Have you even wanted a quick update on the major developments in the taxi, PHV and larger mobility world? Put yourself completely in the picture? And network with many colleagues in the taxi and mobility world?

Then you need to register for Taxi & Mobility Update 2017, a two-day annual international event held in Brussels on May 4 and 5, which will give you a fairly complete picture of changing mobility from various perspectives: operators, aggregators, regulators, academics, mobility specialists, public transport…. Come and join us in Brussels on May 4 and 5 and REGISTER NOW.

What will we be talking about in Brussels? About ‘All change!’ Mobility is changing rapidly. Mobility solutions are getting more personalised. Apps and different providers are making the mobility landscape more individualised. Yet the players of tomorrow won’t be today’s transport providers. Who drives tomorrow’s mobility?

Tomorrow’s mobility will be more tailormade. Even before autonomous vehicles appear on our streets, Taxi and For Hire Vehicles, Transportation Network Companies (TNC’s), public transport operators, coach companies and bike and carsharing systems will each fill in part of the mobility puzzle. And how close are we to that autonomous future? Come to Brussels and find out!

Who’s going to do what? Which operator or company is going to take the lead? What will be the new business models? And what will be the role of governments and regulators –local ones, the ones on state level, national institutions or even international ones like the EU? Will mega-cities have a say? Let us provide you with the answers!

The international two-day annual Taxi & Mobility Update – unique in this area, straddling various forms of transport – gives an in-depth overview of the mobility industry and provides (smart) answers to solving the mobility puzzle. More like an international masterclass, this event unites various players from a number of different industries. We traditionally provide ample opportunities for networking.

After our very topical keynote speakers (soon to be revealed) this time we have planned exciting sessions on:

• The future (and drivers) of urban mobility: quo vadis public transport?
• Mobility on Demand (MOD) and Mobility as a Service (MaaS): who’s in the driving seat?
• New business models: the taxi and FHV industry’s fightback
• The latest on autonomous vehicles: what’s the taxi industry’s role?
• Regulatory changes on various levels: EU, regional and local
• International consolidation: why buy a cab or FHV-company?
• Technological change: accessible vehicles, meters and IT-solutions
• Electromobility: plug-in or hydrogen?
• International challenges – local responses. Why?

In the heart of Europe, specialists from all over the world will provide our target-audience (taxi and FHV-operators, public transport specialists, TNC’s, regulators, mobility associations, academics, consultants, politicians and suppliers to the mobility industry) with answers to solving the mobility puzzle: Who’s in the driving seat?

Join us in Brussels on May 4 and 5! Follow us on www.taxiintelligence.com and www.mobilityintell.com and register here for Taxi & Mobility Update 2017: http://www.mobilityintell.com/update-2017/

• Taxi & Mobility Update 2017: Register now!

We picked up a nice blog about the single provider of transportation (TSP) in Pricetags in Annals of Motordom, Mobility Pricing and Transportation. A view from Vancouver:

I’ve been predicting the arrival of the TSP – a single provider of transportation services, rather like a Shaw or Telus offering a suite of communications options, from cellphone to cable TV. In the case of a Transportation Service Provider, a single monthy bill will give you information and access to all forms of transit, train, car- and bikeshare, rentals, pre-paid tolls, road pricing charges, parking and maybe even maintenance for your increasingly less-needed private car and bike.

In his article, Peter Ladner discovered that in some places, the TSP is already here: Transport for West Midlands and Whim set to pioneer MaaS in the UK.

A new era of transport is about to begin in the United Kingdom, where West Midlands will become the first region to pilot Mobility as Service (MaaS) to its residents. The pioneering service, Whim by the MaaS operator MaaS Global, will be launched in the West Midlands metropolitan area in early 2017. The launch follows a freshly signed Memorandum of Understanding (MoU) by the West Midlands Combined Authority, transport service providers National Express and SilverRail, Birmingham City Council and MaaS Global. Other transport companies will be welcomed onboard the Whim service in the future.

