Mobility on Demand and Automated Driving Systems: A Framework for Public-Sector Assessment (2022)

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19 CHAPTER 3: THE COMMODIFICATION OF TRANSPORTATION THE COMMODIFICATION OF TRANSPORTATION SECTION OVERVIEW This section discusses the commodification of transportation and answers key questions including: • What is the commodification of transportation? • What is MOD? • What is the MOD ecosystem? WHAT IS THE COMMODIFICATION OF TRANSPORTATION? The growth of shared mobility is contributing to the commodification of transportation where consumers assign economic values to different modes and engage in multimodal decision- making processes. This process is based on a variety of factors including cost, travel time, wait time, number of connections, convenience, and other attributes. The commodification of transportation is contributing to new on-demand access models, such as MOD. The following subsections describe MOD, explain the MOD ecosystem and its enablers, and provide examples of programs that can support MOD. WHAT IS MOD? MOD enables consumers to access mobility, goods, and services on demand by dispatching or using shared mobility, delivery services, and public transportation through an integrated and connected multimodal network (Shaheen et al., 2017a). MOD is an emerging concept and can be characterized by five aspirational attributes: 1. Commodifying transportation choices into economic terms based on cost, journey time, wait time, number of connections, convenience, and other attributes. In this commodification, the consumer is making travel decisions based on wait time, travel time, price, and other factors. These factors are causing commuters to use different modes of transit. 2. Embracing the needs of all users (travelers and couriers), public and private market participants, and services across all modes—including motor vehicles, pedestrians, bicycles, public transit, for-hire vehicle services, carpooling/vanpooling, goods delivery, and other transportation services. 3. Improving the efficiency and reliability of the transportation system and increasing the accessibility and mobility of all travelers. 4. Enabling transportation system operators and their partners to monitor, predict, and adapt to changing transportation conditions across the entire mobility ecosystem (network). 5. Maintaining the ability to receive data inputs from multiple sources and provide responsive strategies targeting an array of operational objectives.

20 REPORT WHAT IS THE MOD ECOSYSTEM? MOD’s broad characteristics allow it to encompass a variety of modes and enable an integrated and multimodal operations management approach that can influence the supply and demand sides of a broad transportation marketplace (Shaheen et al., 2017b). The supply side is comprised of the professionals, operators, and devices that provide transportation services (e.g., public and private mobility services, fixed-route public transit, goods delivery services, transportation facilities, and information services). The demand side consists of transportation service users (e.g., all travelers, couriers, consumers, and modal demand). Figure 5 depicts this broad MOD ecosystem. Figure 5. The MOD Ecosystem Source: Shaheen, et al., 2017a

21 Mobility as a Service The MOD ecosystem can be supported by innovations, such as MaaS. MaaS is a multimodal transportation concept currently emerging in Europe that offers users access to a variety of MOD modes through a single platform. MaaS is a mobility marketplace in which a traveler can access multiple transportation services, such as public transit and bikesharing, over a single digital interface. MaaS primarily focuses on aggregating passenger mobility services and making them available through subscription services. MaaS is characterized by the brokering of mobility operators, repackaging, and reselling mobility options as a bundled package. Although MOD and MaaS share a number of similarities, MaaS primarily emphasizes passenger mobility allowing travelers to seamlessly plan, book, and pay for a multimodal trip on a pay-as-you-go and/or subscription basis. MOD, on the other hand, emphasizes passenger mobility through on demand access to a variety of transportation modes, this access may be supported by or facilitated through MaaS. Table 3 describes the differences between MOD and MaaS. Table 3. MOD versus MaaS Characteristic MOD MaaS Location United States Europe Description Provides users with a variety of on- demand transportation options to choose from Aggregates and presents a variety of transportation options including MOD modes Payment Pay per mode If fare payment for multiple modes is integrated, pay per trip Pay a subscription fee to a variety of services (e.g., flat fee for bikesharing and carsharing services per month) Pay-as-you-go Example In 2017, the LAVTA in Dublin, California partnered with two TNCs and a taxi company to offer residents subsidies on on-demand rides that begin and end in Dublin. The goal of the program is to offer residents more mobility options and reduce costs on underused bus routes (Shared-Use Mobility Center, 2017). The service has since expanded to the surrounding towns (Baum, 2020). UbiGo in Northern Europe operates as a transportation brokerage service providing member households a mobility subscription in place of car ownership. The monthly subscription allows households to pre-purchase mobility access in a variety of increments on multiple modes, operating like a multimodal “digital punch card” for a number of transportation services (including public transportation, carsharing, rental cars, and taxis) (UbiGo, n.d.). In addition to MaaS, the MOD ecosystem is supported by the shared mobility stakeholders and additional key enablers: 1. Policies and regulations, 2. Infrastructure, and 3. Enabling and emerging technology. The following subsections provide further information on these MOD enablers.

