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The Smart Connected Vehicle is Here – Now We Need Smart Connected Roads!

In the 3rd quarter of 2014, AT&T connected more new vehicles than new smartphones for the first time. Growing to reach a 40% share, automaker and aftermarket telematics will be the dominant sector for cellular M2M connections, according to ABI Research. The next frontier to create a differentiating connected vehicle experience is to connect our vehicles to our homes, our smart grids and most importantly a smart roadside infrastructure to deliver on the promise of safer, smoother and more enjoyable rides on our roads.

But smart connected roads appear to be utopia faced with a reality where current road funding is failing to even maintain our roads, and where bad roads are imposing a hidden tax on our economy, and as a result leaving underfunded governments to hold the lifeline for transportation innovation.

It is upon us again here in the Midwest. Our roads are facing the grueling cycle of freezing and melting that will strip away the band aids and rip open hardly healed scars from last winter and force us motorists to steer clear of minefields of treacherous potholes. In 2014, my “tax” for driving on substandard roads was two new suspensions, new steering seals and a set of new tires. Each vehicle owner in the U.S. pays this nearly $400 dollar “bad road tax” each year, totaling $80 billion according to a study by TRIP.

The “bad road tax” nearly doubles the roughly $100 Billion in fuel tax and tolls the U.S. collects and spends each year to maintain our road infrastructure. $100 Billion translates into a 0.4% return on our paved road assets of estimated $27 trillion in value and means that we are “sweating” our road transportation infrastructure for 250 years.

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Two to three times the available annual budget is needed to improve conditions, but the increasing cost of road improvement and the eroding motor fuel tax base further exacerbate the crippling budget shortfall. That is why more than 25% of U.S. roads and bridges are in significant need of repair and cause $80 billion damage to our vehicles each year and why we are wasting over 100 hours in congested traffic each year, a cost of another $120 Billion.

We need new funding sources to fix our roads and to connect them for a future where intelligent transportation systems will be run with networked information. While there is broad consensus on these worthy goals, suggestions on how to get there are often met by countless concerns of the guardians of the status quo. Let me share some food for thought from many discussions with government and industry stakeholders, some admittedly off the beaten path.

Nobody wants tolls or another stupid tax? Maybe, but every one of us indirectly pays more than $7,000 per vehicle per year in “hidden societal taxes” for bad roads, for crashes and for the time we lose stuck in traffic. A Smart Road Price would make these hidden costs visible, be a tool to reduce them and spawn innovations that benefit all of us. In contrast to conventional mileage based tolls, a Smart Road Price charges for driving on roads —based on time of day, road congestion, road type and condition, allowable speed, vehicle weight, fuel economy, or emissions— thus provides smart incentives for drivers and road operators to balance supply and demand more effectively. Overly stressed parts of the road system would dynamically command price premiums to flexibly divert demand to less costly routes and, eventually, to finance the elimination of bottlenecks. Drivers could invest in the roads most traveled and most important for their personal commutes, which would yield returns in both time and money for them.

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The standard Smart Road Price could be set at the average fuel tax a vehicle owner pays per mile. In addition, participation could be made optional. This way, drivers could elect to pay a Smart Road Price in exchange for no longer having to pay fuel tax. Increasing the fuel tax over time towards a planned long-term phase out could provide further incentive to join Smart Road Pricing immediately.

U.S. toll projects have not been overly successful? Approximately 34 percent of the highway system across Europe is toll-operated, compared to 3 percent of the national highway system in the United States. If a no-cost road alternative is readily available, many drivers will opt for the no-cost alternative, undermining the very business foundation of toll operated roads. One way to address this issue is to implement a ubiquitous Smart Road Pricing system that covers the entire road system, as it is being discussed in Germany and other European countries. However, a Smart Road Price system would require ubiquitous vehicle connectivity platform that would replace incumbent technologies like proprietary toll collection systems, road gantries, license plate recognition, and certainly “vignettes”.

Who pays for the on-board connectivity unit? Most new vehicles produced in the U.S. will be equipped with embedded connectivity. Connected vehicle life cycle and owner management, navigation and infotainment, and most importantly safety – 80% of crash scenarios can be addressed with vehicle connectivity – are making a compelling case for vehicle connectivity. An App that collects a smart road price would add another reason to justify this investment. Waiving vehicle-licensing fees for one or more years to subsidize the on-board unit could further accelerate the penetration in both, the new vehicle and more importantly the vehicle aftermarket.

Who pays for the connected roadside infrastructure?Connecting vehicles to roadside infrastructure in the United States could be a profitable business at a cost of only a tenth of a cent per vehicle mile traveled, or one dollar per vehicle per year. While U.S. Department of Transportation (DOT) cost estimates for connecting vehicles to infrastructure have varied over time, an estimate we used indicated that $2.3 billion in revenues is needed to fund a roadside infrastructure business with 50% gross margin.

