An auto­nomous car gives the user freedom

Kersten Heineke has always been fascinated by products and solutions that have a utility value that can be experienced by everyone. He sees mobility solutions as more than “just” technology. In his eyes, mobility is a contribution to improving people’s lives – by making the way from A to B cheaper, more convenient or more environmentally friendly. This would not only help the individual, but society as a whole. As co-leader of the McKinsey Center for Future Mobility, he can play an active role in this: The McKinsey Center for Future Mobility is the consultancy’s think tank for mobility disruption. 200 people worldwide deal solely with the future of mobility. They advise affected companies – from car manufacturers to insurance companies – and support start-ups in raising capital and scaling up.


Mr Heineke, with the McKinsey Center for Future Mobility, you are based in the middle of Frankfurt, one of Germany’s largest metropolitan areas. How do you personally get around in the city on a day-to-day basis?

Kersten Heineke: I use shared e-kick scooters, which covers 95 percent of my mobility needs. I occasionally take a cab for certain trips, but I don’t have a car, although I used to be a car enthusiast. I had high-performance cars, but at some point I decided that a car – at least one that you own – is not necessarily the best way to spend your money. And it’s also definitely not the best way to get around a city, especially if it’s just to transport one person.


Why do we need a new kind of mobility?

K. H.: The car has given many people freedom and helped us as a society in Germany, but also in many other countries, to prosper. But now that cities are almost at a standstill, and congestion and traffic emissions are a major challenge, we have to address this. We can no longer afford the number of cars per household to grow in relation to the income of a society, of a country. So we need to find alternative solutions to tackle congestion and emissions and decarbonise transport. And these solutions can be anything from shared mobility to micromobility, or perhaps less mobility by choosing shorter trips.


Which technologies are crucial for the development of new mobility solutions?

K. H.: There are a number of different technologies that I think are exciting in this respect. Autonomous driving is the most important of these for me. Once we’re able to move autonomously through the city with vehicles that no longer need a safety driver, we can introduce a whole new type of vehicle into the city: a pooled minibus or robo-shuttle or shared AV, depending on what you want to call it. These vehicles basically give you the convenience and freedom to get around your city without having to drive yourself, at a cost somewhere between that of a private vehicle and public transport. At the same time, they take up much less space and are completely emission-free because these vehicles are electric. Another technology that I find very exciting is urban air mobility. It can ­complement mobility. We can use the third ­dimension and also find new ways to get from A to B faster and, above all, more reliably. And last but not least, electrification and hydrogen technology are of course the big trends that will allow us to decarbonise public transport.


You talked about autonomous vehicles as the enabler of affordable shared mobility. Is it

realistic to assume that individuals won’t have their own car in the future?

K. H.: The short answer is yes. The slightly longer answer is that it depends on where people live and under what conditions they live. As for me, I am married. I have no children and I live in ­Frankfurt, very close to the city centre. There is absolutely no need to have a private vehicle. A private vehicle costs between 500 and 1,000 euros a month – a pretty high price to pay per month for a vehicle that you use very little. And if you can offer people in the city an alternative to get from A to B, with similar comfort, with similar speed and with similar freedom of movement as the car offers, then I am 100 percent sure that people will switch. Let me give you another example. My mother lives in a fairly rural area, a village of 6,000 people. The next largest city is 15 minutes away by car and has 150,000 inhabitants. Will she be able to get by without a car in her lifetime? I doubt it, because in a rural area you need a car because public transportation is not available in sufficient numbers and the options for using micromobility for longer distances are limited.


What does autonomous driving mean for the big car manufacturers?

K. H.: For me, it is first and foremost a huge opportunity. Why? Because a car that drives autonomously gives the user freedom. Imagine if your morning commute takes 40 minutes every day. You could actually use that time to do something, such as checking your morning work emails. Then that might even count as work time. And if an automotive company is able to provide that kind of function to a customer, loyalty to the brand is likely to be much higher. The manufacturer might even be able to charge customers for it and monetise the service per mile or per ­minute. The willingness to pay for that exists, we’ve tested that. So for me, that has a huge potential. On the other hand, and we’ve already talked about shared autonomous driving, it also has a downside. Imagine if the number of cars in cities drops by 20, 30 or even 90 percent. That’s certainly a challenge. So automakers need to think about how they can become part of this Shared Auto­nomous Mobility by providing the vehicles, providing the ­services themselves, or finding some other attractive business model.