22 REPORT Policies and Regulations Policies at the federal, state, regional, and local levels can substantially impact MOD deployment and operations. Figure 6 summarizes common policy and regulatory areas that can impact MOD. Figure 6. Policy Regulatory Areas that Impact MOD Table 4 describes these policy areas with accompanying examples. MOD Health, Safety, and Consumer Protection Taxation Insurance Rights-of- Way Parking and Access Equity and Acessibility Public Participation Data Sharing, Privacy, and Standards Livery

23 REPORT Table 4. MOD Policy Areas and Examples Policy Area Description Example Health, Safety, and Consumer Protection Administrative regulations, ordinances, and laws that can require insurance, physicals, and the disclosure of factual information Requirement of microtransit riders to wear helmets Taxation Taxations and tax incentives for transportation services Tax incentives for shared rides (e.g., carpoolers) Insurance Insurance coverage limits and requirements on transportation services that determine their legal operations Extension of company insurance coverage to gig employees Rights-of-Way Parking and Access Management of rights-of-way and curbspace access Payment of fees to access rights- of-way (e.g., curbside parking) Equity and Accessibility Legal and ethical requirements to ensure transportation services and vehicles are accessible by a variety of people Alternative pricing structure for low-income households Public Participation Legal and ethical requirements to ensure public participation in the decision-making process Involvement of the public in the decision-making process (e.g., townhalls) Data Sharing, Privacy, and Standards Development of best practices for data sharing, privacy protection, and adherence to standards Data sharing agreement between private operators and public agencies to track vehicle locations and accessibility Livery For-hire vehicle service (e.g., taxi) regulations Application of fleet caps for taxi and TNCs The policies and regulations applied to MOD may dictate how and where MOD can operate as well as supportive infrastructure elements that can maximize the potential benefits of MOD. Infrastructure MOD deployment will likely impact existing infrastructure and may necessitate the repurposing of existing, or development of new, infrastructure. Similar to shared mobility deployment in different built environments, MOD may impact different built environment types (e.g., city center, rural) differently. In addition, depending on the policy levers applied to MOD, MOD could increase congestion, VMT, competition for rights-of-way and curbspace access, single- or low-occupancy trips, and transportation-related emissions. This increased use of existing infrastructure may require more maintenance and repair work and the development of new infrastructure (e.g., highway expansions, implementation of a bridge) to support the increased infrastructure use. Alternatively, MOD could decrease congestion, VMT, rights-of-way and curbspace access competition, and transportation-related emissions while increasing multi- occupancy or pooled trips. This more efficient use of existing infrastructure could decrease the need for maintenance and repair. Depending on how MOD is deployed, MOD may necessitate infrastructure changes including the repurposing of curbside parking into passenger loading zones, re-designation of existing highway lanes to high-occupancy vehicle (HOV)-only lanes, and alteration of parking spaces to prioritize shared rides. MOD may also require the development of new infrastructure elements

24 REPORT including charging stations for electric-powered MOD modes, Wi-Fi hotspots to connect travelers to internet-based MOD services, and creation of lanes (e.g., bike lanes) for shared micromobility services. In addition, MOD may require the development of new, or repurposing of existing, infrastructure to support emerging technologies that enable MOD. The following section contains further information on these potential additions. Emerging and Enabling Technologies In the coming years, infrastructure changes dictated by MOD will likely need to be expanded to include emerging technologies that enable MOD. Figure 7 summarizes emerging technologies that enable MOD, and the following subsections offer further information on these areas. Figure 7. Emerging Technologies that Enable MOD Wireless Networks and Mobile Technologies Reliable and secure communications infrastructure enhances MOD. This infrastructure can gather information from mobility and goods delivery services and communicate it to other systems—allowing this information to better serve users, offer more accurate and safer MOD Wireless Networks and Mobile Technologies Location-based Technologies Smart Infrastructure Information and Communications Technologies Universal Design Mobile Devices and Apps Connected Travelers

