Making autonomous

Vehicles a Reality
LESSONS FROM BOSTON AND BEYOND
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MAKING AUTONOMOUS
VEHICLES A REALITY
LESSONS FROM BOSTON AND BEYOND

NIKOLAUS S. LANG

MICHAEL RMANN

JEFFREY CHUA

XANTHI DOUBARA

In collaboration with the World Economic Forum

October 2017 | The Boston Consulting Group

CONTENTS

3 INTRODUCTION

4 MOBILITY IN 21ST-CENTURY BOSTON

Growing Needs, Growing Constraints
A Groundbreaking Transportation Planning Effort
Unlocking the Potential for Substantial Traffic Relief: Two
Scenarios
Consequences and Critical Choices

1 1 STRATEGIC CONSIDERATIONS FOR ALL CITIES:

PRELIMINARY LESSONS FROM THE BOSTON INITIATIVE
Autonomous Transportation Comes in Many Forms
In Evaluating Options, Consider Context and Needs
Asset Ownership Isnt Necessary
Cities Benefit from Having a Digital Mobility Platform
Take Ownership of Mobility Ecosystem Management

1 5 IMPLEMENTATION AND TESTING: INITIAL

RECOMMENDATIONS
Adopt an Agile Development Approach
Coordinate with City and State (or Provincial) Public-Sector
Leaders
Work with Multiple Private-Sector Partners to Foster Innovation
Socialize Innovative Ideas Early

1 9 APPENDIX: SIMULATION METHODOLOGY

2 0 FOR FURTHER READING

2 1 NOTE TO THE READER

2 | Making Autonomous Vehicles a Reality

 INTRODUCTION

M obility is the lifeblood of every city. As cities everywhere

grow, and as more megacities emerge, leaders face a growing
challenge: providing an adequate transportation infrastructure and
offering mobility choices that serve the publics needs and support
economic vitality.

With the advent of new vehicle technologies and business models

comes an array of new possibilities. Autonomous vehicles (AVs), ride
hailing (services provided by companies like Uber and Lyft), ride shar-
ing (such as UberPool and Lyft Line), shared vehicle ownership, elec-
tric vehicles, and other recent developments do more than promise
solutions to overburdened public-transit systems and congested roads;
they also hold out the prospect of improved safety, more efficient
transportation spending, cleaner air, and greater productivity. Togeth-
er, these developments will reshape the urban landscape and help de-
fine the future of transportation.

The Boston Consulting Group and the World Economic Forum have
been collaborating for the past several years on an initiative dedicat-
ed to shaping the future of urban mobility with AVs. The initial stage
of the project involved extensive research with consumers, urban offi-
cials, and policymakers worldwide. The subsequent (and current)
stage emphasizes an in-depth collaboration with a large city to test
and develop a strategy for autonomous vehicles. In the summer of
2016, the projects working group selected Boston as its partner city
for AV deployment. Boston was the top candidate because of its
strong technology cluster and openness to innovation, as well as its
transportation profile: a healthy mix of car-centric American and
public-transit-centric European archetypes. In addition, the citys
harsh winter weather and irregular physical layout would help test
the limits of AV technology. And last, though certainly not least, Bos-
tons long-term transportation vision, part of its Go Boston 2030 initia-
tive, is particularly detailed and thoughtful.

This report, BCGs latest on autonomous vehicles, examines the case

for AVs as a cornerstone of the urban mobility revolution, as seen
through the experience of Boston. It describes transportation chal-
lenges, strategic considerations, scenario modeling and simulations,
and field testing. We hope that leaders in the public and private sec-
tors who are considering new urban mobility models will benefit
from these reflections and recommendations on Bostons experience
thus far.

The Boston Consulting Group | 3

MOBILITY IN
21st-CENTURY BOSTON

T ransportation in Boston has seen

dramatic changes over the course of the
citys nearly 400-year history: from horse-
The citys vibrant economy has strained the
public-transit system to capacity. And the ex-
pansion of the tech, health care, and educa-
drawn wagons to streetcars, from the first tion sectors in the northern, southern, and
American subway to the first car-sharing western suburbs has created a need for con-
service. Today, in a city widely regarded as nections between neighborhoods and these
one of the most walkable in the United new economic hubs.
States, 14% of residents (a relatively high
proportion) choose walking as their primary Weatherespecially Bostons severe winter
mode of local transportation. But a huge conditionscompounds the pressure on the
influx of commutersprimarily drivers citys public-transit system and infrastructure.
causes the citys weekday population to swell Each year, on average, Boston copes with
to more than 1 million, almost double its about 43 inches (1.1 meters) of snow; in the
resident population. Traffic congestion chokes winter of 2014 to 2015, a record 110 inches
the citys roadways, creating delays during (2.8 meters) fell on the city. Of the ten most
peak hours and leading to what some experts populous US cities that experience cold win-
consider to be among the nations worst ters, only Denver, Minneapolis, and Milwau-
driving conditions. kee receive higher average amounts of snow-
fall (55 inches for the first two cities, and 47
inches for Milwaukee).
Growing Needs, Growing
Constraints
Boston is growing robustly in both population A Groundbreaking Transportation
and jobs. But opportunities in this healthy Planning Effort
economy are less available to the citys poor- In 2014, recognizing the need for a sustain-
er residents: public transit tends to offer bet- able and equitable future transportation sys-
ter service in more affluent neighborhoods, tem that will enhance residents economic
while underserving low-income neighbor- opportunities through improved mobility,
hoods such as Roxbury (median annual in- Boston launched Go Boston 2030. In devising
come, $32,000). Because residents of poorer this long-term transportation plan, the city
neighborhoods must walk farther to reach set a definitive and ambitious vision for its
the nearest subway line, they tend to rely transportation future: Zero deaths. Zero inju-
more heavily on other modes of transporta- ries. Zero disparities. Zero emissions. Zero
tion, such as private cars. stress.