A single service for all transport. The MaaS concept means looking after people’s daily mobility needs with a single service, which can be used either on a subscription or pay-as-you-go basis. … The world’s first capital region MaaS service is already in operation in Helsinki, Finland, where MaaS Global has launched the Whim mobile app – initially for a limited group of test users. Whim, which will be released in Birmingham and West Midlands metropolitan area in spring 2017, will integrate public transport, rental cars, taxis, trains, bikes and more to take people door to door as easily as possible. It has proven immensely popular in Finland, with a growing list of users on the waiting list before next year’s public launch.

Shaping tomorrow’s transport together. The MoU commits all the signed parties to develop MaaS in West Midlands, with a shared goal to build an attractive, comprehensive and convenient service with long-term viability. Councillor Roger Lawrence, lead member for transport for the WMCA, see MaaS as a great idea to encourage people to consider how they get about other than with the private car: “Mobility as a Service can transform how people get about this region and by doing so help free up our roads and tackle the scourge of congestion which costs this region billions of pounds a year,” he says.

By the way: later this year Amsterdam will be opening up its own Whim-service, probably run by MaaS Global-shareholder and French public transport giant Transdev.

• After Helsinki whim goes to the West-Midlands…. And Amsterdam.

At a press conference in Beauvais on Thursday, March 23, Isbrand Ho, Managing Director of BYD Europe, accompanied by Xavier Bertrand, President of the Hauts-de-France Region; Caroline Cayeux, President of the Beauvais Urban Community; Christian Sandowski, Mayor of Allonne and Business Development Delegate to the Beauvais Urban Community; Philippe Vasseur, President of Nord France Invest and Special Commissioner for the Industrial Redevelopment of Hauts-de-France; and Didier Martin, Prefect of the Oise departement, announced the Chinese group’s decision to invest €10 million in a site in the town of Allonne, near Beauvais, in Hauts-de-France.

The project calls for around 100 jobs to be created in the initial phase. The production facility will occupy 32,000 sq m of a parcel totaling nearly 80,000 sq m, and will assemble up to 200 vehicles a year—single-deck buses and coaches—in its first phase. Other vehicles may be added as BYD expands its product line.

Production is scheduled to get underway in the first half of 2018. In addition to bus assembly, BYD plans an after-sales unit for maintenance and repairs, as well as a logistics center for spare parts. In the longer term, a test center for batteries could be added.

Isbrand Ho, Managing Director of BYD Europe, said “We chose France because it has Europe’s largest bus market. And we selected Beauvais and the Hauts-de-France region because of the quality of the building proposed to us, the region’s ideal location, and the proactive approach of local and regional authorities. I would like to take this opportunity to extend my personal thanks to the representatives of the Hauts-de-France region, the Beauvais Conurbation, Nord France Invest and Business France.”

He explained BYD’s vision: “We want to contribute to cleaner air in large cities. Diesel-powered urban buses are not only one of the leading sources of air pollution, they are also one of the vehicle categories that is easiest to electrify, since they travel along clearly identified routes. We anticipate a significant rise in sales of electric buses in Europe, and particularly in France, Europe’s largest national market.”

Xavier Bertrand, President of the Hauts-de-France region, welcomed the new facility: “BYD’s decision to set up in Hauts-de-France is great news for employment—our region’s top priority. A plant like this shows that we can attract major international corporations when we invest the resources to do so. Last but not least, production of electric buses fits in perfectly with our Third Industrial Revolution strategy, which aims to make Hauts-de-France a leader in energy transition.”

• BYD chose Allonne, near Beauvais in France for its new bus factory.

In 1860, the Pony Express moved mail between St Joseph’s, Missouri and Sacramento, California. Utilizing 200 relief horses along the route, the Pony Express delivered Lincoln’s first inaugural address from Nebraska to California in seven days and 17 hours. It was the company’s and the worlds fastest ever delivery of mail and it ushered in the era of high speed mail delivery. The horse riders who delivered the mail had a weight limit, between 100 to 125 pounds, to ensure they did not overburden the horses. One rider claimed he was 11 years old when he joined the Pony Express. The rider needed to be the size of an 11yr old, the weight limit was that strict!