25 REPORT navigation, and more efficiently manage traffic. Advances in wireless and mobile technologies allow travelers to access faster connections to mobility and goods delivery services. However, as necessary as wireless networks and mobile technologies are, they present a variety of communication challenges. The information that wireless networks and mobile technologies transmit requires secure communication platforms. Communication networks are becoming increasingly secure through the advent of technologies, such as virtual private network and secure tunnels. These technologies can help protect communication networks from intrusion and security breaches. New security technologies can be further enhanced through identify management software and authentication techniques. Location-Based Technologies MOD is also enabled by accurate positioning and mapping technologies. Mapping technologies allow vehicles to navigate different geographies and provide information on a vehicle’s immediate surroundings to determine its relative position. Mapping technologies need to operate in real time and be flexible enough to adapt to changing conditions. Developments are currently underway to support existing mapping technologies including simultaneous localization and mapping (SLAM) techniques and cooperative vehicles (i.e., vehicles that can use the perception capabilities of another vehicle to navigate). However, improving location-based technologies is challenged by a lack of satellite direction for indoor spaces and the multi-path direction of radio signals. Researchers and manufacturers are continually researching ways to make mapping and other location technologies smaller, faster, more capable, and more affordable. By increasing the capability and affordability of location-based technologies, manufactures can include these features in a wider variety of transportation services (e.g., TNCs, shared micromobility devices). Information and Communications Technology ICT can unify developing communication systems (e.g., wireless networks, smart infrastructure) to grant greater access to and storage, transmission, and manipulation of information. The continued development of ICT has supported the growth of transportation innovations including shared mobility and MOD. The growth of MOD has highlighted the importance of removing barriers to ICT for select groups, such as people with disabilities. ICT technologies are moving toward including capabilities for people with disabilities including text-to-speech, gesture input, speech-to-text, and haptic functions. These additions to traditional ICT systems allow a wider range of users to input to and understand these systems. Continuing to increase the accessibility of ICTs is dependent upon stakeholders’ awareness of inclusive ICT designs, existing laws and policies, and the capacity (e.g., financially, available staff times) of organizations to support accessible ICTs. As MOD continues to develop, inclusive ICT will be an important factor in ensuring MOD is accessible.

26 REPORT Universal Design Similar to inclusive ICT, universal design is a design paradigm focused on designing systems that are accessible and useable by the widest range of users possible. Universal design is a user- centered approach based on seven principles: 1) equitable use, 2) flexibility in use, 3) simple and intuitive use, 4) easily understandable information, 5) room for error, 6) low physical effort requirement, 7) accommodating size and space for use. The wide range of usability that universal design supports allows for systems including ICT, to be easily accessible and does not require specialized design. Developing a standard to adhere to universal design can maximize the application of systems and technical strategies to meet the needs of a variety of user groups. This is particularly important in transportation and MOD where universal design can be used to include all users (e.g., older adults, people with disabilities) in the transportation network. Universal design can be included in a variety of areas of transportation from vehicle design to mobile devices and apps. Mobile Devices and Apps The heightened importance of accessibility in transportation is paralleled by the heightened importance of mobile devices and apps for mobility. A growing number of Americans own a smartphone; however, not all American adults have access to a broadband network at home (Shaheen et al., 2017b). Some adults are predominately dependent on their smartphone for internet access including for real-time transportation information and access to transportation modes (e.g., taxis). In addition, the increasing growth and availability of intelligent transportation systems (ITS), GPS, wireless, and cloud-based technologies is furthering the importance of smartphones for individual mobility. The use of smartphones for transportation information is also supported by the growth of data availability and sharing. Smartphones are can be used for apps including: • Mobility: Offer information from various sources (e.g., B2B services, public transit apps), • Vehicle connectivity: Connect users to vehicles remotely (e.g., start the vehicle from an app), • Smart parking: Provide information on real-time parking availability and offer a variety of payment options, • Courier Network Services (CNS) (also known as app-based services): Facilitate for- hire delivery services (e.g., food delivery), • Health: Monitor health by tracking activity and health data, • Environment/energy consumption: Track environmental impacts and energy consumption of behavior (e.g., travel), and • Insurance: Offer different insurance structures (e.g., usage-based pricing). Source: Shaheen et al., 2017b These apps can assist in decision-making based on psychological, cognitive, emotional, and social mechanisms.

