Smart City Driver

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Your car is talking behind your back, but who to?


Eighteen new Teslas were registered in Hong Kong in the first three months of this year, down from 3,697 in the year-earlier period, when buyers were scrambling to beat a drastic cut in tax incentives for luxury electric vehicles.

Ironically, the government introduced the 100 percent waiver on first-vehicle registration charges as part of efforts to spur the development of EV infrastructure in Hong Kong, only to reign it in when sales of cars were too successful – in particular, those of the ubiquitous Tesla brand.

But snuffing out sales of the only EV brand to have sparked enthusiasm among Hong Kong’s luxury marque-obsessed drivers hasn’t seen a corresponding jump in demand for less costly and more environmentally friendly EV models, Transport Department data show. Far from it: just 37 EVs were registered between January and March – along with the same number of Bentleys.

“Because of the grant, we have a lot of Teslas, and thus we have a lot of cars, and thus that’s bad for the environment,” says XT Khaw, co-founder of MoveCo and Cove, two Hong Kong-based mobility startups, describing the government’s mindset. “It’s a little bit of a strange way to think about it, because in the first place, if you have given a grant you should have thought about people buying them and figured what to do with them.”

Meantime, developers and the city’s two power companies have piled in behind government efforts to roll out an impressive network of charging stations – many of which offer free electricity for owners of Hong Kong’s fewer than 12,000-strong fleet of EVs.

“We have the infrastructure already, and it’s always empty,” said Khaw, adding that it was largely due to Tesla’s appeal and sales growth rates that Hong Kong now has such a high density of EV chargers – including what was the world’s biggest network of dedicated Tesla stations and more than 1,800 public charging facilities.

Meanwhile, in Khaw’s native Singapore, Teslas have been effectively taxed off the streets by the government, which figured out they were a net negative for the environment. Tesla owner Elon Musk has, in turn, refused to invest in any charging stations in the country.

All of which goes to show how minor policy decisions can have a cascading effect across an entire industry or ecosystem: A poorly thought out position may have lasting long-term consequences in how today’s cities will stack up in the future. In AmCham’s survey of members published last month, respondents cited a bureaucratic mindset and red tape as by far the biggest potential threat to Hong Kong’s campaign to become a leading Asian smart city.

Singapore’s early acceptance of ride-hailing and the proliferation of Grab and Uber, for example, has meant that the city-state’s auto insurers have grown accustomed to pricing risk on shared vehicles. In Hong Kong, where the government sided with licensed Taxi drivers to stifle competition from the upstarts, insurance companies have been very conservative, says Khaw, whose first company, Cove, is a sharing model that seeks to place underutilized cars in fleets owned by local auto dealerships in spare parking lots operated by building management companies – for use by a pool of participating residents.

For dealers, any revenue is a welcome boost for what are otherwise depreciating assets that are costly to store in Hong Kong’s sky-high real estate space, Khaw said. The property management companies provide free parking, as well as marketing the service to their tenants. That means Cove’s cars only have to be used around 10 percent of the time to be viable, and the company is seeing rates of around 15-20 percent, she said. Private cars on average spend only about 3 percent of their time on the road.

To overcome resistance from Hong Kong’s insurers, Khaw said she and co-founder Lawrence Hui, realized they needed to focus on technology to capture and analyze driving data – which is the focus on their second venture, Moveco.

With low margins from auto-insurance, the first priority of the companies is to reduce risk and payouts, she said. “They want to understand driver behavior but don’t have enough data.”

It turns out no one in the mobility sector does.

“The connected cars weren’t there and [carmakers] weren’t collecting data anyway,” said Khaw.

Part of the reason automakers were slow to the Big Data drive of recent years may be down to the fact that they typically have no direct link to the driver. Once a car moves off the assembly line, it is most likely to end up with a car dealer – who has less motivation to collect car- and driver-generated data than an OEM or insurer.

It’s that information gap that Moveco seeks to fill. “A big part of what we look at is connecting those dots,” she said. “Which is why we focus on technology, so we know a lot about who drives the cars. If we understand how people drive, we understand more about cars. Whenever anyone drives around this area, this is what the driving patterns are for a particular age group. It’s not linked to the driver, but to the behavior.”

And the more vehicles the better. Moveco hopes to work with fleets of taxis and buses, she said.

Effective collection and management of mobility data feeds back into government decisions about safety, infrastructure and policy: where do bus drivers tend to go too fast around corners? Where are the shortages of parking spaces most acute? How can dynamic pricing help smooth traffic volumes?

Khaw said that their business doesn’t depend on selling data to the government. Which is just as well because – after heaping generous praise on InvestHK – she described the frustration of trying to engage with Hong Kong’s Transport Department.

An email to a government official in Singapore would elicit a speedy response – spurred by a mandatory seven-day response time and a well-designed system of automatic escalation through the ranks of bureaucrats.

“In Hong Kong, it’s radio silence and then they give you a very convoluted answer that doesn’t explain anything,” she said. “To meet the Transport Department is impossible. We couldn’t get a meeting – until this day.”


Jargon buster: Mobility

In simpler times, it was the ability to move or be moved freely and easily – whether of a person, body part or a peasant rising through the ranks of society. Today, everyone talks about mobility services, mobility platforms, mobility companies. Time to tie the jargon down.

“Whatever way to get you from point A to point B is what mobility is about,” says XT Khaw, co-founder of two Hong Kong-based mobility companies.

It could be a car, a bike, a train. Presumably, it could also be your feet.

Distinguishing the concept from the outmoded “transport,” mobility is also about getting services and goods to people. So, all you couch potatoes out there, you too can be part of the mobility movement, just dial in a pizza!

The world’s biggest mobility companies are what we once called ‘carmakers’: “They get metal and they design it and they make the car. Now they say they’re mobility companies,” she says.

Carmakers are slowly recognizing they must adapt or die: “Where they really need to be in the future is shared, electric, automated and connected, and none of them are really there yet.”

Mobility is increasingly tied up with the concept of the sharing economy: Some startups seek to co-share the trunk of your car to deliver goods; there are suggestions that idle computing power of cars – and especially smart cars such as Tesla – could be put to use mining cryptocurrencies.