Unfortunately, a mere 19 months after it launched, the company owners, William H. Russell, William B. Waddell and Alexander Majors, shut down the Pony Express. The company lost ~$200k (~$5M in 2017) for the period the business existed. While the financial losses crippled the business, it was the transcontinental telegraph that truly killed the Pony Express. After delivering 35,000 pieces of mail and traveling half a million miles, what disrupted the then-disruptive Pony Express was a new technology. A technology that looked nothing like the horses it disrupted and cost a lot cheaper than the resources required to provide the same service, deliver messages between people.

It’s 2017 and Lyft, Uber, Postmates and Instacart (I’ll call them LUPIs for ease) all promise to get us something — a cab, our groceries, our restaurant orders — faster than the current technology! But their model is inherently flawed. While the Pony Express owned its horses, and still lost money, LUPIs claim all they own is technology; the horse in this analogy just so happens to be the cab driver, pickers or cyclists who are activated by LUPI technology. LUPIs are truly just brokers masquerading as convenience providers.

The Pony Express, which owned the assets required to deliver the mail, controlled more of the value and, consequently, captured more of the value. Yet it still lost money. The cab drivers (or grocery stores), who own the physical assets, capture more of the value for the same reason. Before the LUPIs came into the picture these asset owners were not making huge margins (even if the cab companies or dispatchers were). When LUPIs insert themselves into the process they take a cut of the value the asset owner used to own 100% of. All the while promising the customer convenience. These firms provide convenience without increasing the size of the proverbial pie. And we know what happens to brokers when all they do is extract value…

Let us use Instacart as an example; two value reducing possibilities exist when a customer uses the app for their regular grocery shopping

• There is no increase in revenue for the grocery store since customers maintain their regular shopping patterns.
• The grocery store loses the increased revenue from those unplanned purchases almost all customers make in the grocery store. Those products by the checkout line are high margin products that the grocery store wants customers to buy on a whim!

The only way LUPIs can insert themselves between the customer and the asset owner, and truly benefit all parties, is by increasing the frequency of customer usage of the asset or by increasing the aggregate size of the customer base.

But LUPIs are no longer increasing the size of the pie for the asset owner. This I believe is the crux of the argument between Uber’s Kalanick and Kamel. Uber has inserted itself in the money flow and takes a cut without increasing the amount of money that Kamel gets. Over time, while maintaining its commission, Uber has reduced the topline revenue for Kamel and that only negatively affects Kamel. For Uber to increase its own revenue it needs to increase the number of cabs available for customers on the road.

The increase in numbers of cars on the roads, reduces the number of rides that Kamel can provide due to increased competition, consequently reducing Kamel’s revenue, but not Uber’s. The belief at the LUPIs is that, growing exponentially, through adding assets you do not own, will somehow magically increase profitability. This is a fallacy. The LUPIs are reducing the contribution of each value creating asset (a cab, a picker, a cyclist) without reducing the cost to manage that asset. This reduces the willingness of the asset to contribute. Sidenote: in business school speak LUPIs worsen the asset to sales ratio of the asset owner.

To increase revenue without owning assets, from a small base of commissions, these companies and their investors believe they need to scale exponentially. The bigger you are the more pennies you can scrape off more transactions.

• – Instacart needs new shoppers since current shoppers maintain shopping frequency despite the increased convenience. Have you personally shopped more because you have access to Instacart? Guessing your answer is ‘no’.
• – While you might order more food from your regular restaurant when ordering online, Doordash needs new customers ordering from new restaurants to justify taking cuts of the restaurant revenue.

So these companies try to grow as big as possible as quickly as possible. More cities, more states, more countries. While losing money. But bigger also comes with the need for more resources to manage the process. These companies look to Amazon. And that’s another mistake. But first, let’s consider another reason why scaling massively does not help these companies.

Why do you think Fedex and UPS stay niche? This issue of scaling while losing money, with no profitability in sight, is a problem that has perennially faced one of the largest organizations in the US: the postal service. As shared in ‘How The Post Office Created America’, the postal service grew out of the need to serve as many people in the country as possible while only taking a small piece of overall transaction. Scale without increasing your value creation does not help with profitability. This fundamental premise is why FedEx and UPS will never take over all of the US postal service business despite the opportunity that exists to do so. There are two ways to make money on this model

• – own a small niche in the market that is willing to pay a premium (lawyers who will pay for overnight service, businesses that have overnight service promises etc). But owning a small niche is not what the VCs who’ve invested in the LUPIs want to hear. They want them to go big and then transfer their loss making engines to the public markets.
• – create more value to capture more of the value in the chain. It’s why the post office is always pushing stamps (and selling it through other outlets) and always overcharging for tape and boxes. This second approach to making more money is why the LUPIs point to Amazon. But..