27 REPORT Connected Travelers Smartphone apps, connected vehicle technologies, and other innovations can help connected travelers (including, but not limited to pedestrians, vehicles driven by humans, vehicles driven by machines, transit riders, and bicyclists) exchange information among themselves and other elements of the transportation network. Increased connectivity is supported by continuously improving data sharing speeds and the availability and increasing number of digital natives (i.e., individuals who have grown up with computers and the internet). Connected travelers are also supported by: • Wireless communications technology: Communication systems that can support a field of data connectivity between travelers and infrastructure; • Technology usage: Increasing use of artificial intelligence (AI), smartphones, and computing technology to integrate data systems into the physical world; • Big data:4 Technology-based environments generating large amounts of data and information that can be used throughout the transportation industry; • Crowdsourcing:5 Increasing use of crowdsourced data to inform changes in the transportation network (e.g., traffic conditions); and • Gamification:6 Use of gamification to help facilitate knowledge generation, participation, and support actions toward a specific goal. Source: Shaheen et al., 2017b FTA MOD SANDBOX DEMONSTRATION PROGRAM Increasing commodification of transportation and the expansion of the MOD ecosystem has resulted in federal and programmatic support for MOD. For example, the FTA MOD Sandbox Demonstration Program provides a venue where MOD concepts and strategies, supported through local partnerships, are demonstrated in real-world settings. Key goals of the MOD Sandbox include: • Improving transportation efficiency by promoting agile, responsive, accessible, and seamless multimodal service inclusive of public transit through enabling technologies and innovative partnerships; • Increasing transportation effectiveness by ensuring that public transit is fully integrated and a vital element of a regional transport network that provides consistent, reliable, and accessible service to every traveler; and • Enhancing the customer experience by providing equitable, accessible, traveler-centric service that uses public transportation’s long-standing capability and traditional role in this respect. Eleven MOD Sandbox grantees are piloting a variety of MOD use cases and enabling technologies, such as smartphone trip planners, first- and last-mile programs using shared mobility, and paratransit service using innovative demand-responsive technologies. The MOD Sandbox Independent Evaluation, a review of the performance and impacts of the MOD Sandbox 4 A variety of techniques and technologies that can streamline businesses. 5 Obtaining services, ideas, and/or content by soliciting a large community of users, typically through the internet. 6 Application of gaming principles to non-game activities to incentivize users through fun and competition.

28 REPORT projects, will be completed in 2020. Early lessons learned from the MOD Sandbox Demonstration sites include: • Some public transit agencies liked the ability to name partners without a traditional procurement method, while others would have preferred to issue a request for proposal to solicit prospective vendors. • Public agencies and private sector partners were ambitious in their initial MOD project designs. This resulted in the rescoping or downscaling of many pilot projects. • Several public agencies noted challenges in working with private vendors, particularly related to contracting and data agreements. In some cases, partners were unable to agree to terms. In others, partners employed a range of techniques to more narrowly tailor data sharing requests to include less frequent reporting, more aggregate data reporting, and higher levels of geo-spatial data to protect consumer and proprietary vendor information. • A number of public agencies expressed ongoing concerns about the reliability of private sector partners, such as: 1) partners that overpromised and underdelivered; 2) partners that promised data but were unwilling to share sufficient data for the public agency to report key data metrics to FTA; and 3) partners whose business models evolved through the course of the pilot projects, causing project continuation post-MOD Sandbox to be challenging. • Some project sites reported challenges transitioning from the Sandbox demonstration to regular post-demonstration service because of existing Federal policies and regulations, such as drug and alcohol testing currently required by federally funded initiatives. Identifying sustainable business models and partnerships is key to enabling the continuation of successful programs post-pilot. KEY TAKEAWAYS • Transportation is facing increasing commodification, which involves travelers assigning economic values to transportation modes, allowing them to make multimodal decisions based on a variety of factors. • MOD is a transportation innovation that is based on the principle that transportation modes have distinguishable economic values and is characterized by five aspirational attributes: 1) commodifying transportation choices; 2) embracing the needs of all users; 3) improving the transportation system’s efficiency and reliability; 4) allowing transportation system operators greater flexibility; and 5) maintaining the ability for stakeholders to receive and use a variety of data. • Supply (e.g., fixed-route public transit, private mobility operators) and demand (e.g., consumers) make up the MOD ecosystem, allowing for an integrated and multimodal transportation network. • MaaS, policies and regulations, infrastructure, and emerging and enabling technologies support the MOD ecosystem.