Sustainable Mobility Hits the Road

This article is part of a series of excerpts from the fifth annual State of Green Business Report, looking at trends in corporate sustainability. Download the free report from GreenBiz.com, and see all of our trends here.

Also, be sure to register for a free webcast taking place on Tuesday, February 7: The State of Green Busines 2012 - The Good News and Bad is hosted by Joel Makower and dives in to all the findings of the report. Click here to register.

While the public and media have focused on electric vehicles, others are taking the bigger view. Smart transportation systems aim to move people and goods around more quickly, more safely, and with less energy and pollution.

This is no idle matter. The world crossed a significant milestone in 2011: There are now more than 1 billion cars and trucks on roads globally, up from 980 million at the end of 2009. That number is expected to double by 2020. Combine that with two other recent thresholds -- the seven-billionth world citizen and the fact that a majority of humanity now resides in cities -- you have the makings for one hell of a global traffic jam.

The United States boasts the highest density of cars and trucks -- one for every 1.3 people -- but the 1 percent annual rate of growth pales compared with China, India, and Brazil, where annual vehicle growth rates are 27.5 percent, 8.9 percent, and 9 percent, respectively, according to the trade journal Ward's and J.D. Power. In many of the world's largest cities, drivers are going nowhere fast. Mexico City; Shenzen and Beijing, China; Nairobi, Kenya; Johannesburg, South Africa; and Bangalore and New Delhi, India, face the highest congestion, according to the 2011 IBM Commuter Pain Index. (By comparison, Los Angeles ranked 12th, New York City 15th, and car-choked Houston didn't even make the top 20.) The index ranks the emotional and economic toll of commuting in each city.

IBM, which sells control systems to make transportation systems smarter and more efficient, is one of several companies for which backups, bottlenecks, and snarls represent a vast opportunity. Another is Cisco; its Connected Urban Development initiative aims to harness information and communications technology to make fundamental improvements in transportation efficiency. Providers of such technologies hope to garner a slice of the multi-billion-dollar pie found in easing congestion in cities.

The car makers are seeing their business models upended by a new business model that puts the brakes on vehicle ownership. First among these is Zipcar, the largest of dozens of companies offering "mobility on demand," better known as car sharing -- the ability to easily find nearby vehicles to rent by the hour, an alternative to car ownership or traditional car rental. Zipcar and dozens of other car-sharing services are being joined by big players: Hertz (HertzOnDemand), Enterprise (WeCar), and U-haul (uhaulcar- share). While most are currently available in only a handful of cities, they will be widespread in the next few years. Last year, for example, Ford teamed up with Zipcar to make its vehicles available for car sharing on US college campuses.

Behind that business model is an even more disruptive one: peer-to-peer car-sharing services, in which anyone can make his or her vehicle available to others on an hourly basis. In the United States, RelayRides and Getaround are making inroads in P2P, as it is known, allowing car owners to make money renting their vehicles when they would otherwise sit idle, which is about 95 percent of the time. Software allows anyone with a smartphone to find a nearby rentable vehicle, and vehicle owners get to decide when, where, and to whom to rent -- and for how much. In a nod to the vast potential of P2P, GM launched a partnership with RelayRides last year to allow GM owners to rent out their idle vehicles using their mobile phone and GM's OnStar service.

These are the first signs of a future not far down the road, where owning a car is no longer a rite of passage or even a status symbol, and where "access to mobility" becomes the desired norm. After all, turning every car into a green one isn't much help if no one can get from here to there.

Image CC licensed by Flickr user Andrew Currie.