Silicon Valley Insight: Accelerating transformative innovation in the transportation sector

Over the last decade, the transportation industry has been going through incremental evolution where electrification of vehicles and autonomous driving technologies were at the center of focus. The COVID-19 pandemic reprioritized the demands of consumers, accelerating transformative innovation in the transportation sector. New initiatives, such as public-private partnerships for public transit, Micromobility-As-A-Service solutions for last-mile commuting, and the digital transformation of auto commerce, have gained significant momentum over the last six months.

Public transit usage in metropolitan cities from San Francisco to New York, and globally from Sao Paulo to Dubai, has plummeted below 70% since the beginning of the pandemic, causing daily revenue losses of over $100M per day. Public transit authorities also decreased the frequency of transportation services, further displacing essential workers and those dependent on buses and trains. Combined with the public fear of being in close proximity to others, public transit authorities are struggling to provide a safe alternative. The solution may lie in public-private partnership models, where nimbler, on-demand fleets can satisfy these needs by promising safer, more efficient alternatives.

By early 2020, the capital-intensive micromobility solutions, such as bicycle and electric kick scooter sharing, which raised over $5.7B, was losing investor confidence. However, as the pandemic hit, these solutions rebounded and gained a second stride from a nice-to-have to a must-have, providing users a safe and efficient alternative to move around town. While the promise of robo-taxis and autonomous vehicles is still out on the horizon, consumers are using options that are conveniently accessible, hygienically safe and affordable.

While the overall demand for car sales slowed, used car sales rose 17% above pre-pandemic forecasts. Consumers are weary of physically spending time in a dealership, which has accelerated dealerships to adopt innovative technologies. Tools like web-based virtual showrooms and high-touch, concierge-like services has shifted the car buying experience online. Asset light platforms also emerged, where car dealers no longer have store fronts, while operating fully online, ultimately delivering the car to you.

Amidst the crisis, the last six months forced the auto industry to shift gears to adopt new technology innovations in order to thrive during these challenging times.

If you enjoyed these insights from our Orange Silicon Valley experts, we would like to invite you to attend our upcoming live webinar on Wednesday, 7 October at 4:00 pm GST.

Jay Onda
Jay Onda

Jay Onda has been building bridges within the corporate innovation, venture capital, and start up ecosystems for over a decade. At Orange Silicon Valley, he looks for strategic relevance for industry within the three horizons of innovation to develop strategic relationships through collaborative partnerships.