By Sampo Hietanen, CEO and Founder of MaaS Global
It’s easy to think that efficiency and resiliency are enemies. Efficient public transport systems are crippled due to the virus scare. Optimizing office space utilization drives people to work from home. Highly tuned international supply chains reveal their vulnerability when nations start acting selfishly.
But if we take a closer look at what is failing during the pandemic, it’s not the search for efficiency itself, but centralized structures and lack of alternatives. On the other hand networks tend to prove both their efficiency and their resiliency during times of crises.
Distributed networks have been studied well before the arrival of the Internet. In a network a signal often travels faster between two nodes than via a centralized hub, and the setup is resilient should anything happen to a node or several nodes in the system. The impulse does not get stuck, it is simply rerouted. That’s how the network providing signal to your cell phone works and that is how the Internet works. That’s actually also how modern military or many activist movements manoeuvre. And that’s how I think transportation should work.
So why are we still trying to cram everybody into the same bus or office or rely on one factory in China for live-saving drugs? I’m afraid the real challenge here is not efficiency, but control mindset and quest for power.
I am a traffic engineer by training. Based on what I learned at school, the best possible response to the Covid crisis in transportation would be total control. I’d know everyone’s needs and I’d now all hardware available, and I would optimize it all based on safety and economy. My model would then reserve people slots when and how to travel and no other behavior would be acceptable. You’d have to take the 01:37 train home, or you would be picked up by the Covid police and thrown in the slammer.
The problem is that I would not want to live in my perfectly optimized Covid resilient society and neither would anyone else, as long as they have a choice. Market economies do not exist just because they tend to be more efficient than any other system. They exist because of freedom of choice. People brought up in democracies and market economies do not easily succumb to uniformity.
So, although there is a significant shift towards central command during a crisis – as we’ve seen during Covid lockdowns, quarantines and stimulus financing – people will start testing the limits as soon as they can – as we’ve also witnessed. Any lasting solution in a democracy, although aiming at common good, should take into account an individual’s quest for freedom.
The great promise of the Internet was to make supply and demand transparent, and provide a platform where they can meet without central control or shady dealings. This change has been marching on, function by function, industry by industry, during the last 25 years. Only recently has it reached transportation: the supply of taxis and other rides, eScooters, and public transport has been made visible in many places. But the supply is terribly siloed and fragmented. What’s still in the early stages of development are the platforms, like our Whim, where all is visible, organized and available for choosing.
The real picture of the digital economy is of course not as rosy as this. Unregulated markets lead to monopolies as we are seeing as some spectacular Internet companies are monopolizing the marketplaces for search, advertising, holiday rentals and retail. The problem however is not the existence of these platforms, but failure to regulate them. Transparency in itself is a good thing, but we just shouldn’t be naive about it.
A central Key Performance Indicator to follow, when the digitally enabled transportation revolution unfolds, is how much of the data concerning supply and demand is visible at one moment. I think that during the Corona crisis and in its aftermath we will see a jump in transparency, of both supply and demand. At Whim we are currently witnessing record increase in subscription numbers because people want to express their needs and know their options. But the big question is who do we, as societies, trust to optimize the market?
The engineer in me says centralize, the entrepreneur and the citizen in me says let the market decide, but regulate. The exponentially increasing amount of data should serve developing systems that are more efficient than what we have today, but also more resilient, in other words based on network models, not centralized command. The only way to achieve this is to maximize transparency.
Share
