Sep 27, 2019

Axios Navigate

Joann Muller

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Expert Voices contributor Miguel Gamiño Jr. explores how modern payment technologies could help improve lagging transit systems.

Today's Smart Brevity count: 1,348 words, ~ 5 minutes.

1 big thing: Cities could flip the switch to EVs

Illustration: Aïda Amer/Axios

The U.S. vehicle market could finally be going electric — and faster than you might think.

What's happening: While California and the Trump administration go to war over the state's right to set its own tailpipe emissions standards, large cities are taking steps to curb pollution and corporate giants like Amazon are launching their own green agendas.

Why it matters: EVs have been slow to catch on in the U.S. so far, and an anti-regulatory environment in Washington certainly isn't likely to change that. But in traffic-choked cities where greenhouse gas emissions are concentrated, momentum is building for cleaner urban fleets.

What we're seeing: Cities around the world are taking steps...

  • New York City is getting ready to impose the country's first congestion pricing program as a way to regulate traffic, control emissions, and raise capital for infrastructure.
  • London's congestion zone is also a clear air space, where older pollution-spewing vehicles are not allowed. Many companies have opted to upgrade their fleets rather than pay the charges.
  • In China, megacity Shenzhen passed a draft policy that will require all future ride-hailing vehicles be electric. U.S. and European cities could easily do the same.
  • Los Angeles Mayor Eric Garcetti's version of a Green New Deal would require 80% of vehicles to be electric by 2035. As part of the plan, the city's own bus fleet would go electric by 2030.
“With flames on our hillsides and floods in our streets, cities cannot wait another moment to confront the climate crisis with everything we’ve got.”
— Eric Garcetti, in HuffPost

Corporate giants are getting more aggressive, too. Amazon CEO Jeff Bezos last week unveiled sweeping new energy and climate plans, including an order for 100,000 electric delivery vans from Rivian, a Michigan-based EV startup in which it is an investor.

  • “What Jeff Bezos did last week was one of the most important pivot points in tech and climate we’ve ever seen," Morgan Stanley analyst Adam Jonas tells Axios.
  • It will only put pressure on other companies to follow suit, he says.
  • FedEx is adding 1,000 electric delivery vehicles to its fleet, and UPS has deployed a similar number as part of a rolling lab for alternative fuel trucks.
  • "For years, sustainability was about doing the right thing. Now, by not doing it, you're losing business," Jonas adds.

Yes, but: Corporate commitments like Amazon's (or Google's biggest renewable power buy announced that same day) won't save the planet because climate change is happening too fast, Axios' Ben Geman writes.

  • A newly updated analysis of thousands of these efforts by states, cities and companies found they can help, but they don't replace the need for stronger national-level emissions policies.

They could help tilt the market toward EVs, though, especially in dense cities.

  • EVs make sense for corporate fleet operators in urban areas where routes are shorter and more predictable.

The bottom line: Fleets and cities will drive EV adoption more than retail consumers and federal standards, Morgan Stanley said in a note.

2. U.S.-China trade tensions could slow AVs

Illustration: Rebecca Zisser/Axios

A proposed U.S. crackdown on sharing technology with China could threaten the development of self-driving vehicles, the Wall Street Journal reports.

Why it matters: Many companies developing autonomous driving systems split their work between the U.S. and China, with offices, investors, engineers and customers in both countries. Unscrambling that egg could be difficult.

  • “Our company would be split in half,” David Liu, CEO of Plus.ai, told WSJ. The American self-driving software developer recently teamed up with Chinese truck maker FAW Group.
  • The U.S.’ proposed controls are “a cloud hanging over every technology company,” he said.

The big picture: China's aspiration to dominate the AV field is heavily dependent on R&D centers in Silicon Valley.

  • Even though some companies don't plan to deploy AVs in the U.S., there's a certain cachet that comes from validating their technology and securing investment in California — the epicenter of AV research.
  • 14 Chinese companies have licenses to test self-driving cars in California, WSJ reports.

What to watch: The Trump administration could use technology controls as a bargaining chip in its ongoing trade confrontation with Beijing, China expert Michael Dunne, CEO of ZoZo Go, tells the paper.

