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Urban Mobility Urgently Needs a Unified Coalition

Solving the current mobility paradox goes far beyond transportation system performance, and efficient mobility systems are key for the social and economic development of cities and its residents.

Every experienced observer of the urban mobility landscape has reached the following conclusion: transportation in large urban areas is stuck in a paradox. Since the emergence of “on-demand mobility” in the early 2010s (mobility services available on a smartphone), the scope of mobility possibilities has never been so wide. When getting from point A to point B, people used to choose between a personal car, public transportation, private bike or walking. Now, they can grab a shared e-scooter, a shared car, or directly order a PHV (private hire vehicle). All of these new modes have shared a common promise: to make urban mobility more convenient, faster (in other words — less congested) and even greener (cities less polluted). Yet, when measuring an urban transportation system’s performance in a majority of cities, the promise keeps being broken.

Congestion has increased by 15–20% (according to the TomTomIndex between 2008 and 2018), pollution has followed the same path, and ground transportation still represents 15–20% of total GHG emissions in the European Union and in the US. Hence, despite a comprehensive toolbox of innovations and alternative services, an individual car remains a preferred option for a very large number of urban residents throughout the world. Waiting for technology (e.g. new vehicles, new apps, advanced routing and dispatching algorithms …) to solve the issue has proven not be efficient. This is another instance of the elusive “solutionism” that expects technology, notably digital, to be the solution to our most burning problems. Indeed, it is probably less a problem of technology and services than a problem of stakeholders’ behaviors that prevent urban mobility to change for good.

In a new post-COVID19 era, in which pandemics can become a reality from one day to another, large cities will no longer be able to solely count on public transportation to put a large share of drivers out of the roads. Analyzing the situation after the March-May 2020 lockdown, we found that even if a share of employees have continued to work from home, the levels of congestion have rapidly reached the pre-crisis levels — while at the same time the use of public transportation has had a hard time to recover. In mid-April in China for instance, the levels of congestion in large cities (e.g. Shanghai, Guangzhou or Nanjing) had reached the historic 2019 levels, when metro passenger volumes only had recovered to 60% vs. pre-crisis levels, according to BCG research. Thus, in the new era, cities will face major environmental (pollution) and economical (congestion) risks of experiencing lasting shifts towards the preferred mode of transportation of an individual car. Residents who are the most likely to suffer from these increasing issues are the ones not able to work from home: mostly blue-collar employees. This situation will drive increasing inequalities and adding an important social risk.

Hence, it is urgent that collectively the mobility players (public authorities, mobility operators) come up with a solution to speed up the adoption of alternative solutions: shared and/or green modes of transportation. We propose to take the tools of the sociology behind collective action and apply them to the mobility and transportation ecosystem, to finally understand the root cause of the above-stated paradox and define a comprehensive framework to address it.

We found that urban mobility is stuck in a Paradox of Collective Action: most city residents agree on the urgency to reduce congestion, pollution and carbon footprint of urban transportation, yet the current context leads to insufficient cooperation and unsatisfactory collective outcomes. For the purpose of the analysis, if we liken an individual’s behavior to the maximization of its individual welfare, we found that this optimization does not lead to the common objective of improving mobility performance. In other words, the communality of interests do not itself create a community of action towards it. It creates a latent group, not an active group: there aren’t enough incentives for individuals to create a community of action.

Acknowledging this issue, other stakeholders can modify a travelers’ context, so that they start acting to reach a common objective and collective outcomes of reducing congestion and pollution. By adding personal benefits / costs for residents who are acting / not acting, public authorities and/or private mobility players (e.g. mobility operators, car manufacturers) can change the situation and help urban transportation improve.

However, applying again the same reasoning to private players and public authorities, we find that the respective contexts in which they operate prevent them to change residents’ behavior.

Two solutions exist to ultimately solve the current paradox of urban mobility. First, public authorities have to be bold and take their responsibilities on the full scope of urban transportation in order to develop a comprehensive regulatory framework whether or not residents (and ultimately voters) do not agree at first glance. Second, without adding additional costs or benefits into the scheme, if a subset group of private players realizes the opportunity to develop solutions to congestion and pollution and builds a coalition of trusted players to do so, they can change the residents’ context and at the end improve mobility performance.