4 | Making Autonomous Vehicles a Reality

During the Go Boston 2030 planning process, Increase walking by approximately 50%, to
residents expressed strong support for several 22% of the total.
objectives:
Boost cycling fourfold, to 8% of the total.
Access. Make Bostons neighborhoods
interconnected for all modes of travel, (Carpooling and home-based workers ac-
including cycling, walking, and car count for the remaining 6% of the total.)
sharing.
Although they are aspirational, these targets
Safety. Eliminate traffic fatalities in are measurable, and city leaders established
Boston, and significantly reduce collisions them in order to encourage an aggressive
in all modes of travel. course of action to drive change.

Reliability. Make travel on Bostons As part of Go Boston 2030, the city is pursu-
transit and roadway networks predictable ing several early-action projects designed to
under all conditions. quickly improve how people get around.
These include Vision Zero Boston, which aims
(For more on Boston residents views on the to eliminate traffic fatalities in the city
citys current transportation situation, see the through greater pedestrian and bicyclist safe-
sidebar Getting Around Town Today: Resi- ty, and a citywide rollout of 5,000 smart park-
dents Frustrations.) ing meters that provide real-time data to bet-
ter manage parking and curbside space.
Based on these themes, city leaders estab-
lished targets for the shift toward more sus- Bostons Autonomous Vehicle Initiative, a
tainable modes of transportation over the joint effort with BCG and the World Econom-
next 15 years: ic Forum, is one of the citys medium-term
transportation projects. Announced in Sep-
Reduce solo private-car use by half, to 20% tember 2016, the initiative involves the on-
of the total number of work commutes. street testing of autonomous electric vehicles.
Recognizing the many potential societal ben-
Increase public-transit use by one-third, to efits of AVs (whether private or shared-fleet),
44% of the total. city leaders designed the initiative to develop

GETTING AROUND TOWN TODAY

Residents Frustrations

We conducted a series of focus groups to having all of their children in tow, on a

better understand Bostonians experience lengthy journey by public transit, in
with and perception of public transporta- order to bring just one child to a
tion, particularly their frustrations. Four doctors appointment.
important findings emerged:
Residents had mixed feelings about
Families feel that they lack adequate existing public-transit options. Many are
alternatives to using a private car. Yet unhappy with the perceived unreliability
using ones personal car in downtown of the system, which in large part stems
Boston is hardly desirable because of from poor communication regarding
traffic congestion and the high cost of service disruptions.
parking.
For many, ride-hailing services such as
People who cannot afford to own or Uber and Lyft today fill a gap between
drive their own car often spend hours public transport and privately owned
on public transit. For some, this means vehicles.

The Boston Consulting Group | 5

 a strategy to get them on the road. (See the officials from the City of Boston, and MIT
sidebar The Social Benefits of Autonomous Media Lab developed an agent-based traffic
Vehicles.) Within three months, the city had simulation model. Our model looked at a
moved to establish a strategy, governance 0.45-square-kilometer area in Bostons down-
structures, and programs for testing and im- town corea historic and bustling district
plementing the new technologies and busi- near City Hall. We modeled current city traf-
ness models. fic flows over a typical 24-hour period using
real-life geographical and trip data for the
area, including trip origin and destination
Unlocking the Potential for pairs. (See Exhibit 1.) Simulated vehicle be-
Substantial Traffic Relief: havior included such realistic elements as
Two Scenarios stops at traffic lights, left turns, typical vehi-
Among the many benefits that AVs promise, cle-following distances, and even instances of
the most tangible may be reduced congestion bad driving of the sort that cause random
and improved traffic flows. To quantify these street blockages. (See the Appendix for more
benefits, BCG, the World Economic Forum, about our model and assumptions.)

THE SOCIAL BENEFITS OF AUTONOMOUS VEHICLES

Autonomous cars (particularly electrically risk of crashes. According to a fleet-
powered ones), in tandem with sharing based model of a city with 5 million
models, promise enormous benefits to residents, the number of crashes could
urban communities and to society in decline by as much as 87% over a
general. (See the exhibit.) These benefits ten-year period.
include the following:
Lower Emissions. Because of smooth-
Greater Safety. Many crashes and er driving (thanks to steadier speeds
fatalities today occur because of human and more-gradual braking, for example),
error. AVs can dramatically reduce the AVs are likely to be more fuel efficient

Autonomous Modes of Transport Can Help Cities Achieve Their Goals

Improve road safety, reducing Enable more efficient public
accidents by up to 87%1 transportation spending

Decrease pollution and Improve the overall

tailpipe emissions by up reliability of the
to 66%2 transportation system

Make available up to
48% of parking space
for other uses (thanks Boost productivity
to shared autonomous
fleets)2

Increase traffic efficiency, Make transportation

with 30% shorter commute more affordable
times and less congestion2
Ensure that everyone
has equal access to
transportation
Sources: World Economic Forum; City of Boston; BCG analysis.
1
Based on modeling of a hypothetical city with 5 million inhabitants over a ten-year period.
2
Based on a 24-hour traffic simulation of Bostons downtown core.

