The Wheel: From Mobility to Connectivity

The automotive experience is undergoing rapid change. Having essentially evolved into a local area network of computers on wheels, the automobile is now poised to become an Internet node. One kind of intelligent transportation system (ITS) – known as the Connected Vehicle – based on 4G networks will provide new levels of traveler services, convenient payment services, real-time safety features, low-cost infotainment, and new types of social computing applications. In aggregate these will serve to optimize mobility, reduce congestion, make driving safer, healthier and more enjoyable, and make payment for road use, parking and insurance fairer and more convenient.

Skymeter's contribution to the Connected Vehicle consists of private and anonymous payment services based on Financial-grade GPS (FGPS) applications. These services will permit drivers to pay only for the insurance they need by paying per mile or kilometer traveled, only for the parking they occupy by paying by the minute, and only for the roads they use by replacing fuel, registration and property taxes with time-distance-and-place fees, allowing lower rates for off-peak driving.

Paying only for what we use is not only fairer to the consumer of roads, parking and insurance, but has the powerful effect of putting more control over the cost of mobility into the hands of the driver. How often have you sat in congestion on a roadway burning more in fuel and fuel tax than you would have if the road were uncongested? How often have you returned to your parked car with money still on the meter – or worse, how often have you returned a few minutes late to be greeted by a $25 or $40 parking fine? How often have you taken transit, a shared ride, a sick day, or a week’s vacation but paid your automotive insurance anyway? Have you ever parked your Smart Car beside a Cadillac Escalade only to pay exactly the same parking fee?

Road authorities say they need more money while motorists say they pay too much in fuel taxes. Insurers want to raise rates but motorists say insurance costs too much. Parking fees continues to climb while drivers cruise to find cheap spots.  We say it is expensive to drive, but the problem is we pay the wrong way.  We pay for roads by the tank full, insurance by the year, and if you can rationalize all the ways you pay (and don’t pay) for parking you deserve the Nobel in micro-economics.

Connectivity will help alleviate this mobility problem in three ways. Strong connectivity is important for fixing how we pay for mobility, enabling fairer and more transparent ways to pay only for what we use. Connectivity enables the information we need to choose less congested routes and times, to find parking spots and without circling and hunting. Most importantly, connectivity enables the network effect of dozens of other applications related to safety, traveler services, and infotainment that provide motivation for the innovation and markets that will drive the costs of delivering payment services down to 2% or 3%  – a rate that closer to the collection of fuel taxes (1%) than to the current collection costs of insurance, tolls and parking fees (10%-70%).

What we are about to see is that the Connected Vehicle will provide a critical platform for correcting the key economic problem of wrong-payment for mobility – a problem that gives rise to increasing funding unsustainability and congestion.

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