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Who should lead this – government or industry? A city, county, state or the federal government could transfer its road assets – or parts of them – into Connected Road Investment Trusts, in return for partial cash out or as an investment, if public asset ownership is preferred. The Connected Road Investment Trusts could attract additional private investments in the financial market or from stakeholders like road builders, intelligent transportation system providers or mobile network operators. The funds raised could be invested in an Intelligent Transportation Services NewCo that collects a Smart Road Price for the use of these roads.

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In due time, Smart Road Price revenue could be deployed to fix our roads and to build an intelligent transportation system that connects vehicles to traffic operations, traffic lights, streetlights, electronic signs, road sensors, parking spots, and provides ubiquitous roadside internet access. Intelligent Transportation Services could be sold to drivers to reduce the risk of crashes and congestion and to infrastructure operators to improve planning and maintenance of roads.

This would help reduce the nearly $400 dollar cost each vehicle owner pays for driving on our substandard roads, and help unlock benefits of more than $1,400 per connected vehicle per year.

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The Connected Road Investment Trust would also accelerate the growth of the connected vehicle and intelligent transportation system industries and become an engine for job creation. Based on earlier estimates, selecting the top 20 percent of the nearly 1 million miles of the U.S. national highway system with highest congestion, crash risk or repair needs, and assuming a Smart Road Price participation of 1/3 of U.S. drivers has the potential to create between 400,000 and 550,000 jobs.

However, making this idea real would require a big leap of faith in any land of [the] free roads. Therefore, other nations with even more pressing transportation problems or more appetite for making connected transportation an economic growth engine, may end up winning this global innovation race.

Personally, I am a strong believer and ready to advance this “food for thought” toward the “art of the possible”.

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Data Analytics, Targeted Advertising, and Privacy Go Riding in a Connected Car

I put a Zubie in my car today. I really wish that NPR’s “Car Talk” radio program was still on the air, so I could call in and say that sentence to Tom (sadly, deceased this week) and Ray Magliozzi, aka the “Click and Clack Brothers.” They’d have a lot fun with that.

After seeing so many interesting connected transportation solutions from Cisco and others at the recent ITS World Congress in Detroit, I felt inspired to get my own car connected! Zubie is one of a several available apps and services that allow you to “manage” your car from a mobile app, e.g., perform a car “health check,” see how well you drive, create geofences to track your car, for example, when your newly-licensed teenage child borrows it for the night.

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I signed up for Zubie even though I know they’re going to make money from the car-sourced analytics that they get from my car (beyond subscription fees, waived for the 1st year). According to their privacy policy, they will gather data about my vehicle usage over time, which includes speed, braking, acceleration, and the geolocation of the Zubie key that I plugged into my car’s OBD-II port. This data Read More »

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IoT at Mobile World Conference with Cisco and SAP

Wow, that was one heck of a week.  MWC 2014 is over, but, it was incredible.  The show was packed, the collaboration with customers was dynamic and, once again, Barcelona was a fantastic host.  For me though, it was also a clear statement that the Internet of Things (IoT) is exciting and gaining steam with mobile operators.  In fact, as I looked through three discreet lenses, I could clearly see the excitement from customers and the advancement of the technologies that will help to enable them.  I walked no less than 5 miles a day, traversing what became my own personal MWC IoT Triangle, jamming in customer and partner meetings in the Cisco booth, running to SAP’s booth to collaborate on our joint demos and then to the Plaza De Palau where I was hosting Smart and Connected City tours. Read More »

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Summary: My Thermostat and the Internet of Everything

To me, the Internet of Everything should provide real-time data converted and translated into actionable information, and this data should be available in the things I use every day. My car, my fridge, my…thermostat?

Read my full article for a closer look!

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IoE: My First Impression

As Cisco is sharing its Internet of Everything ( IoE ) vision today at CES 2014, it makes me reflect on what the future of this technology will look like. We’re in such a connected society now, with more information available to us than ever before. I ask myself, “Will being more connected, with even more information at our disposal be something our society could benefit from?” After evaluating this concept, my opinion is a resounding yes.

Imagine a world where you can have everyday items “speak” to you without having to initiate the action. Our lives are so busy now that having important information alerted to us without needing to query it ourselves is a huge idea. Here are some immediate thoughts on how the Internet of Everything could help solve everyday problems.

How many of us have gotten into our car late for some sort of appointment, and while driving, realized we didn’t have enough gas to get where we needed to go? Having a sensor in the car alert you that you’re low on gas would be a time/stress saver. In my house creating weekly grocery lists can be cumbersome. IoE connected kitchenGoing through cabinets one by one seeing what’s needed, and putting them down on the list. Of course, this always happens right when you’re ready to leave for the grocery store. Imagine going up to your refrigerator and having it email you a list of items needed. That’s huge, and can save you from having to run back to the store more than once because you forgot that important dinner item! Read More »

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