6 | Making Autonomous Vehicles a Reality

We then created two scenarios based on a Autonomous shuttle buses
vehicle mix in which shared AVs replaced a
substantial percentage of the traditional Our base case assumes that 56% of the trips
private vehicles (and, to some extent, public- starting, ending, or occurring entirely within
transit trips) included in the current traffic the 0.45-square-kilometer study area involve
flow model. (See Exhibit 2.) Our two public transit, 33% involve a traditional per-
scenarios involved four new types of mobility sonal vehicle, and 11% involve taxi or ride-hail-
enabled by AV technology: ing services. To simplify the scenarios, we ex-
cluded walking and cycling from our modal
Privately owned autonomous vehicles mix. Scenario A, the evolutionary scenario, as-
sumed a substantial shift from traditional to
Autonomous taxis autonomous privately owned cars and a
steady increase in the use of shared modes of
Autonomous taxis with ride-sharing mobility. Specifically, it assumed that 11% of
passengers (passengers who share a ride trips would be by traditional private car, an-
but do not know one another) other 11% by privately owned AV, 50% by pub-

than human-driven vehicles. Urban More Reliable, Less Stressful

fleet AVs are likely to run on electricity, Transportation. The efficiency and
rather than on gasoline or diesel fuel, convenience of autonomous technology
further reducing tailpipe emissions.* improve travel for city dwellers. By
reducing congestion, AVs can make
More Available Public Space. AVs transit times more predictable.
significantly reduce the need for nearby
parking spaces (or any parking spaces, Cost Efficiency. Shared AV-based
in the case of shared vehicles). This transportation will likely be consider-
frees up urban land for other public ably cheaper than car ownership is
uses, such as parks or recreational todayand potentially competitive with
facilities. the cost of mass transit. One factor in
this cost efficiency is the reduction in
Reduced Congestion. Increased labor costs. Another element is the
throughput and smoother traffic flows economic effect of ride sharing: splitting
(as a result of more efficient driving and the fare among multiple passengers.
fewer crashes) will help reduce Ride sharing in a robo-taxi that carries
congestion. As ride sharing increases at least four people would be roughly
and fewer cars fill the streets, the half as expensive as driving ones own
reduction may be even greater. On the vehicle.
other hand, a rise in demand for AV
mobility (due to the availability of a Greater Productivity. Because they
more convenient, more affordable encounter fewer traffic bottlenecks,
transportation option) and an commuters spend less time traveling
associated rise in miles traveled could and can use that travel time more
partially offset these benefits. productively. If they choose to, AV
passengers can read or work during the
Greater Access for Nondrivers. AVs trip, thus boosting their productivity.
increase the mobility of people who are
unable or unwilling to drive, such as the
disabled and the elderly. Although most * This assessment does not take into account the
cities today offer paratransit services, impact of upstream emissions related to increased
these tend to be costly to maintain. demand on the electrical grid.

The Boston Consulting Group | 7

 Exhibit 1 | A Simulation of Downtown Boston Traffic Today
DOWNTOWN STUDY AREA = 0.45 SQUARE KM ELEMENTS OF TRAFFIC FLOWS

North End
12.6 km of streets
22.8 km of sidewalks Cars Taxis
Types of
12 bus routes vehicles
53 traffic lights Haymarket
Buses Shuttle buses

City Hall Faneuil

Plaza Hall Environment
and
Custom infrastructure
Old State House Traffic lights Streets
House
Financial
District
Boston Post Office Following distance
Common Square Dynamic
behaviors
Downtown DOWNTOWN
STUDY AREA Speed
Crossing
BOSTON
Traffic rules Passenger
capacity

Sources: World Economic Forum; BCG analysis.

Note: The simulation used geospatially accurate data.

Exhibit 2 | Two Change Scenarios: Evolutionary Versus Revolutionary

SCENARIO A: Gradual shi from private to SCENARIO B: Disruptive shi from private
BOSTON TODAY1 shared and from human-driven to AV and human-driven to shared and AV

Primary % of Primary % of Primary % of

transport mode trips transport mode trips2 transport mode trips

Public transit 56 Public transit 50 Public transit 34

Traditional personal vehicle 33 Shared autonomous taxi 22 Autonomous shuttle bus 28
Traditional taxi and ride hailing 11 Autonomous personal vehicle 11 Autonomous taxi 24
Traditional personal vehicle 11 Shared autonomous taxi 14
Traditional taxi and ride hailing 6

Public transit Traditional taxi and ride hailing

Traditional personal vehicle Autonomous personal vehicle

Autonomous taxi Autonomous shuttle bus

(shared or single passenger)

Sources: World Economic Forum; BCG analysis.

1
This mix of transportation modes is representative of the study area only. Most trips into and out of the study area are work commutes. The
model assumes a simplified modal mix without walking and cycling.

8 | Making Autonomous Vehicles a Reality

lic transit, and 22% by ride-shared AV taxi. Tra- We also evaluated two ancillary effects close-
ditional taxis and ride-hailing account for the ly linked to improved traffic flows and the
remaining 6% of trips in this scenario. Scenario more varied mix of vehicles:
B postulated a revolutionary change from pri-
vately owned vehicles to the on-demand use A Drop in Emissions. In the evolutionary
of electric AV fleets. This scenario assumed scenario, tailpipe emissions fell by 42%; in
that 34% of trips would be by public transit, the revolutionary scenario, they fell by
24% by single-passenger AV taxi, 14% by ride- 66%. For both scenarios, we assumed that
shared AV taxi, and 28% by AV shuttle bus. most autonomous vehiclesroughly half
of privately owned AVs, two-thirds of
In terms of traffic flow, both simulations autonomous taxis, and all autonomous
yielded less congestion and shorter travel shuttle buseswould be electric and thus
times. (See Exhibit 3.) In the evolutionary sce- free of tailpipe emissions.
nario, the number of vehicles in the study
area fell by 11% (largely as a result of more Recovered Street Space. The presence of
car sharing and ride sharing). Travel time fewer private cars in the study area
dropped by an average of 11%. In the revolu- reduced the need for parking spaces. The
tionary scenario, the number of vehicles in evolutionary scenario showed 16% more
the area fell by 28%, and average travel time free space in the area, while the revolu-
declined by 30%. tionary scenario produced almost 50%

Exhibit 3 | Both Change Scenarios Showed Less Congestion, Lower Emissions, and More Street
Space
SCENARIO A: SCENARIO B:
Gradual shi from private to Disruptive shi from private
shared and from human-driven to AV and human-driven to shared and AV

Predicted change (%) Predicted change (%)

Number of vehicles on the road 11 28

Vehicle distance traveled +13 +6

IMPACT Average travel time 11 30

CO2 emissions 42 66

Parking space needed 16 48

Sources: World Economic Forum; BCG analysis in cooperation with MIT Media Lab.