Amazon is the wrong analog. For a long time everyone complained about Amazon losing money. Being a broker, because that is what it truly was as it did not own most of the assets it sold, meant the company only took a small cut of product sales. The company could not increase margins without eating into the margins of sellers, the true asset owners, on its site. So it kept losing money while growing bigger.

The brilliant step Amazon took was to increase the value to the asset owner. Amazon rented its own assets to the sellers, by helping them store their inventory, and could justify capturing more of the value. Sellers offloaded physical storage and logistics to Amazon and, in exchange, Amazon took (takes) more of the pie. With Amazon Web Services (a $3.5Bn business in its own right) Amazon has replicated this model to new types of asset owners, internet and app companies across the world.

The LUPIs do not have this value additive parts to their models. Yet.

They stay losing money… This ‘own the resource and rent it out’ model is what Uber has tried to replicate by leasing cars to drivers, plowing money into self driving cars etc. Like Amazon, until the brokerage element of the business model becomes just one part of a full stack solution, a full stack that includes asset ownership and rental, LUPIs (and their investors) will have to contend with the loss making nature of the broker model as technology improves information flow.

The constraint is not faster horses or sleeker technology. The constraint is that there is only so much money to be shared between all parties when you insert your app (and the back-office that supports that app) between a consumer and the product/service they want to consume. The constraint is that the broker model, even with new technology, is not value additive. At some point someone has to be purged from the system, and it won’t be the asset owner, producing or delivering the service, or the consumer, who pays for the service.

Don’t get me wrong, these companies will generate gobs of money along the way. But, much like the Pony Express, the horse will eventually run out of power. Especially when something that is disruptive and isn’t splitting the pie into many smaller pieces comes along to serve the customer in a different and unexpected way… Your thoughts?

Read Seyi Fabode’s complete story with diagrams etc. at:

https://hackernoon.com/why-companies-like-lyft-uber-postmates-instacart-etc-will-never-be-profitable-ecdfde647175#.x2jvnke7n

• Never profitable?

Bloomberg reports that China’s bike-sharing war will spread beyond the country this year with Mobike planning to more than triple its coverage to more than 100 cities globally before the end of 2017.

Mobike’s orange-hued bicycles have become a staple of Chinese sidewalks since it started formal operations last year. It’s attracted hundreds of millions of dollars from backers including Tencent Holdings Ltd., Warburg Pincus LLC, TPG Capital, Temasek Holdings Pte and Foxconn Technology Group. The startup will officially start services Tuesday in Singapore, its first non-Chinese location, where rival Ofo has also expanded.

Once the symbol of China’s working class, bicycles have become the latest battleground for global capitalists who are pouring money into apps that allow users to rent them in 30-minute increments. The advantage for clients is the ability to leave bikes wherever they’d like. Some of the largest providers in the nascent sector are already looking to expand overseas to gain scale, as the number of domestic players reaches saturation.

“This year our hope is to enter more than 100 cities,” said Hu Weiwei, a Mobike co-founder, adding they were currently in about 30 hubs around China. Much of that expansion will be domestic, but she said Mobike will also cover international cities beyond Singapore this year. It didn’t have a target for how many, Hu added.

Mobike has created a Singapore-specific model that obeys local safety regulations and will place the bikes at locations away from the city center to prevent congestion, she said.

That helps address an issue that’s been contentious back home. Chinese media has reported that the Shanghai Municipal Government is banning bike-sharing services from placing new bicycles on the city’s sidewalks. A Mobike spokeswoman said the government agency had already denied the accuracy of those reports.

Ofo’s overseas expansion also includes the U.S. and U.K., the company has said.

• Bikes: the new battleground.

