The Urban Transportation Wallet

In Transportation Transformation I observe that urban transportation must transform. New urban mobility will emerge as a result of this transformation and will result in providing the movement of consumers and goods as a service using vehicles of various form factors. In this piece I introduce the consumer’s urban transportation wallet as a composite metric for assessing a metropolitan area’s progress towards offering Mobility as a Service (MaaS).

Megatrends such as congestion, pollution, noise, climate change, the future of work, and aging societies always influence our decisions on where and how to live. They have a direct impact on transportation globally. Think of the multi-hour congestion-induced commute times in Sao Paulo, or Mumbai, and the pollution-related transportation restrictions in Beijing. Today we are hampered in effectively addressing how megatrends impact transportation because we approach urban transportation as a collection of silos: personally owned vehicles represent one silo, public transportation represent a second silo, and on-demand mobility services a third. This approach is also responsible for resource allocation, the utilization of the available transportation infrastructures, and the quality of the overall mobility experience. In my book Transportation Transformation I identify these as important reasons for the transformation of urban transportation. The transformation must approach urban transportation as an integrated system of passenger mobility and goods delivery. Under the new urban mobility that will result from this transformation the movement of people and goods will be provided as a service.

Urban mobility, whether provided using privately owned vehicles, on-demand services, or public transportation systems must be safe, affordable, convenient and offer a good user experience. Public transportation systems in particular are regularly evaluated along these dimensions. New urban mobility will bring together the intelligent transportation infrastructures that cities must create, the multimodal on-demand mobility services, and next-generation public and private vehicles that are automated, connected and electrified.

Cities must lead in the introduction and broad adoption of new mobility. This will not come easy for every city. Some, like New York and Seattle in the US, Paris, Berlin, and London in Europe, and Singapore, Shanghai, and Tokyo in Asia may embrace it. Others may need to first see the results of early adopters before deciding to follow. There may also be many that choose to maintain their mobility status quo. Making new urban mobility a reality will also require that automakers, mobility services companies and cities collaborate.

Before they can be in the position to lead, cities must transform, and there are four reasons for this need. First, through their transformation they must define the role they would want to play in new urban mobility, including how they will utilize their public transportation systems. Some cities in the US have already started partnering with mobility services companies to provide more convenient transportation while, in the process, attempting to reduce the growing losses of their public transportation systems. Second, they must learn to manage effectively and in an integrated manner their transportation infrastructure resources: curb, sidewalks, parking spaces, and roads. As new urban mobility advances these resources, particularly the curb and the sidewalk are becoming extremely important for passenger pick up and drop off, as well as goods pickup and delivery. By properly managing and monetizing these resources, cities will be able to fund their participation in new mobility. Third, they must address jurisdictional boundaries which today often negatively impact convenience and user experience and will have even larger negative impact in the case of MaaS. Finally, as part of their transformation, cities must determine how to regulate MaaS while enabling it to thrive. Depending on the transformations they decide to undertake, cities will emerge as intelligent transportation infrastructure providers, transportation coordinators that they can improve traffic flow across their intelligent infrastructures, or transportation orchestrators that control the efficient operation of resources used in MaaS very much like air traffic control systems do in the case of air transportation.

As they transform in order to realize new mobility, cities, but also the automakers and the mobility services companies, need a metric for assessing their progress. The Urban Transportation Wallet is a Key Performance Indicator (KPI) that measures this performance. The Urban Transportation Wallet captures:

  1. The number of trips a consumer makes during a specific time period, e.g., a month, by transportation modality, as well as the number of trips that were not made because of using transportation-enabled services, e.g., trips not made to the supermarket because groceries were delivered using a mobility service. The calculation takes into account transportation using privately-owned vehicles, public transportation, on-demand mobility services, including ride-hailing and micromobility, and transportation-enabled services, such as goods delivery, but also transporting the people who provide a service to the consumer, such as bringing a cleaning service to the consumer’s home.
  2. The amount spent on each transportation modality during the period of interest. This reflects the percent of the consumer’s mobility budget that was spent on each modality utilized for transportation and goods delivery, but also reflects the modality’s mileage share in the consumer’s mobility plans.

The Urban Transportation Wallet is an extremely important KPI, and significantly different than simply measuring the percentage of a person’s overall income that spent on transportation, because it enables:

  • Understanding how heavily each transportation modality is being used, and how frequently it is used by each individual;
  • Comparing the use of personally driven vehicles (owned, leased, subscribed) to the use of public transportation and mobility services;
  • Establishing how heavily the consumer utilizes transportation-enabled services instead of traveling to accomplish particular goals;
  • Measuring the affordability of each mobility service in each population segment of interest;
  • Assessing the consumer’s loyalty towards each mobility service utilized and calculate the individual’s lifetime value to that service.

By analyzing Urban Transportation Wallets, a city or an entire metropolitan area can determine the steps it must take in order to succeed in offering transportation-as-a-service. The Consumer’s Urban Transportation Wallet is an important input to these decisions. As one might expect, the Urban Transportation Wallet varies by consumer and by geography. It can be as valuable to an automaker or a company offering on-demand mobility services.

A city’s, and ultimately a country’s, overall Transportation Wallet is very dependent on the state of the public transportation system, the cost of mobility services, and the cost of owning and operating a vehicle. A few examples from our research are shown in the table below. One can see that Germany and France have a transportation wallet that is more evenly distributed between privately-owned vehicles, public transportation, and mobility services than the US’s transportation wallet (where the transportation wallet is dominated by privately-owned vehicles), and Japan’s (where the transportation wallet is dominated by public transportation).

CountryPOVs/1000POV Miles/capitaPublic Transport rides/user/yearAnnual mobility services users (million)Mobility services rides/user/year
US80012000404235
Germany5616300177115
France480620015412.634
China1816201085213
Japan615390024612.614

Cities that are transforming to become transportation coordinators are investing aggressively in smart transportation infrastructures, urban planning aimed to reduce traveling long distances, multimodal public transportation, and intelligent blending of public transportation with on-demand mobility services. In addition, they help their citizens balance the transportation modalities they use daily in order to accomplish their mobility goals. In other words, the transportation wallets of their citizens tend to be more balanced across modalities. One measure of success is that such cities tend to have lower average commute times compared to cities that don’t take a coordinated approach to transportation. For example, compare the average commute times of Berlin, Madrid, Paris (1 hour/day) to that of Mumbai, Istanbul, and Sao Paulo (3 hours/day).

New urban mobility will be implemented differently around the world. Depending on how it is implemented it will give rise to 3 different scenarios:

  1. Co-existence of mobility services with private vehicles and continuously decreasing role for public transportation. This is the likely scenario that we will continue to see in US cities.
  2. Dominant role of multimodal public transportation, co-existing with on-demand mobility services offered by fleets, and a smaller role for private vehicles. This is the likely scenario for European cities.
  3. Centrally orchestrated multimodal mobility offered exclusively as a service in certain parts of a metropolitan area, using advanced transportation networks many relying on autonomous vehicles of various form factors, with only a very limited role for private vehicles. This is the likely scenario primarily for Asian cities.

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