The Boston Consulting Group | 9

 more space. Our assumption underlying ban sprawl if commuters conclude that they
this reduction is that shared vehicles can live farther out of town because commut-
require a fraction of the current number ing to work has become faster, less stressful,
of parking spots for passenger pickup and and more comfortable. All of these possibili-
drop-off and for vehicle charging, because ties underscore the need for public-sector
they either return to their point of origin managers and leaders at the city, county, and
or go to a parking space that is farther state levels to participate in formulating a
from the core (and thus less expensive transportation strategy that includes autono-
than downtown parking). mous transportation modes, yields the great-
est benefit to the largest number of stake-
In summary, the results of the simulations holders, and avoids undesirable outcomes.
support the argument that in dense urban
environments, the transition to shared, City planners and policymakers need to an-
AV-enabled modes of transportation could re- swer a number of crucial questions:
lieve congestionowing to fewer vehicles on
the streets and smoother, more organized What policies and incentives should we
traffic flows that involve less stop-and-go put in place to ensure that our new
driving and fewer of the other interruptions mobility models contribute to our overall
typical of human driving. Our modeling exer- transportation goals?
cise also demonstrates the importance of ac-
tive planning, policymaking, and manage- How can we overcome existing concerns
ment in advancing transportation outcomes about safety, liability, and ethics in order
that meet the publics diverse needs and min- to advance the publics acceptance of AVs?
imize unintended consequences.
What is the optimal mix of public-transit
and new mobility models, and how do we
Consequences and Critical achieve it? How can we use pricing and
Choices taxation to influence this balance?
AVs provide effective transportation options
that serve people better. Their benefits in- What is the most effective way to encour-
clude facilitated mobility for significant seg- age ride sharing, a transportation option
ments of the populationin particular, the that is critical to realizing the long-term
elderly and people with physical disabilities. societal benefits of AVs?

At the same time, AVs risk becoming victims How do we discourage inflating demand
of their own success, increasing the demand for zero- and single-occupancy road-based
for transportation by making mobility cheap- transportation? What restrictive laws and
er and more convenient. When people use penalties can we implement to minimize
AVs more often and in an ad hoc manner these unwanted outcomes?
to run simple errands, such as picking up the
dry-cleaning, for examplethe result could Where should we test the new mobility
be more, not less, traffic congestion. Greater models? Where should we first roll them
congestion could also result from a rise in cer- out?
tain types of zero-occupancy trips, such as
when empty AVs cruise the streets to save on Should we establish dedicated AV zones
the costs of parking. Another potentially un- or lanes and similar incentives for use?
desirable outcome relates to the impact of
AVs on the transportation labor market: AV Bostons AV initiative seeks to address these
fleets might put taxi drivers and other trans- and other pressing questions. Strategic
portation workers out of work. (In their discussions initiated by city leaders, BCG, and
AV-related discussions and actions, Bostons the World Economic Forum point to some
leaders have recognized the importance of answers.
job retraining and job creation for those
workers.) Finally, AVs could contribute to ur-

10 | Making Autonomous Vehicles a Reality

 STRATEGIC
CONSIDERATIONS FOR
ALL CITIES
PRELIMINARY LESSONS FROM THE BOSTON INITIATIVE

I n its early stages, Bostons Autonomous

Vehicle Initiative has already yielded five
important lessons for policymakers, planners,
in terms of reducing congestion or
providing better, more affordable
transportation.
and other private- and public-sector stake-
holders involved in shaping the future of Autonomous Taxis. Autonomous taxis
mobility in their city. can serve either a single passenger or
multiple passengers (strangers who share
the ride, similar to UberPool today). These
Autonomous Transportation vehicles transport passengers from a
Comes in Many Forms designated pickup point to a designated
Every city will need to perform its own test- destination. NuTonomyan MIT spinoff
ing to identify the form (or forms) of AV technology company and a partner in the
transportation best suited to its specific cir- Boston pilot programhas launched a
cumstances and transportation challenges prototype autonomous taxi. The company
and goals. For Boston, any new AV mobility launched the worlds first test program
model must be fleet-based, electrically pow- involving autonomous taxis in Singapore
ered, and designed to facilitate shared trips. in August 2016. It is now developing a
The spectrum of possible models that cities complete solution for point-to-point
can adopt is even broader: mobility via large fleets of AVs, using a
package that consists of software pro-
Autonomous Private Vehicles. The grams for navigating urban environments,
prevailing view among consumers is that routing and managing vehicle fleets, and
most privately owned, privately driven operating vehicles by remote control.
autonomous cars will be electrically NuTonomy previously tested the software
powered (or at least hybrids). Electric and in the UK and is now testing it in Boston
hybrid power trains will certainly help and Singapore.
reduce tailpipe emissions (and thus help
mitigate climate change), but the precise Autonomous Shuttle Buses. More and
well-to-wheel impact will depend on more vehicle manufacturers are looking at
developments in electricity generation. electrically powered, autonomous shuttle
Private AVs could also contribute to safer buses as a crucial building block of future
roads. Without a shift to shared vehicle urban mobility. Several manufacturers,
usage, however, they are likely to have including France-based Navya and US-
only a limited impact on urban mobility based Local Motors, are building and