The Paradox of Collective Action

Mancur Olson, in The Logic of Collective Action (1965), provided a comprehensive analysis of individual behaviors in groups of different sizes and concluded that “if the members of a large group rationally seek to maximize their personal welfare, they will not act to advance their common or group objectives unless there is coercion or unless some separate incentive is offered”. Applied to urban mobility, the situation is the following: society is well aware and agrees that congestion and pollution should be reduced. Yet, the context in which each individual is making their choice when deciding a transportation mode prevents the selection of greener and shared modes, since the individual incentives to do so are too small. This situation leads to stagnant or even increasing congestion and pollution. In other words, each traveler is following the simple logic of choosing an individual car for convenience and comfort since its sole contribution of taking a shared and green transportation mode would have no effect on the overall situation.

When it comes to overcoming urban mobility challenges, we are stuck in what Mancur Olson calls a Paradox of Collective Action and a mathematical behavioral matrix consolidates this statement (Exhibit 1). To understand an individual’s reasoning, let’s liken an individual’s behavior to the maximization of their individual welfare. Within the current context, when deciding to contribute or not to reach a common/group objective, individuals will prefer not to act, whatever the benefit and whatever the probability of the successful outcome are. The main reason being that contributing is costly, when benefits will accrue to the group whether or not individual members have contributed.

In our case, successful outcomes are the increase of travel speed, the decrease of congestion, GHG emissions or levels of pollution. These are collective benefits that would accrue to the whole group. Individuals when choosing a mobility option can decide whether to contribute or not to this objective. But, contributing has an individual cost. To participate to a decrease of congestion, the traveler needs for instance to start carpooling which implies commitment to schedules, reduced comfort in the car, etc. Another way to contribute could be to switch from an individual car to a bike, which in most cases is perceived as having a cost (ask a New Yorker if he/she would choose to bike during winters vs. taking a cab). Last example would be to switch from an existing diesel car to a new electric vehicle, which usually costs more and implies, given current infrastructure, some additional thinking and planning on where and when to charge the vehicle that would not happen with a traditional ICE engine. Hence, because contributing is individually costly and because an improved air quality or the benefits of decongested roads are for all travelers whether or not they have participated to the successful outcome, a rational individual will choose not to contribute to the group objective. “If the collective outcome is a failure, at least I did not contribute in vain, and if it works then I will benefit from it anyway — the success does not depend only on me and I don’t know what others will do.”

Flipping the current context

Acknowledging that the current individuals’ context prevents society to switch from individual cars to green and shared mobility, the following question is how to modify this context, so that it becomes rationally more interesting to contribute than not to contribute. In other words, each term of the individual behavioral matrix shown in Exhibit 1 can be modified so that contributing is individually more useful.

Analyzing the matrix, three key actions can be taken to modify the context in a more favorable way for society and urban mobility performance (Exhibit 2).

First, reducing the cost of contributing could help. In the previous example of carpooling, this could for instance materialize in carpooling platforms, guaranteeing return trips in case no carpool match can be found on the return leg. In the case of electric car adoption, lowering the cost materializes in an optimized and scaled charging infrastructure network or simply lowering the price for electric vehicles.

Second, mobility stakeholders can add a private benefit that would only accrue to travelers that are contributing to the group objective. This private benefit can be either financial: in France, the government is refunding a share of public transport subscription or a share of the costs induced by using bikes for commuting, notably to boost ridership. Or, it can be non-financial: allowing shared vehicles to take designated carpool lanes (HOV lanes) like in Los Angeles is an additional private benefit for those helping reducing congestion. Other cities like Oslo allows electric vehicles to use bus lanes in the city center, which is also a great example of non-financial private benefit.