In addition to the major, established market players, there are many startups that are

developing new mobility solutions. Based on your experience, how sound is the foundation underpinning these innovative companies?

K. H.: The startups in the mobility space are actually driving innovation. I don’t think we would have electric vehicles if there hadn´t been that one startup that is no longer a startup today. At least electric vehicles wouldn’t be as advanced as they are today. We probably wouldn’t be having a big discussion about shared autonomous vehicles if there were no startups. The same is true for micromobility or ride sharing. All of these startups are driving innovation when it comes to the future of mobility. Everyone today has an app from one startup or another on their cell phone – for me, that’s a sign that these companies are clearly successful, that they are being used, and that they fulfil a clear need and a clear purpose and will therefore continue to exist.


How will cities need to change and what can they do to promote and support new forms of mobility?

K. H.: In most cities today, 50 to 60 percent of the traffic is private transport, car traffic. If we want to change this and get to a world where we only have 10 or 15 percent, we need to redistribute a large part of the vehicle kilometres traveled to other forms and other modes of transport. To do that, we need to continue to invest in public transportation. We can build cycle lanes and invest in micromobility infrastructure to get people out of cars and onto scooters, e-bikes and so on. I think the biggest lever to really shape the future of ­mobility is shared autonomous vehicles.

I think, in theory, 90 percent of today’s private transport could be ­shifted to shared autonomous vehicles. That would completely change the way how mobility in cities works and the way people get from A to B and ultimately make cities greener. Mobility would become more affordable. It would be more convenient and have many, many other benefits for the city and, of course, for the citizens. What needs to happen? We need the technology. But at the same time, we also need the city or the politicians to have the courage to make unpopular decisions when it comes to the use of private vehicles. That doesn’t necessarily mean a ban on private vehicles, but disincentivising the use of private vehicles to the point where the alternatives, i.e. the robo-shuttle, are not only the smarter choice, but also the choice that everyone makes.


What’s the situation for rural areas? Are they going to be part of this revolution or are they not going to change that much?

K. H.: Let me go back to my mother’s situation: will a robo-shuttle pick her up to go into town? Probably not. There is simply not enough density in the area to make this an economically viable model, even with subsidies. What will happen, however, and is already happening, is that the vehicles that the citizens of these areas own will be electrified. This is because most people who live in rural areas also live in houses rather than flats. Therefore, they have a better opportunity to charge the vehicle at home. In my mother’s situation, it could also happen that the city she travels to bans or at least restricts the use of single-occupancy vehicles. She would then be able to drive her vehicle, hopefully her electric car, to the city, but she would not be able to drive into the city; she would then switch to a robo-shuttle. So in my opinion, rural mobility will change by 5 or 10 percent, while it could change dramatically in the larger cities.


How important is it for the various stakeholders and providers to work together?

K. H.: I saw a great example earlier this week where a micromobility company worked very closely with the city’s local transport ­operators. And this joint pilot project yielded tremendous ­benefits. User numbers increased for both the scooter company and the public transport agencies. The use of private vehicles decreased, and congestion also decreased during this time. In my opinion, we need to see this kind of cooperation more often.


And would you say that you see developments that are very likely to lead to a dead end?

K. H.: I think there are a few examples of systems that are ­heavily infrastructure-based. Autonomous vehicles with their own lanes don’t make sense in my opinion. Another example is truck charging using overhead wires. I think that’s a great concept for trains, but it is likely to stay a niche application for trucks. So again, anything that is heavily infrastructure-based and covers a niche application area is probably bound to fail.


Will the solutions that we’re talking about only benefit industrialised, ­technologically advanced nations? does future ­mobility also offer opportunities for poorer ­countries?

K. H.: Many current innovations in mobility do not come from industrialised countries, but from other countries. For example, shared cabs or ride-pooling. This is very common in many countries in Southeast Asia and Africa. And in many cases, they are also highly digitalised and use the smartphone for those ­services. On the other hand, we see a lot of new microcars and smaller vehicles. Two- and three-wheeled vehicles are coming out of

Southeast Asia and India, because not everybody in those countries can afford a car. So there are some solutions coming out of Africa, South America and Southeast Asia that are really excellent and would probably help us a lot if we implemented them here.

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