Dutch technology firm 2getthere has been awarded the contract to deliver a new automated vehicle system in Dubai that will link new waterfront lifestyle destination Bluewaters with the city’s network of metro stations. The innovative new transport system will have a capacity of 5,000 people per hour per direction, with the automated vehicle connection between Bluewaters and the metro set to become the largest of its kind in the world and is considered an example of the future of autonomous transport solutions.

Home to Ain Dubai, the world’s tallest and largest observation wheel in the world, Bluewaters is a destination under construction 500 metres (1,600 ft) off the Jumeirah Beach Residence (JBR) coastline, opposite The Beach and near Dubai Marina, in Dubai, United Arab Emirates. The island is a colourful beacon adorning the city’s spectacular coastline and skyline, with a collection of townhouses, penthouses and apartments; retail and dining experiences and two hotels, linked to the shore by a multi-modal transport system ensuring easy access to the island.

When completed, Ain Dubai will be able to carry up to 1,400 passengers in its 48 capsules, and provide views of Dubai Marina and landmarks such as Burj Al Arab, Palm Jumeirah, and Burj Khalifa. Its base will also serve as an exciting entertainment zone.

Largest showcase of autonomous transport worldwide

The awarded automatic transport system fits Dubai’s objective to have 25% of all trips completed by automated systems by 2035. The automated transport system at Bluewaters will feature 25 driverless Group Rapid Transit (GRT) vehicles capable of carrying 24 passengers each, connecting stations on the island and Nakheel Harbour and Tower Metro Station approximately 2.5 kilometers apart. The capacity will initially be 3,350 people per hour per direction, with the possibility to increase to 5,000 people per hour per direction. The trip time will be approximately 4.5 minutes.

The application is also the first to feature a 2getthere’s 3rd generation GRT vehicle. This automated vehicle can serve in Automated People Mover applications as well as an autonomous transit system on public roads, integrating the necessary sensory technology. 2getthere CEO Carel van Helsdingen: “We believed from the start that our system and technology provided the best fit for the application. It is rewarding to be under contract.

The award of the project clearly shows the increased interest in 2getthere’s systems throughout the Middle East. This is based to a large extent on our excellent track record in Masdar City and Capelle aan den IJssel in the Netherlands, where we operate comparable systems with a high availability and reliability in harsh climate conditions”.

2getthere will realize the project through its Middle East Joint Venture with United Technical Services. According to 2getthere Middle East and United Technical Services COO Ziad Al Askari, the solution provided for the connection to Bluewaters is a perfect fit with the  Autonomous Transport Strategy as a pillar to achieve a sustainable economy for the UAE.

Al Askari: “His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, recently launched an strategy for smart self- driving transport as part of Dubai’s strategy to become the smartest city in the world. By 2030, 25 per cent of all transportation trips in Dubai will be smart and driverless. As such we are proud to contribute to this ambitious goal.”

Van Helsdingen is convinced the automated vehicles will have a great appeal and will encourage more people to visit Bluewaters by public transit. He also sees new opportunities: “The Bluewaters application demonstrates the capability of 2getthere’s systems to provide significant capacities, making them a financially attractive alternative for the expensive, traditional rail-guided APM systems at airports and campuses. Basically we are applying Level 4 autonomous vehicles on a dedicated track to provide a high capacity and throughput. We are working on introducing these vehicles in mixed traffic, similar to the extension of the Rivium application in the city of Capelle aan den IJssel (the Netherlands) just announced two weeks ago.”

In that respect, 2getthere expects a logistical paradigm shift in the coming years. “On one hand, it is led by metropolitan policy makers in the Middle East and Asia in search of smart city solutions. On the other hand it will increasingly driven by the technology and automotive sector in de US (e.g. in Sillicon Valley and Detroit) responding to the call for cost-effective and environmental friendly last mile solutions. The latter ones connect medium-sized airports to city centers and convert corporate campuses, that are hosting 10,000 people or more, into smart cities.

• The Dubai-application is also the first to feature a 2getthere’s 3rd generation GRT vehicle.