Third, mobility stakeholders and especially public authorities can introduce a private cost of not contributing. On that matter, congestion pricing is an interesting example of increasing the cost of using private vehicles and it has proven its efficiency to reduce traffic by 15–20% in cities like London, Singapore or Milan. Another example is the extra tax on solo rides when ordering a ride from a ridesharing platform in New York City.

In summary, a series of measures can be introduced to reverse an individual traveler’s context in a position where his/her rational welfare maximization would favor contribution over the status quo of preferring individual car to green and shared modes of transportation. When the sum of private benefit of contributing and reduced cost of contributing is greater than the private cost of not contributing, then the very same self-interest logic that prevented travelers to contribute will lead them to switch to green and shared mobility.

Inevitable immobility of private mobility players

We just demonstrated that both public authorities or private operators can modify the context of travelers, so that they start contributing to society’s objectives of reducing congestion, pollution and GHG emissions. However, it is not clear that their own current context enables them to do so. Let’s have a look at private players’ context.

If again we apply the same reasoning that we developed for individuals to private mobility players, again it costs them more to contribute to the improvement of mobility systems’ performance than not to contribute. Indeed, contributing means for instance for car manufacturers to invest in R&D and develop new capabilities to design, manufacture and sell new electric (or less polluting) vehicles. It would also mean selling less polluting, yet more profitable vehicles like SUVs. Taking the argument to the extreme, it would mean promoting shared transportation modes vs.individual vehicles . Mobility service operators follow the same logic. Take ridesharing platforms, scaling up pooling options and making it a norm, would force them to invest even more in top-notch optimized dispatch and pooling algorithms. It would also decrease a rider’s and driver’s satisfaction (as it is the case today). Riders are taking more time to get to their destination for a limited discount on price and drivers are annoyed of making numerous stops. Even for scooter sharing companies, contributing to greater mobility performance would probably imply putting less engines on the streets and taking greater care of urban disorder they have created in some situations. This would translate to additional costs for them.

Public authorities, guardians of mobility, asleep

Exactly like it is the case for individual travelers, private mobility service operators’ context prevents them to change the individual travelers’ context. Hence, it falls on the public authorities’ responsibility to modify both contexts to enable improvements in urban mobility. We already described the type of actions that public authorities at both the city and national levels can implement to modify an individuals’ context. Usually, a combination of the three above-detailed measures (lowering the cost of contributing, additional private benefits for contributors, and additional private costs for not contributing) are needed to efficiently make private stakeholders change their behavior. It is precisely what the governments of Norway and of the City of Oslo have done to promote electric vehicle and has led the country to be by far the leader in EV penetration (Exhibit 3).

It is also the role of public authorities to take actions to modify private mobility players’ context. Good examples are the tax on empty cruising for ridesharing platforms that was implemented in NYC, which falls into the introduction of a private cost for not contributing. CAFE regulation in the EU, that inflicts penalties for car manufacturers for not selling enough low-carbon vehicles (current estimations forecast ~20bn€ penalties in 2020) is another great example of private costs for not contributing towards private mobility stakeholders.

Unfortunately, current public authorities in a large number of urban areas are still reluctant to use all of these levers to efficiently transform urban mobility for greater good. Again, it “costs” more to act than not to act: some city authorities are reluctant to intervene beyond their traditional scope of intervention (usually public transit and infrastructure management) or do not implement coercive or incentive measures on the full scope of possibilities, making fragmented policies inefficient. This is for instance the case when city authorities decide to build new bike lanes across the city, but do not support these developments with strong and ambitious “soft measures” to boost adoption (e.g. financial support to buy a bike, incentives to open bike repair shop across the city). Other public authorities do not want to take the political risk of implementing efficient measures that residents (and ultimately voters) will not perceive well. It is the case with congestion pricing, which is often disregarded by municipalities afraid of adding new taxes.

Bottom-line, in a majority of cities all stakeholders: residents/travelers, private players and public authorities, have stuck to business as usual leading to the paradox.

