Review of Transportation Transformations by Evangelos Simoudis
It’s not surprising that dozens of books are being written about autonomous vehicles and other potentially transformative innovations in the mobility space. After all, the 2010s were an extraordinary period for emerging transportation technology. Transportation Network Companies such as Uber and Lyft went from nascent startups to household names and IPOs, electric vehicles began to achieve meaningful sales figures, micromobility devices achieved – seemingly overnight – ubiquitous visibility in the urban U.S., and autonomous vehicles went from university science projects to the earliest stages of commercial usage.
Critics argue that a disillusionment phase has set in, exacerbated by the impacts of the COVID 19 pandemic.
Recently, however, critics argue that a disillusionment phase has set in, exacerbated by the impacts of the COVID 19 pandemic. It remains unclear whether electric vehicles will achieve critical mass on the timescale necessary to mitigate climate change without continuing and significant policy intervention. Many states and cities have pressured Uber and Lyft by increasingly regulating their operational and labor practices. At the same time, concern mounts as to the technological and economic readiness of autonomous vehicles. While the development and broad adoption of major technology usually unfolds over time scales measured in decades, the degree of excitement and anticipation in the 2010s raised a different set of expectations – expectations that have now come face-to-face with reality.
Evangelos Simoudis’s new book Transportation Transformations: How Autonomous Mobility will Fuel New Value Chains steps into this gap between expectations and reality. Simoudis asks, on the book’s opening page, for “a little patience, please” and argues that transportation transformation is a multidecadal project. At same time, Simoudis insists that the work and competition to lead the metamorphosis is well underway. The very title of the book anchors on the terms “transformation” and “transportation”: transformation being the gradual change of the system as a whole, rather than a frame where a single new invention catalyzes rapid change through the sheer weight of its irresistibility. The title also reorients the conversation from “mobility” – a term weighted with aspirational social connotations – towards “transportation”, reiterating that industrial considerations will drive us towards the future.
Simoudis shows that the future business models in the transportation space are likely to be well described by evolutions from existing models, rather than new models emerging ex nihilo (reproduced with author’s permission)
Future value chains will inevitably connect at new points; for example, even OEM-centered value chains will need to become increasingly adept at data-intensive consumer relationship management.
Data processing, analytics, and value extraction are central to Simoudis’s thesis on transportation transformation. An entire chapter demonstrates the increasingly important role of data across the entirety of the value chain. Future value chains will inevitably connect at new points; for example, even OEM-centered value chains will need to become increasingly adept at data-intensive consumer relationship management. Simoudis argues that this is a common trend across the diverse automotive value chain. Over the next several decades, new data-centered value chains will be created, regardless of which flavor of business model emerges. Therefore, leadership in data analytics will be a sine qua non of participation in the evolving transportation value chains.
Crucially, business models and value chains will evolve to exchange data across what are today value chain and data siloes. Given that security breaches in transportation can often result in physical danger, cybersecurity competence will become a necessary condition for a significant role in the emerging transportation ecosystem.
By grounding itself firmly in near-term business considerations, Transportation Transformations is a needed contrast with many recent contributions in this space. To pick one example, the recent Ghost Road: Beyond the Driverless Car by Anthony Townsend, covers similar ground but offers highly specific and provocative extrapolations as to what the long-term future will bring. Townsend predicts the future urban form in exquisite detail, as well as a cascade of industrial reorganizations that will culminate in the wholesale takeover of transportation infrastructure by tech and finance companies. While both a compelling read and based on a deep understanding of current trends, the book exemplifies a tendency to prognosticate about the long term impacts of autonomous vehicles while glossing over the messy and difficult process to get to that steady state future.
Developing a breakthrough technology is not enough to achieve commercial success, as the inventors of the Segway and Google Glass can readily attest.
This is where Transportation Transformations shines. Simoudis’s central thesis is that this evolution will be dictated by the drive of businesses and governments to unlock the value propositions latent in new transportation modes and business models. At times the book grinds through seemingly exhaustive descriptions of where consumers, businesses, and governments will find value. While this makes it less of a page-turner than more speculative and imaginative projections, this should prove to be a more useful framework, providing a much-needed alternative to the naive technological optimism that has, at times, characterized the industry.
Developing a breakthrough technology is not enough to achieve commercial success, as the inventors of the Segway and Google Glass can readily attest. The book’s essential contribution is to emphasize the core message that the creation and realization of profit by the private sector and societal goals by engaged government stakeholders is the core driver of transportation transformation.
The breadth and scope of Simoudis’s study is itself noteworthy. The transportation sector is vast, responsible for over $1 trillion of economic activity and an extraordinarily broad network of stakeholders. But Simoudis plunges valiantly into this effort, applying a core framework for differentiating between business model innovation and technology innovation to a broad range of stakeholders. He does not shy away from predictions of further consolidations amongst OEMs, the future of micromobility, or insights into how connected vehicles can create value, particularly leveraging data analytics. While individually, these predictions usually do not break new ground, Simoudis leverages his frameworks to offer actionable pathways for OEMs, mobility service providers, and other stakeholders to pivot to a new role within the emerging value chain.
Simoudis offers a typology of business models for what he terms “mobility service companies” as well as potential new business models and key KPIs (reproduced with author’s permission).
Simoudis’s elevation of government entities as key stakeholders in the transformations – and likely key stakeholder in managing and brokering data – is both novel and welcome. One of the more unfortunate developments of the early 2010s was the view, advanced by certain leaders in transportation technology, of regulation as fundamentally antithetical to “innovation.” Simoudis dedicates considerable space to cities and governments as core stakeholders and indispensable participants in the transportation transformation process. Governments have goals which range from revenue generation to reducing congestion and increasing accessibility; consequently, they will shape markets in attempts to achieve these objectives. One minor quibble is that the book does not deeply engage the likely possibility that climate change regulation will become an important force in mobility value chains over the course of this multidecadal transportation transformation.
The primary audience of Transportation Transformations is business leaders in the transportation space. Executives can use the book as a detailed road map of strategic issues to consider in leading companies through the ongoing transformation. However, because of the breadth of perspectives it considers and its sophisticated treatment of government as an agent of change during this transformation, a broad range of readers will find this a helpful primer for the slow but inexorable evolution that lies ahead.