Opportunities and challenges for regional mobility

Round table discussion, moderated by Dieter Aigner, Managing Director of Raiffeisen KAG, with the experts

• Dr Harald Frey, Senior Scientist, Department of Transport Planning and Traffic Engineering at the Vienna University of Technology

• Jürgen Maier, Senior Fund Manager, Equities CEE & Global Emerging Markets, Raiffeisen KAG

• Walter Prutej, Managing Director and founder of SURAAA - Smart Urban Region Austria Alps Adriatic (pdcp GmbH)

• Michael Schwendinger, Public Transport, Sharing, Economy, Resources, VCÖ

Dieter Aigner: Mr Frey, roads are the biggest climate polluter among all modes of transport - around 16 per cent of global CO2 emissions were caused by road vehicles in 2022. The contribution of air transport and shipping was significantly lower at around three per cent each. You are working on sustainable transport concepts at the TU. How do you tackle such major tasks structurally?

Harald Frey: The discussion about mobility behaviour and changes is nothing new; people have been talking about it ever since it was recognised that it makes little sense for everyone to drive into cities sitting alone in their cars. Just think of the pedestrian zone in Kärntner Straße in the late 1960s. Even then, people recognised that certain forms of mobility were not compatible with certain structures. In the 1970s, new models were developed from the perspective of traffic calming. Today, many cities say that they need quality of life, and that people should be visible in public spaces. This is also an economic factor if there are pleasant outdoor spaces where people can spend time and walk. You mentioned the issue of air traffic. Although it is positive when we focus on alternative fuels, there are of course noise costs associated with air traffic due to the health effects of aircraft noise. Each mode of transport has different criteria by which it is assessed, which serves as a basis for investment decisions.

Our focus is on regional mobility concepts. What developments can be observed here?

Harald Frey: In the last 15-20 years, we have discussed the mobility transitionfrom an urban perspective, which is easier as there is a corresponding density and better public transport services. However, the challenges begin on the outskirts of the city and in urban agglomerations. In Vienna, mobility behaviour has hardly changed in the last 15 years; the proportion of car traffic in cross-city traffic has fallen from 79% to 77%. Despite measures such as nationwide car park management, there are certain habitual mobility patterns. When investing in infrastructure in Austria, we invest in both road and rail, which weakens investment in the other mode of transport. People then decide whether to travel by public transport or by car, but it is not possible to do both at the same time.

So it would be better for politicians to focus their investments on transport offers?

Harald Frey: The transport policy objectives should at least be reflected in the investments. Especially in rural areas, public transport can be operated on an existing road network. However, there is no point if a bus only comes three times a day. In terms of investment, operations will become increasingly relevant, especially in public transport, but also in private motorised transport. We have a dense motorway network that must be maintained over the coming decades. At the same time, we have to accept the external costs of accidents, air pollution and the fragmentation effect of infrastructure. The weighting of the parameters has changed in recent decades. Today we know that it is more efficient in terms of space and energy to make journeys on public transport on foot or by bicycle, especially in urban areas. This results in lower external costs for society. Transformation processes are always difficult. In research, we are increasingly asking process-orientated questions: How do we achieve the goals we set ourselves? These questions start with the municipalities and end with the EU when you look at the legislative levels in the transport sector.

Mr Schwendinger, the environmental NGO VCÖ, which focuses on mobility, also aims to create a transport system that is ecologically compatible, economically efficient, and socially fair. As part of the mobility prize that you award, exemplary concepts in the individual federal states are honoured. Can you give us an insight into which concepts are submitted here?

Michael Schwendinger: The VCÖ Mobility Award has been around for more than 30 years. We started it in 1992 and since then more than 6,000 projects have been submitted, of which we have honoured 400. These projects can be found in our online mobility database at mobilitaetsprojekte.vcoe.at. Companies, municipalities, schools, universities and other institutions or organisations can take part, and there are different categories every year. The prize is awarded throughout Austria but is also awarded separately in the federal provinces. The range of projects is very broad.

Can you give us a little more detail about one or two showcase projects?

Michael Schwendinger: A few years ago, for example, we honoured the Carsharing Austria umbrella association, which aims to network all the fragmented car sharing services and make them usable throughout Austria via a standardised roaming system. This means that if you are registered with one system, you can use car sharing services in Austria as a guest user in the other systems. In the freight transport and logistics category, we honoured a company that transports natural gypsum in Styria. From a mine in Tragöß to the company headquarters 120 kilometres away in Weißenbach near Liezen. By using the railway for the majority of the route and replacing the old diesel vehicles with a new fleet of electric lorries, it was not only possible to improve the CO2 balance, but also acceptance among the population. In the area of housing and spatial planning, there have been projects such as one in Wiener Neudorf, where flats were built in the centre and residents were given a mobility budget so that they could switch to the climate ticket and leave their cars at home. It's often about saying goodbye to old habits.