Mobility coalition, the missing piece

Do we really end up in a situation where society has no other option than hoping for public authorities to set up the right and comprehensive regulatory framework that would finally improve urban mobility and transportation system performance? Group sociology explains actually that another way does exist to reach common objectives: pre-coordination. If a small group of stakeholders creates a new context, in which for different reasons it is better for them to contribute to greater good than not to contribute, they can ultimately reach overarching society’s objectives.

To concretely explain the concept of pre-coordination, let’s take a simple example from another context. An island in the Mediterranean Sea started to suffer from mass tourism, jeopardizing its ecosystem, cleanliness of beaches and streets. Residents were not happy. Hotels and restaurants started to suffer as traditional tourists would not come back. Most of them knew they would benefit from controlling the situation and limiting mass tourism. But they were only a “latent” group (people aware of their common interest), not an active group (people actively contributing to their common interest). Indeed, each hotelier, when receiving offers to accommodate a large number of “new” tourists, was accepting the offers. “What’s the point of contributing if others are not?”

The situation changed when a family with sons, nephews and cousins who owned many hotels made their commitment public to maintain a certain “quality” of tourists. The familial network provided the pre-coordination that ensured mobilization of its members and gave rise to an active group. The active group reached the critical mass to attract new members, eventually achieving the common objective. Similar examples of pre-coordination can be found in social movements that emerge from a pre-existing coalition based on education (some cohorts in elite universities), regional origins and so on.

In the case of urban mobility, pre-coordination between private mobility players translates into a number of private stakeholders sharing a common goal of changing the current situation, trusting each other to contribute and sharing information and/or capabilities among the group to help reaching a solution.

Concretely, successful pre-coordination in urban mobility can be reached if a group of private players understands the value at stake of changing the current mobility context and gets convinced it can access this value by developing business models, contributing to the greater good and reaching a sufficient size to change the urban mobility landscape.

Fortunately, this is the case. First, observers and experts from the field (including this BCG report) evaluate that shared mobility represent a $76B worldwide value pool at 2035 horizon, there is value at stake. Second, sustainable and profitable business models do exist: in a previous publication for instance, we explained how ridesharing platforms can turn their existing model into a business model that would be profitable, while contributing to congestion and pollution decrease.

If operators want these sustainable and profitable mobility services to be successful and have a tangible positive impact on mobility system performance, new sustainable models need to be developed at scale and reach the critical mass of users. Developing such a scaled end-to-end mobility service is complex and requires several different capabilities (e.g. infrastructure management, development of complex dispatch algorithms, innovative insurance schemes, fleet management capabilities, top-notch user experience development, etc.). Hence, a successful pre-coordination requires a coalition of complementary actors (car manufacturers, new mobility operators, infra managers, insurers, etc.), trusting each other, sharing data and capabilities, and helping each other to build this comprehensive solution. Without this sized coalition, any pre-coordinated actors would not reach the critical mass and would fall again into the previous logic of: why would I contribute if my solo contribution has such a limited impact?

Again, public authorities have a specific role to play in the mobility coalition development. They need to make sure the regulatory framework fosters the development of such a coalition notably by setting up the right framework on data sharing and by creating the adequate public markets to be operated by such a coalition, which would help reach scale.

Public Guardians and Coalition called to the Rescue of Socio-Economic Development

Urban mobility is stuck in a paradox of collective action, where the current context prevents individual travelers and private mobility players to contribute to the improvement of transportation system performance, even if technologies and innovation are already there to solve main mobility issues. To finally make stakeholders change their behavior, two key solutions do exist:

  • First, public authorities, national governments and city authorities finally need to take responsibility and implement a comprehensive framework of regulations that would on the one side lower the cost and add benefits when choosing for green and shared modes of transportation, and on the other side increase the cost of using private cars.
  • Second, private players should understand the value at stake and the tremendous opportunities that green and shared mobility offer them. To unlock this value and opportunities, private players need to set up coalitions of complementary actors developing end-to-end, scaled, profitable and sustainable mobility services. Once again, public authorities have the duty to create the conditions for such coalition to emerge.

Solving the current mobility paradox goes far beyond transportation system performance, and efficient mobility systems are key for the social and economic development of cities and its residents.

Sources & Notes