Personal Transportation is being disrupted. That’s the fact. It’s either an opportunity or threat for your transportation business.

Let’s make a forecast for year 2020. Yes, I know, forecasting the future is challenging. Big changes in our life rarely are actually consisting one big change but rather series of smaller steps that suddenly surprise us. Typically we’re overestimating the changes happening in the near future and underestimating what will happen on a longer term. And so called black swans are (by definition) almost impossible to forecast.

Let’s start with data-driven approach. Statistics, that is.

Personal transportation is the second largest household budget item in the US. Thus, there is motivation to find alternatives offering the same convenience level but for less money. At the same time, the proportion of young adults with a driver’s license has fallen both in the US and other countries. It means that there is increasing demand for personal, affordable transportation services.

Taxi apps are becoming popular but it’s just the surface

Uber, Hailo and others are enjoying success in new kind of ways to order a taxi. You can be sure that you actually get a cab, you can see the vehicle approaching on the map on your smartphone and payment is done conveniently with the pre-registered credit card. The initial users consists mainly wealthy people and more importantly, wanna-be rich people. Drivers also earn more in this model so they naturally like it (for now).

Simple mathematics shows, however, that this model may not economically be feasible in the long term. Competition is getting tougher (pressure to lower the costs) and at the same time the drivers want to earn more (pressure to increase the fees). Self-driving cars are only a partial solution. It may take the expense of the driver out of the question, but it’s not enough. Congestion and  space on the road still remain, calling for other solutions.

So it’s safe to estimate that these companies are after something much, much bigger thing.

Incumbent transit operators suddenly face two disruptions simultaneously

New companies want to change the rules of the game, effectively wanting to change the regulation. For the end-users all this is visible in the form of easy-to-use mobile app enabling you to order a taxi. That’s the official appearance of the business. Customers will protest against any authority taking actions to take down these new players (as they offer so convenient service).

More money is spent on lobbying and other activities aiming to change the regulation. Incumbent players cannot invest the same amount of money to fight the lobbying. So it’s likely that the regulation will change.

At the same time, the self-driving car revolution (another disruption) has potential to make more and more taxi drivers unemployed. It’s not an overnight change but will happen.

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The incumbent players need to change the mode of operation

Fighting two disruptions (self-driving car and disappearing/decreasing regulation) is impossible at the same time is practically impossible. The rules of the game will change, and one needs to change oneself as well.

First, it’s important to understand the situation. Only then the right solution for the problem can be created. Some players have for example thought that Uber’s service is all about ordering a taxi with a mobile phone. So they created their own app to offer the same technical functionality, with no measurable visible success.

Second, a proper solution has to be created. As Marc Andreessen famously forecasted, software will change everything. Now it’s transportation segment’s turn to be disrupted. Acquiring software skills is suddenly a must. At the same time, some companies have spent millions in creating working solutions for this segment. So it’s likely that starting from scratch is bound to fail, especially if there is no “software culture” in the house already. The fundamental change is much bigger.

Third and maybe most importantly, these incumbent players need to change the corporate culture as well. They have to start thinking in a disrupting way themselves. That’s the major difference between corporations and startups. In a corporation you’re fired if you make a mistake. In a startup you’re required to make mistakes, learn, iterate and win. This inevitably means new people are needed to manage this change. No manager with corporate background can manage this so external people with entrepreneurial background are needed to cultivate the new model.

Self-driving vehicles combined with ridesharing just might be the future of urban personal transportation 

French engineers already pioneered this concept long time ago but now they are adding the “social graph” of Facebook to the equation and they may have a winning combination.

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http://gizmodo.com/is-this-ride-sharing-smart-minivan-the-future-of-self-d-1542547679

Released earlier this year at the Geneva International Motor Show, the Akka Link & Go 2.0 is an autonomous car that’s designed to be social. It has all the technology that allows it to drive unaided by humans—cameras, lasers—and it can transform from human-driving to computer-driving mode by retracting the steering wheel and pivoting the drivers seat around to face the back. But this is the interesting part: The Link & Go 2.0 has an integrated system which connects multiple passengers over a network to help with carpooling and car-sharing.

Did I say this is going to happen in 2020? It might actually happen faster, nobody knows.
 
What’s the best way to prepare for this revolution of self-driving cars + ridesharing? It’s a no brainer again. Start offering the same service but initially with the drivers. Enter personal transportation business with an existing, simple service (taxi transportation). Then trial with service with non-professional drivers to learn more. Experimenting with ridesharing services is the next obvious step. And once you switch to self-driving cars, you no longer need the drivers. So the fight for the blue ocean market share has already began and some of the public transportation as we know it today, may soon be something we read from the history books. 
 
