Do you remember Second Life? Created in 2003, Second Life was (and still is) an online virtual world. Users create profiles and do pretty much what people do in real life: socialize, buy and sell things in virtual currency, attend concerts, make political speeches, and, yes, sit in hot tubs with purple lizard avatars.
Back then, marketers were hot for Second Life. Major brands were spending big bucks on display advertising in Second Life’s malls, sports arenas, and dance clubs. But by 2007, Second Life was quickly losing its luster. In February 2009 Forbes ran a story, “The Second Life hype has fizzled. Is Twitter next?”
We all know what happened with Twitter. (Or could Forbes still be right?) The point is when we’re in the eye of the storm it’s very difficult to separate the fads from the revolutions.
Today, we’re in a maelstrom named mobility. It kicked up in earnest about three years ago. Vaguely defined, mobility represents the new way of thinking about transportation on the path to driverless cars.
You can’t open a web browser without being bombarded by news on mobility. It’s becoming a full-time job just to parse the acronyms: AI, IoT, UBI, MaaS, TDM, and TNC, and understand the catchphrases: shared-use, on-demand, and ride sharing (or are we supposed to call it ride-hailing?). The chatter has risen to such a level that it’s a lot easier to bury your head in the sand.
They say the new paradigm revolves around connectivity, electrification, sharing, and autonomy. What role will fleets play? Where, when, and how should fleets assimilate new solutions coming online? There are no easy answers.
Connected vehicles promise to fine-tune traffic congestion, offer location-based services, and offer reams of data that will transform insurance, road safety, and vehicle design.
Yet the true benefits to connectivity are realized with massive infrastructure development, and it looks like the previously preferred technology — dedicated short-range communications (DSRC) — will give way to 5G, which has an uncertain timeframe for rollout.
Automakers are planning 75 new all-electric models in the next five years in the U.S. alone. Yet consulting firm LMC Automotive predicts that electric vehicle (EV) demand will only reach 2.4% by that time. Where’s the disconnect?
The new paradigm seeks to increase vehicle utilization. Technology now allows us to manage a dispersed fleet, authenticate users remotely, and allow operation of those vehicles without keys. However, for most fleet types with particular use cases, shared use is a non-starter.
Connectivity, electrification, and sharing represent the underpinnings of autonomy. But let’s talk driverless cars: The automakers are fighting to make headlines by announcing plans for “semi” autonomous vehicles that are supposed to arrive in just a few years.
Yet these conversations don’t mention the fact that the U.S. regulatory environment is simply not prepared for widespread adoption of Level 5 autonomy, and won’t be until the technology is nearly perfect. That won’t happen for a decade or more.
Yes, fleets are front and center in the mobility revolution, but mostly to test these new models without the expectation of a return on investment.
Where does this leave traditional fleets? Most fleet managers don’t need to be first adopters — but you do need to understand these new paradigms. You need to be the subject matter expert that will allow you to make the right decisions to implement the right solution when the right market conditions come along. It all may seem far off, but it’s not — if you begin to formulate your plan and pay attention to the market indicators right now.
Connectivity is inherent in telematics and Internet of Things (IoT), and those applications are available today and are delivering tangible ROIs. We’re beginning to utilize big data from telematics, which is driving new products such as usage-based insurance (UBI). But you won’t realize these benefits if you haven’t implemented a system and understand it well enough to take it to the next level of benefits.
Cities such as Oslo, Paris, Madrid, London, and Milan are restricting or even outright banning fossil-fueled vehicles. In the U.S., big city mayors are floating similar proposals. Concrete restrictions might take a while here, but if they do come to pass, the fleets with a head start will be those already running electric vehicles and have developed charging infrastructure.
The concept of shared use is most urgent in cities, where parking is expensive and the movement is to get rid of parking spaces, not create more. Under the new theory of transportation demand management (TDM), cities are forming comprehensive central planning on how goods and people are moved through their cities. Fleets will play a central role and sharing is part of the equation.
On June 29, 2007, just as Second Life was fizzling, the iPhone was born. There was a lot of buzz at the time, not all of it positive. Techcrunch thought the iPhone would bomb. Few could’ve predicted that the iPhone would free workers from their desks, usher in the era of mobile computing, revolutionize how we consume media, and change the lens through which we see the world.
Transportation is having an iPhone moment today; the technology is incubating as we speak. It may even be available right now, but we don’t yet understand its ramifications. The fleets who will be able to take advantage are the ones who are forming their strategy now.
The 2018 Fleet Forward Conference, dedicated to mobility solutions for fleets, convenes Oct. 8-10 in San Francisco.
Originally posted on Auto Rental News