The Boston Consulting Group | 11

 deploying such buses today on predefined real-world experience demonstrates. In both
routes or in geofenced areas (geographical New York and San Francisco, for example,
zones defined by a perimeter within which one-third of Lyfts trips today involve ride
a suitably equipped vehicle can track its sharing through its Lyft Line service.
route and its proximity to other specified
locations via GPS or Wi-Fi). Navyas 15-seat
Arma, which the company introduced in In Evaluating Options, Consider
October 2015, is already in use on public Context and Needs
streets in Bordeaux and Lyon (France), Any evaluation of a new mode of transporta-
Sion (Switzerland), Doha (Qatar), and tion must take into account the citys particu-
Perth (Australia). Launched in the summer lar context and needs. The case for new
of 2016 and built with direct digital shared-mobility transportation options on
manufacturing and 3-D printing, Local routes and between neighborhoods that cur-
Motorss eight-passenger Olli features rently lack public transit is clear. But for areas
IBMs Watson artificial intelligence system. that public transit does serve, planners and
Arma has a maximum speed of 40 kilome- policymakers must consider how new mobili-
ters per hour, and Olli a maximum of 45 ty models can complement existing infra-
kilometers per hour. Eventually, autono- structure to provide better first- and last-mile
mous shuttle buses may be able to operate connections to and from major rail lines.
independently of predefined routes, much
as UberPool and Lyft Line do today, As it does in many cities around the world,
calculating nearby pickup and drop-off mass transit serves as the backbone of Bos-
points for passengers based on optimized tons transportation system. Although some
routing. This capability would enable them of the citys recent job growth has taken place
to serve as a convenient middle option outside the downtown area, most of its tran-
between a private ride-hailing service and sit options remain concentrated there. As a
public transportation. result, to reach an outlying workplace, pas-
sengers from neighborhoods outside the city
center have to get downtown, transfer, and
Cities neednt own or even op- then travel back out to their destination.
Transit planners could eliminate this ineffi-
erate mobility assets; enabling cient, time-consuming situation by creating
direct AV routes from residential neighbor-
their deployment is enough. hoods to the districts in which new jobs are
locatedwithout committing to a major in-
vestment in rail infrastructure.
To improve efficiencies in the transportation
network and in the services they provide to
residents, cities will likely encourage a combi- Asset Ownership Isnt Necessary
nation of these new transportation modes. Cities do not have to own or even operate the
For example, shuttle buses could complement new mobility assets; they need only enable
public transit by taking residents of sparsely deployment. This is the situation in Boston
populated areas to the nearest commuter rail and, probably, in most other cities that must
or subway station (thus bridging the last mile). grapple with competing budgetary demands.
And autonomous taxis could serve elderly and Establishing the right policies and regulatory
mobility-impaired passengers end to end with- environment in close cooperation with indus-
in the city. Underlying many of these models try leaders, technology developers, and gov-
is the assumption that residents will not mind ernment officials at the local, regional, and
sharing rides, even in the absence of a human state levels is one key step. Approving the
driver, with passengers whom they do not technologies and testing the models on the
know. In our research, we have seen some de- citys streets is another.
gree of reluctance about sharing rides, partic-
ularly in Western countries. But pricing ad- In surveys that we conducted among 25 city
vantages can change that equation, as policymakers worldwide in 2015, roughly 90%

12 | Making Autonomous Vehicles a Reality

of respondents said that they would rather the importance of having an integrated mo-
have multiple private-sector entities offering bility platform to help a city manage traffic
new, autonomous mobility services than rely volume and flows while at the same time of-
on the city or on a single private provider. fering consumers a single easy-to-use point of
(See Self-Driving Vehicles, Robo-Taxis, and the access to the citys transportation network.
Urban Mobility Revolution, BCG report, July Boston envisions just such a platform, which
2016.) Any third-party mobility offering, how- consumers will be able to use to plan and
ever, would need to conform to the citys criti- book trips, accessing it through a device such
cal planning goalswhich in Bostons case as a smartphone and receiving real-time in-
are to make transportation safer, more acces- formation about delays and transportation
sible, and more reliable. alternatives. The system will manage pay-
ments centrally. (See Exhibit 4.)
The city of Gothenburg, Sweden, offers a
positive example of third-party involvement. Meanwhile, the city will gather data on cur-
Officials there gave Volvo the green light to rent usage of all transportation modes and
recruit 100 residents for public-road AV use that information to steer traffic dynami-
testing on a prescribed route, recognizing that cally (based on real-time traffic conditions),
such testing would yield valuable data for plan, and maintain the street network more
both Volvo and the city. (Volvo plans to effectively. Such a system does have challeng-
launch similar pilot programs in London and es, including the issue of integrating vehicu-
in China.) lar, pedestrian, and public-transit traffic that
flows in from surrounding communities. De-
signing, building, and operating a system that
Cities Benefit from Having a both city residents and commuters from out-
Digital Mobility Platform side the city can use will require substantial
A digital mobility platform that aggregates all intraregional cooperation, coordination, and
transportation modes should be at the heart co-investment, too. Third-party providers will
of the new urban mobility ecosystem. In the likely play a significant role in formulating an
2016 BCG report cited above, we discussed effective plan.

Exhibit 4 | How Cities Envision an Integrated Citywide Mobility Platform

CITY
GOVERNMENT Collects revenues through mobility
platform; passes them on
Operates mobility platform including
all transportation modes

Mobility platform
OEM/Industry

Leases/sells
autonomous vehicles Autonomous Other transport
transport operator modes

Provides on-demand mobility service as

Buys a monthly pass or opts part of citys overall mobility offering Integrate with autonomous modes,
for a pay-per-use option offered on citys mobility platform

Consumer

Uses various mobility

services separately
Sources: World Economic Forum; BCG analysis.

The Boston Consulting Group | 13

 In June 2017, the Finnish company MaaS Economic Forum and BCG; an executive
Global (MaaS stands for mobility as a service) order from Mayor Martin Walsh establishing
began testing Whim, a subscription-based AVs as a priority and naming Gina Fiandaca,
app, in Helsinki. The app enables users to the commissioner of Bostons Department of
plan trips incorporating transportation op- Transportation, to lead the citys AV effort;
tions from different providerslocal public and a memorandum of understanding with
transit, rental cars, city bikes, taxis, long- NuTonomy and the Massachusetts Depart-
distance trains, and more. Users can buy ment of Transportation (MassDOT) that
monthly packages or pay as they go. Field confirmed their joint commitment to begin
testing of Whim will begin in the West Mid- on-street testing and defined the scope of the
lands in the UK next. tests.