The China Development Forum, taking place in Beijing from March 19 to 20, gathered government representatives and international business leaders from around the world to discuss the future of China’s economic development. Several hundred attendees are exploring this year’s topic “China and the World: Economic Transformation through Structural Reform” in sessions at the Diaoyutai State Guesthouse. Daimler Chairman Dr. Dieter Zetsche at the forum outlined the key trends in the automotive industry and the company’s vision for reshaping mobility.

Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “The automotive industry is experiencing fundamental change: connectivity, autonomous driving, sharing and electric mobility. Each of these has the power to turn our entire industry upside down. And I truly believe: China can be ‘the turbo’ of this transformation. Electric mobility, for instance, is developing quickly here. And we are aiming to further contribute to this development by planning to produce our new generation of electric Mercedes-Benz models also in China. We are committed to delivering innovation and believe to have a common target with our partners: a both sustainable and highly fascinating auto industry in China.”

Mr. Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China: “The automotive industry is changing rapidly, perhaps nowhere faster than in China. Looking ahead, we will continuously innovate to bring Chinese customers new technologies, products and services, to shape the future of mobility through connectivity, autonomous driving, sharing and electric mobility – our C.A.S.E. strategy. As China’s automotive industry continues its positive development in 2017, we, together with our partners, remain confident in the future of both the market here and our place in it.”

In China, through its cooperation with strong local partners, Daimler has created the right conditions for further growth with healthy and profitable dealer partners, additional production capacities, and a broader product range. The country continued to be the largest individual sales market globally for Mercedes-Benz Cars in 2016. This year, Daimler will continue to invest more in business innovations, further enhance customer experiences, and explore future strategies to address larger mobility needs.

“Made in China, for China” commitment

Today, around two-thirds of the Mercedes-Benz passenger cars sold in China are manufactured locally. A key to this success has been an emphasis on the local research and development base, which currently employes 700 engineers and designers. Together with its Chinese partner BAIC, Daimler also continuously invests in local production. In 2016, the two companies agreed on the investment of four billion RMB (more than €500 million) in the further expansion of the Beijing-based engine plant.

Daimler remains committed to providing Chinese customers with innovative products and services in the fields of connectivity, autonomous driving, sharing and electric mobility. For instance, the new E-Class Long-Wheelbase launched last year in China marks a milestone on the road to autonomous driving, featuring an array of connectivity technologies and services tailor-made for local customers. As a leading mobility service provider, Daimler was the first premium automaker to offer car-sharing in China. The free- floating car-sharing service car2go launched in Chongqing in April 2016.

Given the growing importance of electric drive in the Chinese market, local production of Mercedes-Benz passenger cars also includes the C 350 e L plug-in hybrid model, and several imported plug-in hybrid models are also available in China. Daimler further extended its NEV portfolio with the recent introduction of an upgraded model of DENZA, the company’s pure electric vehicle brand. As the Chinese market holds great potential in the area of electric mobility, Daimler will continue to invest in R&D efforts to develop more efficient and environmentally friendly NEVs. The company is also planning to build cars of the EQ brand in China.

• Dieter Zetsche outlined the key trends in the automotive industry and Daimler’s vision for reshaping mobility.

Mercedes-Benz’s showing at this year’s Mobile World Congress (MWC) in Barcelona being held from 27 February to 2 March is all about CASE: “Connected”, “Autonomous”, “Shared & Service” and “Electric Drive”. Under the umbrella of the cross-Daimler digitisation strategy, the inventor of automobile is showcasing products, initiatives and the latest innovations from its research and development activities.

Daimler is also driving digital transformation at the Mobile World Congress with DigitalLife@Daimler: next to the show stand the DigitalLife Café offers an open platform for collective dialogue. One of the real highlights at the MWC is the Live Talks with experts from various Daimler AG business units.

Sascha Pallenberg, one of the very first tech bloggers, hosts the Inspiration Talks that will take place three times daily and focus on digital services, trends and the culture of innovation. “For us, digitisation is an important instrument for shaping the future of mobility. The Mobile World Congress provides a powerful international platform for dialogue with industrial experts from the worlds of both hardware and software. With its thrilling atmosphere of innovation, the MWC inspires us to keep shaping the future of mobility together with the digital avant-garde,” emphasises Wilko Andreas Stark, Head of Daimler Strategy & Mercedes-Benz Cars Product Strategy and Planning.

