Battling city congestion: Uber and Smart Cities

Whilst Uber is continuing to lose money quarter after quarter, it may be holding a ‘get out of jail free’ card very close to its chest. 

Uber has something that every company wants – data. With every new trip requested by Uber customers, more and more of it is collected, such as favourite restaurants, cafes and preferred times of travel and traffic. 

People travel with Uber in cities all over the world and at all times of the day, making it possible to compare travel conditions across multiple parameters, including the time of the day, month and year, and can also show how traffic is impacted by road work and other events. 

Data is generally valuable for a variety of reasons – it can be sold to third-parties to optimise and customise services and ads, which is part of the reason why “data-mines” such as Facebook and Google are so successful. But data shouldn’t just belong to companies, and companies are not the only ones able to benefit from data. It can also be used by communities and urban planners to improve infrastructure and public transport. It could help identify high traffic areas, find gaps in public transport and adjust services to streamline the commute.

If shared with city planners and local authorities, it’s easy to imagine how Uber’s data could be used to improve public transport, bicycle lanes, and footpaths. Imagine a highly customised transport app that could factor in congestion and could show you the fastest way of reaching your destination – whether by walking, cycling, driving, or taking public transport.

Uber is not exactly incentivised to share their data for this very reason. Its business model relies on people choosing a car for their commute and having data that improve other modes of transport might pose direct competition.

Uber has said that if it was to release meaningful data to urban planners, it could impede its business positioning. After all, more people using public transport means fewer people using Uber. While Uber denies its impact on other transit systems, research shows that Uber and Lyft account for 20% of San Francisco’s traffic and 50% of the rise in congestion. Furthermore, public transport use has been declining in most major US cities for the past decade. 

Although Uber keeps its data close, it has been willing to share some of it in its Movement app which gives city planners and members access to anonymous data from different cities. Uber’s data can help city dwellers avoid crowded areas based on the time of travel and assist urban planners to create better solutions for their cities. 

With the Internet of Things, this data could even be key in the development of smart cities. 

IoT wireless connects and measures city services, such as smart traffic monitoring, smart parking, and rubbish collections. Using minimal power and bandwidth, the low-cost technologies also allow investors to gauge returns much earlier.

Smart cities are an important part of future infrastructure and development. There are currently close to 4 million smart city technologies being used and that number is expected to grow to 156 million by 2024. 

Smart City technologies will soon be rolled out in the Melbourne suburb of Oakleigh. The Monash City Council secured a grant of $700,000 from the Australian Government (Smart Cities and Suburbs Program) and Monash University contributed $70,000 towards the project. This has equipped Traffic Technologies with $700,000 to install an AI smart city control system that will intelligently assist in the management of road assets. This technology upgrade will improve urban planners’ understanding of the way we use the roads.

Uber is worth $49.42 billion, which is nothing compared to the 5.2 billion it lost last quarter. Perhaps the bigger value isn’t in Uber’s services but in its data? 

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*Reach Markets have been engaged by TTI to assist with private investor management.