Guess who might be doing just that?

The Future of Simulation

As we know, forecasting the future 50 years forward is quite difficult.

But what about forecasting only 25 years forward? Would that be easier?

Well, I’ve tried. That was back in 1993 when I was one of the European finalists at Honeywell Futurist Competition (see the video). The task was to imagine and write about something happening 25 years later (that would be 2017). So only three years to go. I must say my vision of 2017 could almost become true. We’re not too far… (except we no longer have this thing known as ISDN.)

So here is the story (written in April 1993).

Honeywell_Be_Brilliant
Honeywell Futurist Competition – Be Brilliant!

In this description I will briefly introduce you to subjects very close to my heart, namely how to learn new languages and communicate with friends around the world. Both of these objectives can be achieved with the world’s most advanced simulator, ARES. This abbreviation stands for Advanced Real Environment Simulator. It can take you to another world, making you feel just like you were there. All this will be achieved through advanced 3D simulation and powerful communication networks. As I strongly desire to be personally involved in the development of telecommunications, the next 25 years look fascinating indeed.

The Day After

Would you like to walk through a Japanese shrine, admire all the statues and at the same time learn Japanese? And all that without ever being more than half an hour away from your home. Today, you can do that. The technology has come far enough.

This is a story of an invention, which revolutionised the idea of time and place. Based on recent advances in telecommunications techniques and on three-dimensional (3D) presentation and detection censors, this concept responded to the challenges of the demand for language education and travel experience.

We call this device simply ARES or Advanced Real Environment Simulator. The first prototype was built in the year 2015 and now, three years later, this is what our brochure says about the latest model:

“.. .ARES is the most interesting toy man has ever built. And it is much more than only a toy – it is the most realistic machine able to take you to another world , literally. And as people in interconnected simulators can communicate with each other, you must be getting an idea of how powerful the ARES can be…”

The technology behind the scenes is both simple and complex. ARES uses basically components which are publicly available to keep the cost down, but some custom design parts are also required. ARES is not just another version of the good old Virtual Reality thing. This is more, this is a complete business idea.

ARES is built around an ordinary room, sized about four meters each way. All the walls, the ceiling and the floor together can form a 3D scene inside the room, enabling the most realistic environment simulating the real world. The surfaces can also detect the exact position of the real (like you) persons and objects inside the room and therefore track for example the movement. That information can then contribute to the further actions taken by the simulator. And as the people in the simulation are inside a free space, no special helmets or other extra burdens are necessary.

There are already several ARES simulators installed all over the world and the number is increasing rapidly. Each of the machines is connected to the public telecommunications network. This wide band network is based on the ATM (Asynchronous Transfer Mode) and optical fibre technologies. The network is able to transmit the information on a scene in one ARES to another ARES machine somewhere else. One of the ARES controls everything and is located in Paris. It takes care of distributing new scenes and programs to the other simulators and also controls the connections between the other machines. Several ARES sessions can share the same scene and the people can meet each other in this simulated environment. You are still physically alone in your own ARES room, but you see all the other people as simulated figures around you. Incidentally, have you ever tried to walk through anyone? In the ARES even that can be tried.

Getting interested? You should be, as using the ARES is an ultimate experience. As you first enter the simulator, you notice nothing special. It looks like any other small unfurnished room. But the magic begins as soon as the simulation mode is activated. All the walls, the floor and the ceiling suddenly wake alive. They form an extremely high-definition 3D environment, in which it is very easy to lose one’s sense of time and place. The life in the simulator is smooth and real-time. You can walk around and touch any of the 3D-objects hovering in the air. The only difference is that in this world nothing is real. Because the physical walls of the room set some real boundaries to the space in which you can move, movements like walking are actually exaggerated by the machine. So to go forward you have to only take a step forward and the machine makes you walk through the scenery. It could not be easier.

ARES is currently being used in the three most interesting business dimensions of telecommunications. These are Telepresence (3D Video Conferencing, formerly also known as Teleconferencing), Travel Experience (TE), and most interestingly, Language Education (LE). The relation between these is somewhat indistinct, as the language education, for instance, is done in the environment of a foreign country.

