffic flow with synchronized and collaborative movement; and to provide freedom of movement to those, like the disabled or elderly, unable to safely drive themselves. The combination of these benefits yields secondary benefits such as the ability to lower the weight of the vehicle due to lower (or zero) risk for collisions. This can be implemented in a phased manner. The first phase consists of autonomous pick-up and drop-off where the users will then drive the vehicle themselves, but then release the car after drop-off for the next user. This helps to solve the problems of parking and redistribution (the most expensive 5 operational cost of a shared vehicle network). An autonomous pick-up and drop-off pilot run by MIT has already been demonstrated on the campus of National University in Singapore. This golf-cart based pilot can be easily adopted for new EVs designed specifically for sharing in the city environment. We envision that the ability to embed sensors and actuators for autonomy within the design of a new vehicle – rather than retrofitting existing ones – will provide new opportunities for reliable and affordable driverless vehicles. The second phase can then move to a fully autonomous operation, where the users do not drive at all. This can be deployed once pilot studies on autonomous pick-up and drop- off have been successfully completed. An Intelligent Urban Transportation Ecosystem for China The ecosystem approach will require an urban strategy that considers existing patterns of movement for the current road and rail networks for both public and private transportation within the city. The goal is to create an urban mobility network that promotes the shift from high- to low-energy modes of transportation. Such an urban strategy includes the following components: Urban Big Data – Utilize Big Data analytics to discover patterns of movement at a fine-grain level not possible using traditional transportation planning data sets. Data sets from cell phone usage, financial transactions, and Urban Strategy
  6. 6. Gao Feng Advisory Company other forms of location-based data in combination with conventional O-D (Origin-Destination) matrices will provide design parameters for not only the initial design of the mobility system (number of vehicles, location of stations, number of vehicles per station), but also for how the system will change and grow over time. Big Data techniques will also be used to optimize routes, to maximize utilization of vehicles and parking spaces, to coordinate with public transit, to maximize efficiency of charging schemes, and for the maintenance and servicing of vehicles. First and Last Mile Solution – Taking the city congestion problem as a whole, we believe that the creation of an intermodal transportation network is the best urban strategy for maximizing public transit ridership, shifting users from high- energy modes, such as private gasoline- powered automobiles, to low-energy modes like walking and bicycling. Studies have shown that the main reason public transit is not used more often is connecting users the "first and last" mile to public transit. Often this distance is too far to walk for most users, especially in inclement weather, and extremely challenging for disabled or elderly users. An A-MoD system effectively expands the radius of operation for public transit systems. For example, users less than 500 meters from a transit node can walk (lowest energy mode), while users less than 1000 meters from a transit node can use a shared-bicycle, and those at distances greater than 1000 meters can utilize a shared EV. 6 Charging Network – The charging network will be designed to serve as many potential users as possible by strategically placing charging stations to maximize access to mass transit nodes. In places where mass transit is inadequate, other considerations come into play, such as urban landmarks, available parking, or public space. The charging stations will be designed as a multi-modal access points with multi- vehicle charging capability. An ecosystem of shared EVs (including electric bicycles, scooters, and three- wheelers and four-wheelers, such as the CityCar 2) and E-taxis) can be electrically charged at any point in the network. The overall system design will consider the location, size, and vehicle variety at each charging station. The network will also consider the latest charging technologies (conductive-wire, inductive-wireless, magnetic resonance coupling-wireless), as well as smart charging management systems. In addition to providing charging points to distribute electrical power to vehicles, this project will also explore the benefits of vehicle-to-grid charging (V2G) - the ability to discharge power from the vehicle back to the grid for the benefit of city utilities. An Intelligent Urban Transportation Ecosystem for China 2) The CityCar is a foldable, electric, sharable, two-passenger vehicle for crowded cities. Wheel Robots—fully modular in-wheel electric motors—integrate drive motors, suspension, braking, and steering inside the hub-space of the wheel. This drive-by-wire system requires only data, power, and mechanical connection to the chassis. With over 80 degrees of steering freedom, Wheel Robots enable a zero-turn radius; they also enable the CityCar to fold by eliminating the gasoline-powered engine and drive-train.