Hackathon participants from the DigitalLife Campus series are also getting involved. The ten coders of the current Hack-on-Bus Tour will present their results. This forms the final of the DigitalLife Campus 2016 – an initiative that is accompanying Daimler on its journey towards digital transformation with various unconventional formats. The participants from the “DigitalLife Campus” hackathon series will also show what they have achieved on the drive from Stuttgart to Barcelona in their specially equipped tour bus in response to the challenge they were set: programming a driverless RoboCab made from Lego components. The tour bus set off from Stuttgart towards Barcelona on Saturday with the international team of participants on board.

Mercedes-Benz is demonstrating the virtual reality experience at the MWC with the help of two examples. Firstly, visitors can experience the drive technology, design and connectivity features of the Concept EQ show car up close with the help of VR goggles. And secondly, the complete digital configuration of a production vehicle provides customers with a realistic means of familiarising themselves with their dream vehicle in detail long before they actually buy it. Interaction icons make it easy to modify details of the specification – such as the wheels, paint finish or interior colour scheme. A prototype version of the VR installation is already in use in Germany and Great Britain.

In addition, Mercedes-Benz will be demonstrating the next steps on the road to developing the cognitive car, while “Fit&Healthy” will provide a vision of how society’s growing health consciousness can be intelligently combined with future mobility. Mercedes me also has an important role to play at the show. Comprehensive smartphone integration? Checking information such as the fuel level? No problem at all with ‘Mercedes me’- connect. Smartphones are able to double as a door opener – at any time. As many as four virtual vehicle keys can be activated from a smartphone.

The mobility brands moovel, mytaxi and car2go are also at the show. With 2.2 million customers at 26 locations, car2go is the global market leader in the field of flexible car sharing. Vehicles are located, booked and paid for solely by means of a smartphone.

Also featuring at the MWC is the mytaxi taxi hailing app, the first app in the world to allow a direct link to be established between passenger and taxi driver with a simple tap on the smartphone. With over 10 million downloads worldwide and 100,000 registered taxi drivers, it is the leading taxi hailing app in Europe and is currently available in over 50 cities in ten European countries.

The aim of moovel is to allow people access to urban mobility anytime and anywhere. In Germany, moovel is the world’s first app that can be used to search for, book and pay for a host of mobility services. In the USA, moovel transit is the leading provider of mobile ticketing solutions for transport operators. A ticket is sold via moovel apps every two seconds.

• Digitization as a control lever for the future of mobility

Only five years ago, the autonomous vehicle future seemed like a distant vision. This year at CES, the “frenzy” over autonomous vehicles stole the show with dozens of live demos, partnerships, and product announcements. In fact, 13 of the world’s 14 largest automakers have announced plans to bring autonomous vehicles to market, and 12 of the world’s 14 largest technology companies have announced plans to build technologies to support and operate autonomous vehicles.

This sudden interest in autonomous driving has bid up the “going rate” for autonomous driving talent to, at least in one case,  $10 million per person (Harvard, MIT, CMU, and Stanford students take note!). Clearly, many large companies are investing heavily in autonomous driving technology because they see that autonomous cars have the ability to drastically change the auto industry, and they see the enormous cultural change that the presence of AVs could create. If we spend more time in the car and have more time there to do stuff … they want to be there.

As investors we have been most interested in watching how various stakeholders are shaping their strategies for competing in this market. For example, will automakers build their own autonomous technology, rely on partners, or both? Do automakers think they will continue selling autonomous vehicles to consumers or only to ride-sharing services? Will ride-sharing services companies want to move into other areas of the industry including building autonomous technologies?

Here is our view of the current state of the autonomous vehicle value chain. The three high-level layers of the autonomous vehicle market are

• Service providers (e.g., ride-hailing, ride-sharing, rentals)
• Technology providers (both hardware and software)
• Automobile manufacturing

We see a significant number of companies sitting in between layers – such as Tesla building an autonomous driving system as well as being a car manufacturer – and we also see companies that have historically operated in one area making large investments of capital or time in other layers in order extend into other areas of the value chain. An example of this is ReachNow, BMW’s rental and ride hailing service, which is, among other things, a hedge against being cut out of a possible future where ride hailing vs. car owning is the norm.