Singapore offers another example. In 2014,

Take Ownership of Mobility the countrys Ministry of Transport formed
Ecosystem Management the Committee on Autonomous Road Trans-
Cities must take ownership today of manag- port for Singapore (CARTS), a public-sector/
ing their future mobility ecosystem. From the private-sector task force charged with guiding
outset, cities should establish a governance the development of AV use. CARTS working
structure and testing policies and parameters groups are exploring an array of issues, from
that will foster the kinds of innovative solu- new technologies to business models and
tions they need to solve their most pressing suitable regulation.
transportation challenges. Cities can make
considerable progress toward achieving such
solutions by working cooperatively with state
or national agencies.

In 2016, Boston quickly adopted several

measures to drive AV development forward:
the launch of its initiative with the World

14 | Making Autonomous Vehicles a Reality

 IMPLEMENTATION
AND TESTING
INITIAL RECOMMENDATIONS

B ostons approach to testing has been

an important element of its AV initiative
thus far. The projects initial takeaways and
Coordinate with City and State (or
Provincial) Public-Sector Leaders
In Boston, close cooperation between and co-
recommendations provide food for thought for ordination with all city and state stakeholders
other cities and public-sector entities. (See the has been the key to progress thus far. In-
sidebar Testing Takes Off Around the World.) volved parties include, among others, Chris
Osgood, the mayors Chief of the Streets,
Transportation, and Sanitation (a cabinet-lev-
Adopt an Agile Development el post overseeing public works and transpor-
Approach tation); the Mayors Office of New Urban Me-
Bostons leaders moved with impressive chanics, which is the citys civic innovation
speed from exploring the idea of AVs to con- team, led by Kris Carter and Nigel Jacob; the
ducting the first on-street tests. (See Exhibit Boston Department of Transportation; the
5.) They were able to do so because the city Massachusetts Bay Transit Authority; Mass-
quickly put enabling measures in place: after DOT; and the Massachusetts Port Authority.
issuing executive orders, it forged a partner- The MassDOT Automated Vehicles Working
ship with a pioneering technology provider Group is focusing on proposing statutory and
(NuTonomy), built a website to communicate regulatory changes that will facilitate the
its plans, and simultaneously developed the widespread deployment of AVs in the state
testing plan and the memorandum of under- while also ensuring public safety. Similar
standing with NuTonomy and MassDOT. Mas- work is essential for any city that is consider-
sachusetts acted swiftly, too, authorizing test- ing wide deployment of AVs in its streets. At
ing on the states roads and creating an the same time, lessons from Bostons experi-
Automated Vehicles Working Group under ence with NuTonomy feed back into the
the leadership of Secretary of Transportation working group to inform policy decisions at
Stephanie Pollack to support AV innovation the state level.
in Massachusetts. The first tests started
promptly with a narrow, well-defined scope;
over time, the testing conditions and area will Work with Multiple Private-Sector
gradually expand. Throughout the testing pe- Leaders to Foster Innovation
riod, Boston plans to use earlier lessons to in- Through the on-street trials, Boston is testing
form the next steps, even if successive itera- different technologies, experimenting with
tions of the testing regimen contain substan- different business models, and gaining an un-
tial changes or adaptations. derstanding of the infrastructure require-

The Boston Consulting Group | 15

 TESTING TAKES OFF AROUND THE WORLD
A number of cities worldwide are testing build infrastructure for developing and
AVs, often as part of broader urban mobility testing autonomous driving technology.
programs. Boston, with its AV initiative, and As part of Londons GATEway Project,
Gothenburg, with Volvos Drive Me pilot researchers in April 2017 tested an
program, are two examples. Other cities autonomous Oxbotica-made shuttle
with active AV research projects include the prototype on a 2-mile (3.2-kilometer)
following: route near the O2 arena in Greenwich.

Singapore. Since 2015, Singapore has Wuzhen. In November 2016, Baidu, the
been running AV bus and taxi trials in internet giant, began field-testing
its One-North business zone. Partici- autonomous cars manufactured by
pants include NuTonomy, A*STARs Chinese automakers BYD, Chery, and
Institute for Infocomm Research, the BAIC Motor in a public trial in the tourist
Singapore-MIT Alliance for Research city of Wuzhen. In April 2017, the
and Technology, and Delphi Automotive. company launched its Apollo Project to
In June 2017, Singapore announced that open its vehicle, hardware, and software
it would expand the program, adding 55 platforms and cloud data services to car
kilometers of test route to penetrate manufacturers and others in the industry.
neighboring areas that include mixed-
use residential developments. Suzu. In February 2015, this Japanese
city of roughly 15,000 people, 44% of
Helsinki. Following trials in the them elderly, began public road trials in
summer of 2016, the city plans to offer a joint AV transportation project with
regular, scheduled autonomous shuttle Kanazawa University. The main test
bus service in the fall of 2017 with route of 6.6 kilometers ran from the city
EasyMile EZ-10 vehicles, which to the mountains; a second test route
transport up to 12 passengers. Other was 60 kilometers, the longest in Japan.
Finnish cities are conducting their own In 2017, the city will have conducted
self-driving trials. two social trials, including a public
demonstration at the Oku-Noto Trien-
London. In March 2017, the UK govern- nale festival in September. Plans call for
ment announced plans for the first a regional launch in 2020.
phase of its 100 million investment to

ments for AVs. The resulting findings will give interested parties a clear view of its se-
help leaders develop the combination of tech- lection process.
nology, business models, regulation, and in-
frastructure that best fulfill the citys particu-
lar needs. Working with multiple industry Socialize Innovative Ideas Early
partners is at the core of this strategy. The Informing and educating the public about au-
city kicked off its testing with NuTonomy. tonomous vehicles is as important as validat-
(See the sidebar An AV Progress Report.) As ing the technology itself. Leaders recognize
of 2017, however, it is also working with sev- that many people have reservations about
eral other mobility providersincluding Op- AVs, and they understand the need to publi-
timus Ride (like NuTonomy, a startup that cize AV transportation in order to encourage
emerged from MIT) and Delphi Automo- its adoption by residents. Offering residents
tiveto test their products on Bostons AV 101 sessions or free rides can help famil-
streets. To underscore its desire to be fair and iarize them with AVs and generate interest
transparent, the city posted a draft memoran- and excitement. Boston took measures early
dum of understanding on its AV website to on to publicly float the idea of autonomous