  • “We’re at a crossroads,” Dunne says. “Will it be reciprocal openness or reciprocal protection?”
3. Tapping to pay subway fares could improve transit

Credit: Marc A. Hermann/MTA New York City Transit/CC BY 2.0 (cropped)

The New York City subway system recently reached one million “taps” in its contactless payment system, as a growing number of public transit agencies adopt the payment technology for its convenience and efficiency, Miguel Gamiño Jr. writes for Axios Expert Voices.

Why it matters: Contactless payment technology can bring down operating costs and act as a test case for subsequent attempts to make subways more accessible and modern.

By the numbers: Across the U.S., aging transit systems suffer from a lack of funding, resulting in risks to public safety.

  • In 2017, the U.S. DOT identified a backlog of $90 billion in repairs needed.
  • In March, the American Public Transportation Administration estimated a need for $232 billion in "critical public transportation investments."
  • In 2018, U.S. public transit ridership declined to a level not seen since 2006.

Between the lines: The rise of ride-hailing has offered a relatively expensive alternative to public transit, leaving lower-income residents dealing with inadequate service.

What's happening: Transit payment systems in the U.S. are beginning to catch up to programs in other countries.

  • In London, more than half of all transit payments are contactless, via a system set up by Cubic and Mastercard. This has cut the cost of fare collection down from 15% of revenue to 9%, and is expected to reduce it to 6%. (New York's program is modeled on London's.)
  • Rio de Janeiro partnered with Visa to introduce contactless transit payment.
  • Sydney's entire transit network has now incorporated a Cubic contactless payments system, covering an area as big as Switzerland.
  • Portland recently became the first city to integrate Apple Pay into its fastpass.

Read more

Miguel Gamiño Jr. is the EVP for global cities at Mastercard. He has served as New York City's CTO, San Francisco's CIO and El Paso's CIIO.

4. Driving the conversation

911: Uber rolls out new safety features (Kia Kokalitcheva — Axios)

  • Why it matters: Ride-hailing companies have long been criticized for their handling of sexual harassment, assault, and violence. The new features include the ability to send a 911 text to police from within the Uber app, and an option for riders to receive a unique PIN number to verify their driver's identity.

Policy: Cyber rules for self-driving cars stall in Congress (Maggie Miller — The Hill)

  • What's happening: Efforts to reintroduce the AV Start Act in Congress, with new provisions to address hacking threats, seem to be going nowhere. Lawmakers have been sidetracked by a host of other issues and it's hard to imagine any bipartisan work getting done amid an impeachment inquiry.

Trains: The future face of high-speed rail in the Northeast Corridor (Aarian Marshall — Wired)

  • Why it matters: Amtrak is spending $2.4 billion to upgrade its Acela train service between Boston and Washington, but the challenge is getting them to go as fast as high-speed trains in France. A few engineering tricks could help them navigate curves faster.
5. What I'm driving

2020 Jeep Gladiator Overland. Photo courtesy of Jeep

This week I'm driving the 2020 Jeep Gladiator, arguably the coolest-looking pickup truck on the market.

  • It looks and feels like a Jeep inside and out, from the round headlamps and iconic 7-slot grille to the upright, horizontal dashboard.

My thought bubble: The Gladiator, based on an extended version of the versatile Jeep Wrangler, is meant to be driven off-road. Cruising around metro Detroit, even on its terrible roads, isn't a proper test.

  • That said, I was pleasantly surprised at the Gladiator's relatively quiet and smooth ride on suburban streets.
  • I desperately wanted to take it off-road to see how it would crawl over boulders or plow through sand dunes.

Details: The Gladiator comes with a 3.6-liter Pentastar V-6 engine today, but an optional 3.0-liter EcoDiesel V-6 will be added in 2020.

  • Pricing starts at $40,395, but my test model came in at $53,045.
  • A 6-speed manual transmission is standard; mine had the $2,000 8-speed automatic.
  • Jeep counts more than 80 safety and driver assistance features, including blind-spot monitoring, rear cross path detection, adaptive cruise control, and electronic stability control.
  • A forward-facing off-road camera protected behind the grille lets you see obstructions ahead on the trail.
  • We didn't remove the doors or the 3-piece hard-top roof, which would have been fun if we were going someplace other than Kroger.

The bottom line: The Gladiator is a fun and capable pickup, but only if you're likely to spend most of your time off-roading. At prices that can easily top $50,000, it's not the most practical truck around town.

Joann Muller