Each of these companies sees an opportunity to capture a larger portion of the end-state autonomous vehicle value chain for itself, and they are positioning themselves accordingly.

In addition to investing or acquiring companies or talent, companies have also begun forming partnerships to ensure they do not get cut out of valuable portions of the autonomous vehicle market or caught with single source suppliers for key technologies.

For example, companies have realized that detailed maps might (though it is still under debate) be one of the most critical inputs to self-driving cars for determining whether the car is seeing the environment or another vehicle, person, or object in its environment. This led to several big moves in developing in-house maps and/or acquiring access to other sets of mapping data. For example, in August of 2015, a consortium of automakers bought Here maps for $3 billion; in July of 2016, Uber announced a $500 million plan to map the world’s roads; and in December of 2016, Mobileye announced a partnership with Here’s owners to share their mapping data. Some other interesting takeaways we see from looking across the autonomous vehicle landscape are:

The companies working with the major technology providers are also developing their own homegrown systems. For example, while Volvo is providing Uber with vehicles for its well-publicized Pittsburgh, San Francisco, and Arizona self-driving tests, the car maker is developing its own autonomous systems as well through its Drive Me research project.

We have already seen some high-profile ‘breakups’ in the autonomous vehicle space. After Tesla’s crash, Tesla and Mobileye pointed fingers over who fired who (and whose technology led to a fatal crash), and Baidu and BMW called off their joint work citing different development paces and ideas about research. We will likely see more partnering companies go their separate ways over differences in tech and/or business philosophies.

Most of the major automakers have aligned themselves with a ride-hailing service – either via investment in the case of Toyota-Uber or GM-Lyft or by building servies in house or making a full acquisition. These moves have been interesting because the strength of Uber or Lyft’s driver network becomes less relevant in an autonomous, ride-hailing future. When you can put cars on the road without a person at the wheel, different elements become more important levers of success – namely the ability to manufacture, finance, and maintain cars. This could give automakers a head start later in the game, so to speak. However, success in ride hailing is also dependent on consumer penetration, so companies like Uber and Lyft might have their own leverage over the automaker latecomers.

While we watch the moves that software companies and automotive companies are making in the autonomous vehicle space, we are also tracking what regulators, drivers, and consumers are thinking and saying about autonomous vehicles.

To date, we have been impressed with how proactive federal, state, and local governments have been in their support of autonomous driving technology. Regulators and planners at multiple levels appear to have bought into the potential promise of fewer accidents, less congestion, more productive time for citizens and freed up space now devoted to parking lots in cities. But they are treading carefully, encouraging companies to experiment in safe, controlled ways. When the U.S. NHTSA investigated the fatal crash involving Tesla’s Autopilot, it found that, while it failed in that instance, Autopilot had decreased the number of crashes by 40 percent since its introduction.

However, as this technology becomes mainstream and moves from high-end cars to widespread adoption among ride-hailing and trucking companies, there could be massive disruption to the way the workforce is structured in many different places around the country. A 2015 NPR review of Census data shows that truck driving is the most common job in nearly every U.S. state. Autonomous trucks will have a massive impact on the trucking industry.

As more startups and large companies begin public demonstrations and public releases of their products, they must find the right ways to introduce these technologies for both public safety and public perception. “Drive fast and break things” will not be the right approach to releasing autonomous vehicles, and companies need to be thoughtful about the best way to introduce these technologies.

As investors (and eager consumers and citizens) we are watching how the AV market is evolving and looking for opportunities. The innovations over the last five years happened twice as fast as expected, so imagine where we could be in another five – or maybe just two and a half!

This opinion piece was written by S. Somasegar and Daniel Li and was published in VentureBeat. S. Somasegar is Managing Director at Madrona Venture Group. You can follow him @ssomasegar. Daniel Li is Senior Associate at Madrona Venture Group. You can follow him @danielxli.

• Tests with autonomous vehicles are announced every day. Photo: Uber.

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