By Mark Boada, Senior Editor
Lukas Neckermann is the managing director of Neckermann Strategic Advisors, a mobility consultancy based in London, England. He was the keynote speaker at NAFA’s International Fleet Academy in Tampa, Florida this year. Fleet Management Weekly interviewed him the day after he delivered his presentation.
You were talking about how we are in the midst of a mobility revolution. Can you please explain the basics of what is happening and why?
We are in the middle of a transformation based on three converging trends. The first trend is zero emissions, or the electrification of not just the automobile but all forms of transport, especially road transport. Second is zero accidents, which is achievable by the widespread adoption of self-driving or autonomous vehicle technology. And the third is zero ownership, which is the trend that encompasses car sharing, ride hailing, ride sharing and more broadly speaking the sharing economy
How close are we to seeing this revolution come to fruition? Are we at the very beginning or are we well into it?
The mobility revolution is coming at us a lot faster than most people realize. The bits and pieces are coming together. We already have electrification in more and more vehicles. The number one selling vehicle in the U.S. in the super premium sedan class is an electric vehicle. Full electrification is for me a foregone conclusion, in due course. Autonomous vehicles are being tested all over the world and car sharing is becoming more and more important, in particular in urban environments.
Is this revolution proceeding at a different pace in different parts of the world right now?
Different countries, different cities, different environments have varying speeds in terms of adopting the elements of the mobility revolution. You have some countries that are, frankly, gung-ho on electrification. In Norway, over 25 percent of the vehicles are electrified, and The Netherlands is also charging ahead into electrification. Autonomous vehicles are being tested right now in Singapore, several states in the U.S., in the U.K., in France, and they will be a significant part of the Tokyo Olympics coming up in Japan, as well. So, you have different highlights all over the world.
As for ride hailing and sharing, just take a look at the success of Uber in cities like in New York and London, where you have 40 thousand, 50 thousand Uber drivers. Take a look at car sharing in Berlin where you have thousands upon thousands of car sharing vehicles that are taking the place of privately owned vehicles.
What is the biggest challenge to the adoption of self-driving vehicles. Is it technology?
There are a number of elements that come together to make autonomous vehicles a reality. Technology will not be a limiting factor, I believe. We have the technology now to drive vehicles robotically at safety levels that approach or exceed that which humans can do. I think limiting factors at this point in time are regulatory, and that insurance companies are still playing catch up in terms of creating policies for autonomous vehicles. But the final and most critical factor is going to be social acceptance. That first experience of letting go of the steering wheel is something that people just need to get over. People will go through that over time and at some point the steering wheel will disappear.
When do you expect that autonomous vehicles will be the norm on our roads?
We will start to see autonomous vehicles in defined environments, parking lots, amusement parks, airports, frankly, over the next 12 to 18 months. We will see autonomy being implemented in the vehicles that we drive progressively over the next 12 to 36 months. You already see [semi-autonomous] technology being made available by the likes of Tesla, Mercedes, Volvo — even Cadillac has the technology installed. We will also begin to see autonomous technology in commercial vehicle fleets. Both in Europe and the U.S., there are some very, very interesting tests of platooning, which is a chain of vehicles driving autonomously behind a lead vehicle, which itself may or may not be driving autonomously.
Do you see commercial fleets being leaders or laggards in this mobility revolution?
I think that fleets can be leaders in the mobility revolution. The electrification of the vehicle will provide clear TCO advantages, specifically for urban fleets. We are already beginning to see that. Some of the research that we have done with fleet managers shows that implementing zero emissions vehicles in urban environments creates real cost savings, as well as happier drivers.
Autonomous vehicle implementation by fleets will happen first in defined environments and then progressively as fleets begin to see the cost savings. We already know that the core elements of autonomous technology, like AEB – autonomous emergency braking – is a precursor to full autonomy that saves lives and it saves money. From a fleet perspective, money is going to play a critical role in adoption.
What kind of reaction have you seen to your vision on the part of the fleet managers you’ve been talking to?
I find fleet managers are open and engaged in terms of the message that we are sending. Fleet managers have as a key objective the safety, as well as the total cost of ownership, which we are now calling total cost of mobility. As fleet managers evolve into mobility managers with responsibility that encompasses a broader scope of activities, they are looking to see how elements can be integrated into their everyday lives.
You say there is a clear business case for the mobility revolution. What kinds of savings do you see fleets reaping as they move toward autonomy, electric vehicles and car sharing?
When we think about the TCO benefits of electric, autonomous and shared vehicles, every fleet of course has to do its own homework. But if you consider electrification alone, savings of 10 to 15 percent are possible for urban fleets if you consider places like London and Milan, which charge traffic congestion fees. If you think about bus fleets, which run defined routes, you can generate savings if you either convert them to on-demand routes or turn them into autonomous routes.
The final element is the asset use. If any manager in a company went to their CFO and said, “Look, we are going to buy something that we are only going to use five percent of the time,” they would get fired. But fleet managers have done that for decades on end. And now we have the potential to increase the utilization rates of vehicles by making them shared, by giving staff new options – new mobility options – for their perk or for their utility vehicles.
Are fleets going to convert from assigned vehicles to pooled vehicles, or are they more likely to use car sharing company services, or both?
Fleet managers will need to consider what arrangement makes sense for them. If you consider pool cars or gray fleet cars, there is low-hanging fruit there in the sense that corporate car sharing is already available and offered both by captives and some of the leasing companies, as well.
Fleet managers may also opt to convert the vehicles that are already part of the asset base into shared vehicles. You can see that happening in some of the more progressive fleets where they say, “Look, managers are driving into the company at 8:00 in the morning and the car sits parked the whole day. Making those vehicles available to other drivers for those eight to 10 hours creates, obviously, a real opportunity for greater asset use, and can return some of the investment in those vehicles back to the company.”
Have you seen fleets actually change to car-sharing?
I have spoken to fleet managers who have moved their entire pool vehicle fleet into corporate car sharing. Some of those also take it one step further and make those vehicles available to the community, for example, at the weekend where they say, “Alright, staff can use the pool vehicles Monday through Friday, and then Saturday and Sunday members of the community or the public can effectively rent those, share those vehicles.” And the fleet obviously gets the benefit out of that.
In light of all of this, what do you recommend that fleet managers do now?
I think there is a real opportunity right now for fleet managers to take the lead, but also to work together with their leasing companies and with OEMs to redefine what their vehicles and fleets will look like over the next five to ten years.
Lukas Neckermann
Neckermann Strategic Advisors