  7. 7. Gao Feng Advisory Company 7 Realizing the Vision: A Collaborative Effort A successful implementation of this vision will require the cooperation and trust between all major collaborators, including industrial, academic, and governmental institutions, as no single organization can solve these problems alone. Recent developments have shown that solutions focused on only technology, new business models, or public policy have only limited (if any) impact. For example, the automobile industry has struggled with the electrification of automobiles (technological approach) because of costs for battery technology as well as the lack of charging infrastructure (policy approach). Another example is the recent bankruptcy of Project Better Place of Israel, which employed battery-swapping stations (a business model approach). An integrated systems approach, such as the A-MoD System, must be employed in the organizational structure of such a project. A collaborative effort among the following organizations will be the only way to ensure success: Academic – A consortium of Chinese and foreign academic research institutions will provide new visions and mobility concepts based on cutting-edge technologies developed at universities, as well as on new urban strategies, urban and architectural design, advanced manufacturing, logistics, and operations research. Industry – Multi-national, national, and local corporate and industrial partners will bring in the ability to execute the manufacturing of new products such as electric vehicles, charging infrastructure, and autonomous driving. They will also be key to the deployment of new mobility services such as fleet management, smart charging, and maintenance and servicing of the new A-MoD system. Government – Central, provincial, and city government support will provide the data necessary to design the system for pilot testing and will be instrumental in developing progressive public policies for scaling up the deployment from neighborhood to city-scale. Policies should include incentives for shifting from high- to low-energy transportation modes. Government agencies will also be crucial to developing road rules and regulations that will permit the establishment of a new urban vehicle classifications and safety regimes. An Intelligent Urban Transportation Ecosystem for China
  8. 8. Gao Feng Advisory Company 8 Conclusion Addressing China’s most daunting challenge – designing a sustainable urban transportation system – calls for bold ideas coupled with the political will and capital to make it happen. We are rapidly reaching the tipping point where cities become less attractive places to live, work and play and thereby lose their economic momentum. Various enabling component technologies have reached the stage of readiness where, with a further nudge in investments and research, they can be integrated to transform how mobility demand is served. The unique context of China’s urban transportation challenge, the high rates of adoption of smart connected device technology, the size and scale of the market potential, along with the commercial aggressiveness of China’s internet industry, make it the right time and place to dream big and take the aggressive actions to create a sustainable smart city transportation model. An Intelligent Urban Transportation Ecosystem for China
  9. 9. Gao Feng Advisory Company 9 About the authors Chee-Kiang Lim is a Principal at Gao Feng Advisory Company. He has over 18 years of experience, including 10 years of consulting experience in strategy development and operational improvement for large multinational corporations. He has advised the Singapore Government on its Smart City strategy and implementation. Besides consulting for various automotive clients in China, he also has deep expertise in the oil & gas, mining and high-tech industries in China, Southeast Asia and Australia. He has previously worked in telecoms and high-tech start-ups in the Boston area and the Administrative Service of the Singapore Government. Dr. Ryan C.C. Chin is the managing director of the City Science Initiative at the MIT Media Lab. His research focuses on developing new urban systems for a post-oil, connected world in the areas of sustainable mobility, resilient energy systems, urban food production, transformable live/work space, and Big Data urban analytics. He earned his Ph.D. at the MIT Media Lab in 2012 by creating Mobility-on-Demand (MoD) Systems – a network of one-way shared- use Lightweight Electric Vehicles (LEVs) enabled by electric charging infrastructure and smart fleet management systems. Chin’s research led to the development of the CityCar – a foldable, shareable, two- passenger LEV designed specifically for MoD Systems. Research conducted on MoD systems and the CityCar led to the MIT Press publication of Reinventing the Automobile: Personal Urban Mobility for the 21st Century by Mitchell, Borroni-Bird (GM), and Burns in January of 2010. Time Magazine named the MIT CityCar “Automotive Invention of the Year” in 2007. Esquire Magazine named Dr. Chin as one of the Best and Brightest for innovators under the age of 35 in 2006. Bill Russo is Managing Director and the Automotive Practice leader at Gao Feng Advisory Company. His over 30 years of experience includes 15 years as an automotive executive, including 11 years of experience in China and Asia. He has worked with numerous multinational and local Chinese firms in the formulation and implementation of their global market and product strategies. While the Vice President of Chrysler North East Asia, he successfully negotiated agreements with partners and obtained required approvals from the China government to bring six new vehicle programs to the market in a three-year period, while concurrently establishing an infrastructure for local sourcing and sales distribution. Mr. Russo is a highly sought after opinion leader on the development of China’s automotive industry. Kent Larson directs the Media Lab's Changing Places group. Since 1998, he has also directed the MIT House_n research consortium in the School of Architecture and Planning. His current research is focused on four related areas: responsive urban housing, new urban vehicles, ubiquitous technologies, and living lab experiments. Larson practiced architecture for 15 years in New York City, with work published in Architectural Record, Progressive Architecture, Global Architecture, The New York Times, A+U, and Architectural Digest. His book, Louis I. Kahn: Unbuilt Masterworks was selected as one of the Ten Best Books in Architecture, 2000 by The New York Times Review of Books. Related work was selected by Time magazine as a "Best Design of the Year" project. An Intelligent Urban Transportation Ecosystem for China
  10. 10. For More Information: Bill Russo Managing Director Gao Feng Advisory Company, Ltd. Email: bill.russo@gaofengadv.com Chee-Kiang Lim Principal Gao Feng Advisory Company, Ltd. Email: ck.lim@gaofengadv.com Kent Larson Director, Changing Places Group MIT Media Lab Email: kll@media.mit.edu Ryan C. C. Chin, Ph.D. Managing Director, City Science Initiative MIT Media Lab Email: rchin@media.mit.edu Gao Feng is a pre-eminent strategy and management consulting firm with roots in China and global vision, capabilities, resources and network At the MIT Media Lab, the future is lived, not imagined. In a world where radical technology advances are taken for granted, Media Lab researchers design technologies for people to create a better future Gao Feng Advisory Company (www.gaofengadv.com) is a pre-eminent strategy and management consulting firm with roots in China coupled with global vision, capabilities, and a broad resources network. We help our clients address and solve their toughest business and management issues -- issues that arise in the current fast-changing, complicated and ambiguous operating environment. We commit to putting our clients’ interest first and foremost. We are objective and we view our client engagements as long- term relationships rather than one-off projects. We not only help our clients “formulate” the solutions but also assist in implementation, often hand-in-hand. We believe in teaming and working together to add value and contribute to problem solving for our clients, from the most junior to the most senior. Our senior team is made up of seasoned consultants previously at leading management consulting firms and/or ex-top executives at large corporations. We believe this combination of management theory and operational experience would deliver the most benefit to our clients. Our name Gao Feng is taken from the Song Dynasty Chinese proverb Gao Feng Liang Jie. Gao Feng denotes noble character while Liang Jie refers to a sharp sense of integrity. We believe that this principle lies at the core of management consulting – a truly trustworthy partner who will help clients tackle their toughest issues.

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