16 | Making Autonomous Vehicles a Reality

 Exhibit 5 | AV Testing in Boston Has Proceeded Quickly

SEPTEMBER 2016 OCTOBER 2016

Boston mayor announces Massachusetts governor
AV initiative with World issues executive order
Economic Forum and BCG to promote the testing
and deployment of AVs

NOVEMBER 2016 DECEMBER 2016

Boston, MassDOT, MassDOT and City of

and NuTonomy sign Boston give NuTonomy
memorandum of understanding approval to test in Raymond
to test AVs in Seaport District L. Flynn Marine Park
(Seaport District)

JANUARY 2017
DECEMBER 2016
NuTonomy launches first on-
MILESTONES street testing on January 4 NuTonomy completes
Q3 2016Q2 2017 (100 miles in Raymond L. Flynn phase A
Marine Park; daytime, (off-road testing)
good weather)

MARCH 2017 APRIL 2017

NuTonomy completes NuTonomy receives approval
phase B2 for phase C and launches
(200 miles in Raymond L. Flynn phase C1
Marine Park; different times (200 miles in Seaport
of day, mixed weather) District; daytime, good weather)

JUNE 2017 JUNE 2017

NuTonomy and Ly announce Optimus Ride and Delphi
collaboration to optimize AV are announced as new
user experience through user testing partners; Optimus Ride
experience/interface begins testing in Raymond L.
development Flynn Marine Park

NuTonomy NuTonomy
completes phases launches and
PLANS GOING NuTonomy
C1 and C2 completes phase D launches AV testing
FORWARD (Seaport District (400 miles in Boston; with passengers
testing; different times different times of day,
of day, mixed weather) mixed weather)

Sources: City of Boston; NuTonomy; BCG analysis.

transportation. During the Go Boston 2030 Tonomy. Promotional events, such as a block
planning process, city representatives en- party showcasing robotics (with an AV pet-
gaged through surveys, forums, and discussion ting zoo) set for October 2017, aim to pro-
groups with more than 5,000 residents. Press mote public enthusiasm for AV transporta-
announcements and interviews with city offi- tion. Similarly, MassDOT is acting with
cials have helped promote the AV effort. The transparency by opening its Automated Vehi-
city also created a website dedicated to auton- cles Working Group sessions to the public.
omous vehicles, and the citys AV initiative is The ongoing vehicle tests are currently limit-
a central part of its effort to earn residents ed to NuTonomy employees, but researchers
acceptance and support for its broader mobil- may open them to passengers outside the
ity program. The website outlines the citys company in the futurea further step in so-
vision, the benefits it expects AVs to deliver, cializing the new technology, and one that
and the rationale for its partnership with Nu- will generate direct consumer feedback.

The Boston Consulting Group | 17

 AN AV PROGRESS REPORT
In November 2016, the City of Boston, the overcome before AVs can operate commer-
Massachusetts Department of Transporta- cially as an on-demand service. Among the
tion, and NuTonomy signed a memoran- softwares tasks are to learn how to
dum of understanding authorizing the recognize Bostons articulated Silver Line
Cambridge-based AV software maker to buses; maneuver around heavy equipment
conduct tests on Bostons public roads. The at construction sites and industrial opera-
Boston program represents the companys tions; navigate a tricky intersection where
first testing ground in the US, after it vehicles routinely block the box; share the
launched its autonomous taxis in Singa- road with vehicles traveling much faster
pore in 2016. than the 25-mile-per-hour speed limit; and
learn how to correctly identify seagulls, a
City leaders worked with NuTonomy to common presence on Bostons waterfront
develop a testing plan, which was imple- and an obstacle the AV had not encoun-
mented in January 2017. The initial on-road tered in its Singapore trials (gulls were
test phase called for 100 miles of driving on difficult for the AVs cameras to identify
public roads within the Raymond L. Flynn because they look different when viewed
Marine Park at the Boston Seaport during singly than when viewed in a flock).
daylight hours in good weather, followed by
100 miles of driving (in the same park) at The next phase, which launched in April
night and in inclement weather. Through- 2017, expanded the testing area to the
out the tests, a safety driver was in the entire Seaport District. One of the most
vehicle to monitor it and to assume important new challenges of this phase is
manual control whenever he or she felt the task of navigating the area around
uncomfortable or thought that other South Station, one of the two busiest
vehicles might behave unpredictably. commuter train stations in Boston. In
addition, NuTonomy announced a partner-
This test phase, completed in March, ship with ride-hailing provider Lyft to jointly
enabled researchers to identify a set of test autonomous rides in the city.
technical challenges that the software must

L ike the transportation programs in Singa-

pore, Gothenburg, Helsinki, and other
leading municipalities, Bostons effort
ies have long believed and some have since
partly confirmed: the potential benefits of
AVs in urban transportation systems are enor-
demonstrates how a city can work carefully, mous and wide-reaching, but achieving them
deliberately, and above all safely to prove the requires the right mix of ambition, planning,
viability and potential of AVs and AV-enabled regulation, testing, and careful execution in a
business models. Its progress so far confirms setting that involves multiple stakeholders.
what many experts involved with AVs and cit-