Telepresence is the most old-fashioned way to use ARES. The rather basic and awkward teleconference rooms, dating back to the late 1990’s, have now widely been replaced by ARES. This is natural, because with ARES the meeting rooms of parties being on the opposite sides of the earth can be easily and comfortably combined. The parties can actually see the others sitting in the chairs brought inside ARES and communicate just as if they were in the same room. For obvious reasons, however, you cannot squeeze the hand while handshaking…

A more interesting way to use ARES is the travel simulation. Just think of all those Chinese, Japanese and other nationalities with a huge population. There is a great demand for different kinds of travel experiences. But if all of these people would actually begin to travel around the world, the increased waste and pollution would make the earth an even more difficult place to live. But with ARES there is no pollution. As a matter of fact, our company has already got recognition for our work creating very environmentally friendly products. Telecommunications in general is, after all, very environmentally friendly business.

The scenes available for ARES include environments from several different countries and cities. In each of these places you can go around and see almost anything you want to, because the simulated scene includes almost complete image of place. With just a touch of a button you can jump from the promenade of the Champs Elysees to the Shinjuku subway station in Tokyo in rush hour. One of my current favourites is the one in which I can walk on the top of Himalayan mountains. Not to mention being in San Francisco and watching the Golden Gate in one of those foggy sunsets. I wouldn’t miss a chance to visit these real places again, but it takes a lot more time and money.

The third and most interesting use for ARES is in language education. While learning languages, you easily forget what you have heard. And if you read something, you learn it. But only by experiencing something you will remember it. This is the basic concept behind the scenes of ARES. Nothing in the world is more effective in language education than being in the actual situations. Unfortunately, not everyone can travel to Paris to learn French, to Tokyo to learn Japanese or to Sao Paolo in Brazil to test one’s Portuguese. If, for example, all Asian businessmen wanting to learn more languages travelled to authentic places to learn a language, it would be a catastrophe. That is why my company is in business. If they cannot go to Paris, Paris must go to them.

Let me now show you how people can benefit from ARES while learning or improving their language skills. Outside the simulator I first select the scene to be Paris. Then I push the button for Level Five French. There are, of course, different languages and different levels of each language available. I enter the simulator and the fun begins.

I find myself in the middle of Arc de Triomphe. In the sign hovering in the air I can see that my first task is to find a room in a hotel. The sign was only 3D simulation and touching it makes it disappear. Well, as was told earlier, everything else is simulated as well, but believe me, it looks really real.

I turn to a couple looking like tourists and ask them where to find a hotel. Well, my question was of course in French. Unfortunately they turn out to be in another simulator in Palo Alto, California, and are just taking the rest of the tourist spots they missed on the actual four-day activity holiday in real Paris. I try again and this time I get the location of the tourist information centre where I could get more data on the hotels. The person answering me was either one of the teachers being in the same simulation or one of the robots taking care of some of the educational tasks. There was one sentence in the answer, which I could not understand so I ask ARES about that. The answer appears in front of me with an explanation. After understanding the answer I touch it to make it disappear.

With all these nice scenes and gadgets, we soon ask how all this is created. Thanks to the advances in computing power and neural networks being able to understand three-dimensional objects, creating a simulation like this is not anymore so painful as it used to be before the change of the millennium. Each of the ARES surroundings is created by combining a 3D-film shot in the real environment and 3D­ enhancements made with neural network computers.

Shooting the ARES films is a great job. Instead of the camera you use the special Imaging Glasses (IG) to take a look of what you want to include in the simulation. The scenes are then compressed in real-time with very high performance techniques and saved in the memory of the computer you are wearing. Wearing a computer means having it attached to your clothes in a manner that nothing unusual can actually be seen. If desired, the data can also be sent to the computer located at the headquarters. This transmission can be sent either with the ordinary digital mobile network or the satellite communications network.

The second step in the process is to enhance and modify the scenes to the degree required by the project. The computers based on neural network technology can first analyse the scenes (the “film”) and construct complete 3D environments from that. That is almost enough for the travel simulation. In addition some additional data must be attached to the objects on which the people using the simulation might ask for more information.

The language education environments or scenes require more work. The necessary instructions and robot teachers must be installed in the proper locations. Links to the other simulators and to the real teachers participating in the education are always done dynamically, so we do not take any additional steps for those functions.

As you should by now realise, it is no wonder that ARES became so popular all over the world. When I was younger, some 25 years ago, I would have done everything to get my hands on something like ARES. I still remember all those tedious hours while trying to learn to speak some proper French. With ARES it would have been so much more fun…