Who Is The Zuckerberg Of Traffic?

On a closed course in Brooklyn, the Department of Transportation (DOT) is testing a fleet of cars that can’t crash into each other. At the same time in Hokkaido, Nissans traveling down slippery mountain roads know when and where other Nissans have spun out or applied their anti-lock brakes. And tucked away at BMW’s test tracks in Stuttgart, motorcycles are predicting weather, avoiding intersection collisions and coordinating turns across oncoming traffic.

Each of these examples relies on a vehicle-to-vehicle (V2V) network where cars speak to each other through sensors and short-range communication devices. In short: talking cars. But not of Knight Rider’s cybernetic-supercar ilk; a V2V network is more like Facebook for traffic — a public square where surrounding cars become your “friends” and everyone on the same highway becomes your “network.”

This is the first of three pieces we have written about the future roles digital technologies could play in shaping how we drive. A collaboration by three strategists here in the office, each piece explores complementary but different aspects of the problem.

The DOT estimates that such a network could address nearly 80 percent of all accidents in the U.S. With a V2V network in place, rear-end accidents would be replaced by collision warnings, gauging distances while merging onto a busy highway would become an exact science, and bad road conditions would never come as a surprise. Human error, the single largest cause of vehicular accidents, would be a forgotten foe of road safety.

So why are V2V networks, a seemingly unmissable advance in the way we drive, missing from U.S. roads?

Automakers don’t see the full picture (and neither do we).

If Henry Ford’s mission in 1909 was to “democratize the automobile,” then Ford CEO Alan Mulally’s mission a century later should be to democratize data and communication between automobiles – to allow the unhindered transfer of useful data across different makes, models, roads, cities and countries. But, it’s unlikely that a universal V2V network will be championed by an automaker. Automakers don’t see the full picture: A V2V network gets better as the number of cars in the system rises, and more data-contributing cars leads to a smarter traffic system. It takes one absentminded Toyota to step on the sand-castle built by a network of Nissans.

Ironically, what’s good for the transportation system often overlaps with the needs of consumers, yet the connection between personal consumption and the effects on the system as a whole is rarely made. Consider Beijing, home to the fastest growing middle class in the world and, with that, the fastest growing market for passenger cars. The city will have 7 million cars on the road by 2015 if the current roads — whose capacity is currently at 6.7 million cars — don’t buckle under the pressure of new motorists. And the threat of damaged roads and congestion won’t knock a car off the top of Chinese consumers’ shopping lists – especially with the entry of low-cost cars and the allurement to Western brands and the status they come with.

On the other hand, what’s good for the transportation system rarely overlaps with what’s good for automakers. Congested roads in Beijing need less cars, and automakers have little incentive to voluntarily forfeit sales. A systemic issue like congestion isn’t their fault; it is either a sign of economic growth (like Brazil), poor design (like Moscow), or both (like China). Ultimately, the system suffers as people continue to purchase cars rather than relying on public transport, car pooling, or any other “system-friendly” alternative.

System-friendly innovations like V2V networks are not alluring investments for the auto industry. Automakers work with tiny per-car profit margins (by contrast, Apple enjoys a profit margin between 30% and 50% on the iPhone). The cost to equip each car in the U.S., all 250 million of them, with the technology necessary for a V2V network is astronomical. Moreover, doing so would require cooperation between competitor manufacturers (acts in unison typically reserved for government bailouts). The ability of one Nissan to talk to another is one more reason why buying a Toyota might not be a good idea, but if Nissans talked to Toyotas, V2V would be a public service  that helps the system as a whole, rather than a competitive advantage.

Thankfully, automakers are no longer in charge of transportation’s future. Consumers are.

A consumer-led transportation revolution?

There are 7 million drivers across the world beating traffic with their smartphones – each drives around with an application called Waze open. By tracking the location of the phone, Waze can detect and display traffic jams in real time. Users can augment this data by uploading pictures of road conditions and sending reports – with one touch – of fender benders, police cameras, or any other traffic-impinging hazard. Waze liberates the V2V network from automakers, allowing a driver of any car to outsmart traffic with their phones.

This is how a Facebook-for-traffic will be born: As a guerrilla V2V network relying on smartphone technology that transcends vehicles and creates a truly interconnected system, rather than on cars. As smartphone penetration edges over 50% in the U.S. in the coming years, the popularity of mobile apps that help drivers communicate will replace any need for automakers to design, implement and collaborate on V2V technologies.

The Facebook-for-traffic will be born as a guerrilla V2V network relying on smartphone technology that transcends vehicles, creating a truly interconnected system. It will be created by consumers and start-ups, not by auto manufacturers.

Suddenly, the overlap between what’s good for transportation and what’s good for drivers will be immediately accessible through a mobile device and made possible by a community of data-contributing drivers — regardless of what car they are driving. Without the interests of automakers involved, users can converge around the best V2V mobile application the same way 800 million people made the decision to join the same social network. A missed opportunity for automakers shifts control to application developers and the digital public.

The creator and owner of this mobile application will be the crowned the new leader of the car industry, ruling over dealers and automakers through control of the largest set of behavioral data about drivers in the world. From places people go (and when) to the number of miles driven per day, this mobile application developer will have the clearest, most accurate view of driving habits today. Once the V2V network sets the foundation for how people communicate, the possibilities of what they exchange will be limitless. The app might be a great directory to find a ride to work, a market for people wanting to buy and sell used cars, a recommendation engine for good mechanics, or an advertising platform for small business.

Slow-to-adapt automakers will gravitate to the latter, paying large sums for the chance to advertise to drivers in hyper-relevant contexts. Those who take time to learn the platform will understand that the best form of participation will be product integration. Here, the car will become an extension of the V2V network, doing all it can to house the hardware, improve the data and help augment the sensor abilities of the phone. And, product integration won’t (can’t) be in the name of competitive advantage – an automaker who strikes an exclusive deal with a particular type of phone or a certain operating system will alienate drivers with different tech requirements. Consumers will judge technology based on how many of their friends can join, not how many of their friends don’t have it.

The “Zuckerberg of Traffic” is a position yet to be filled. The race to wear the crown will likely be a technology company or entrepreneur. Automakers have proven themselves consistently slow to integrate new technologies to serve their user base. Consider that Apple acquired the voice-assistance software, Siri, in 2010 and integrated it into the iPhone 4S less than 12 months later. In the weekend after its launch, the phone was already in the hands of 4 million people. Consider that GM spent 15 years acquiring 6 million subscribers to their in-vehicle voice support system, OnStar. Automakers need to play catch-up, and that means selling more than just cars. They have to acquire mobile technology expertise – a feat that is already 7 million Waze users and 80,000 Bey2ollak participants too late.