18 | Making Autonomous Vehicles a Reality

 APPENDIX
SIMULATION METHODOLOGY

To understand the impact that autonomous area by people who live and work in the city.
vehicles and ride sharing can have on traffic The data translated into 89,000 private vehi-
congestion and travel times, we simulated the cles traveling 80,000 kilometers and spending
real-world traffic conditions in a 0.45-square- an average of 4.5 minutes traveling on roads
kilometer portion of Bostons historic within the study area. (During congested
downtown, one of the citys busiest districts. peak travel times, average travel time in the
We built an accurate representation of the study area rose to as much as 9 minutes.)
area, including the road network, traffic
signals, sidewalks, bus stops, and travel We input the data into the GAMA traffic
destinations. simulation platform, a spatially explicit
agent-based modeling tool. Agent-based
We used US Census Bureau and Massachu- models are detailed representations of real-
setts Department of Transportation data to world environments that treat the individual
model travel patterns in and around the city, componentssuch as cars, roads, and
including current modes of transportation, passengersas entities that interact
time of day, and trip origins and destinations. dynamically with each other. In our agent-
We modeled 180,000 road-based one-way based model, for example, cars drove down
trips into and out of the study area in a typi- roads, people rode in cars, and cars avoided
cal 24-hour weekday period. This figure rep- each other. Our simulations also took into
resents the number of trips taken by people account the normal following distances
commuting into and out of the study area between vehicles, as well as differences in
during the morning and evening commutes, vehicles passenger capacity. We assumed
leisure trips to and from the suburbs in the faster acceleration and braking responses for
course of the day, and trips within the study electric AVs.

The Boston Consulting Group | 19

FOR FURTHER READING

The Boston Consulting Group has Self-Driving Vehicles, Videos

published numerous reports and Robo-Taxis, and the Urban http://on.bcg.com/AutomotiveInsights
articles about the automotive Mobility Revolution
industry and the development of A report by The Boston Consulting Piloting Autonomous Vehicles
autonomous vehicles. Group, July 2016 to Drive the City of the Future
February 2017
Whats Ahead for Car Sharing?
The New Mobility and Its Impact Mobility Revolution in the City of
on Vehicle Sales Boston
A Focus report by The Boston February 2017
Consulting Group, February 2016

Revolution Versus Regulation:

The Make-or-Break Questions
About Autonomous Vehicles
A report by The Boston Consulting
Group, September 2015

Revolution in the Drivers

Seat: The Road to Autonomous
Vehicles
A report by The Boston Consulting
Group, April 2015

20 | Making Autonomous Vehicles a Reality

 NOTE TO THE READER

About the Authors Acknowledgments Finally, they thank Augustin

Nikolaus S. Lang is a senior The authors want to express their Wegscheider for research assis-
partner and managing director in deepest gratitude to officials of the tance, Oliver Bandte and his
the Munich office of The Boston City of Boston for their generous associates at BCG Gamma for their
Consulting Group and a core cooperation, in particular, Mayor traffic simulation work, Jan Koch for
member of the firms Industrial Martin J. Walsh; Commissioner writing assistance, and Katherine
Goods practice and the automotive Gina Fiandaca of the Department Andrews, Gary Callahan, Kim
topic area. He is the topic leader for of Transportation; Chris Osgood, Friedman, Abby Garland, Gina
mobility, connectivity, and Chief of the Streets, Transportation, Goldstein, Steven Gray, and Irene
autonomous driving and the and Sanitation; and Kris Carter and Perzylo for editing, design,
coleader of BCGs Center for Digital Nigel Jacob, co-chairs of the Mayors production, and distribution.
in Automotive (CDA). Office of New Urban Mechanics.
For Further Contact
Michael Rmann is a senior In addition, they thank Karl If you would like to discuss this
partner and managing director in Iagnemma and his team at report, please contact one of the
the firms Munich office. An expert NuTonomy for their kind authors.
on Industry 4.0, the connected car, cooperation in providing
autonomous driving, intermodal information about the testing Nikolaus S. Lang
mobility, and digital transformation, program. They also thank the Senior Partner and Managing Director
he is also a core member of the mobility team at the World BCG Munich
firms automotive topic area. He Economic Forum, in particular, John +49 89 23 17 40
leads DigitalBCG and the firms Moavenzadeh, who heads the [email protected]
technology sector in Europe. Mobility Industries and System
Initiative, and Andrey Berdichevskiy, Michael Rmann
Jeffrey Chua is a senior partner formerly the automotive lead and Senior Partner and Managing Director
and managing director in BCGs practice lead for Urban Mobility. BCG Munich
Singapore office and a global sector +49 89 23 17 40
leader for infrastructure and real The authors are also grateful to the [email protected]
estate in the Industrial Goods and companies, organizations, and
Public Sector practices. He is a government bodies that have been Jeffrey Chua
topic expert for transportation and involved in this initiative: Abertis Senior Partner and Managing Director
infrastructure in the private sector, Infraestructuras, Audi, BMW, BCG Singapore
and has expertise in large-capital- ChargePoint, City of Gothenburg, +65 6429 2500
expenditure program management Denso, Ericsson, General Motors, [email protected]
and infrastructure planning. Honda, Hyundai Motor Company,
Innogy, Jaguar Land Rover, Land Xanthi Doubara
Xanthi Doubara is a consultant in Transport Authority Singapore, Consultant
the firms New York office and a Liberty Mutual, Lindholmen BCG New York
core member of the Industrial Science ParkDrive Sweden, Lyft, +1 212 446 2800
Goods practice and the automotive Ministry of Transport Singapore, [email protected]
topic area. Until recently, she served Optimus Ride, Qualcomm, Renault-
as project manager for BCGs Nissan Alliance, Robert Bosch,
collaboration with the World Siemens, SOMPO Holdings, State
Economic Forum on autonomous Farm, Toyota Research Institute,
vehicles and urban mobility. Transdev, UPS, Volkswagen Group,
and Volvo Group.

The Boston Consulting Group | 21

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