Are these projects being imitated?

Michael Schwendinger: Our aim is to bring good projects and initiatives to the fore and give them a stage. We create awareness and publicity, which often also gives the projects internal momentum. There are also imitations, such as the international project "31 Days" from Switzerland, which won an award in 2023 and was subsequently implemented in Graz, in the Vienna Woods region and currently in Vienna under the title "Car bet: 3 months without your own car". The idea was to give up the car keys for a certain period of time. In exchange, the participants were given a public transport ticket, a car-sharing membership, and an e-bike. Actions like this disrupt habitual behaviour patterns and create space for something new. Incidentally, the idea came from a youth group of scouts.

Mr Prutej, you are the founder and managing director of an automated e-shuttle service in Pörtschach and Klagenfurt. This probably makes you one of the pioneers in Austria as a provider of automated shuttle services. How has the service been received? What challenges do you face?

Walter Prutej: When we started in 2017, many people wondered what we were doing. At that time, there was hardly any framework in Austria, and we already had the first automated vehicles in use. In 2018, we were already driving daily and according to a timetable on federal and local roads around Lake Wörthersee, and last year we deployed the first automated fleet and the first autonomous on-demand service in Austria in Klagenfurt. All learning by doing! Our vehicles have no steering wheel, mirrors or pedals and are fully equipped with sensors and software. By law, however, they must have a safety driver on board. In Klagenfurt, we had three autonomous shuttles in operation, which could initially be booked according to a timetable and later on demand via app. We are happy to invite interested parties to test them free of charge, information on this can be found at www.suraaa.at.

What motivated you to set up the shuttle service?

Walter Prutej: In Austria, there are around 600 cars per 1,000 inhabitants, driving around 38 kilometres a day. 40% of all car journeys are shorter than 5 kilometres, i.e. traditional business and private journeys to work, shopping or school. In addition, the average professional driver in Austria is 55 years old and there is a major shortage of drivers, not only in Austria (currently around 8,000 vacancies) but also internationally. There is currently a shortage of around 230,000 drivers in Europe, and a shortage of around one million by 2030. Automation can help here by taking over human tasks.

Without automation, there will be less public transport and less logistics. We are currently running 15 research projects in Austria to drive automation forward. The aim is to be able to use autonomous vehicles 24/7 in all weather conditions and to replace the safety driver in the vehicle with a remote operator at the control centre, which could save up to 80% of operating costs, depending on the size of the vehicle. According to studies, one remote operator can control around 10 to 20 vehicles.

We are also working on getting the population on board and familiarising them with the technology. Our approval rate is 72% - only acceptance creates trust in this new technology. Internationally, autonomous driving is a huge market that is dominated by American and Chinese companies. Europe and Austria must be careful not to lose touch. We are focusing on European and Austrian value creation and are working with partners such as companies, research institutions, universities, and universities of applied sciences to build up this expertise in Austria.

Autonomous electric driving in heavy goods transport - is this still a dream of the future or is it already a reality in other regions?

Walter Prutej: I tested a platoon of 10 automated trucks in the USA back in 2018. The Americans in particular are investing heavily in automated trucks, as they also have a shortage of drivers, and are driving the topic forward. Automation can make transport safer, cleaner, and more connected. It is also becoming increasingly important in Europe. However, it will still take a few years before the technology is robust enough and the legal framework is in place.

Which sectors could benefit from the transformation of transport systems and therefore represent interesting investment opportunities? Does autonomous driving already play a role?

Jürgen Maier: In our working group, which is dedicated to the Future Transformation Topic of mobility, we are looking at the megatrendsin the mobility sector from a sustainability perspective. One important area is alternative drive systems such as electromobilityand hydrogen. However, we also look at autonomous driving and connectivity. From an investor's perspective, the topics of shared mobility, public transport, logistics, and last mile delivery are also very interesting. In the area of autonomous driving, we see the greatest momentum coming from American companies such as Waymo, Amazon and Tesla, which are leaders in the sector, as well as Chinese companies such as Baidu, pony.ai and WeRide. There is relatively little activity in Europe. In the USA, autonomous driving is mainly being rolled out in robotaxis and robotrucks. Autonomous flying is also becoming increasingly interesting, especially for the transport of goods between airports and logistics warehouses.

When will autonomous driving reach the masses?

Jürgen Maier: We assume that it will take at least another 3-5 years. The Google subsidiary Waymo is the furthest ahead. It is the first company in the world to bring robotaxis to market maturity. The company started driving in Phoenix in 2020. The completely driverless robotaxi service now covers large parts of Phoenix, San Francisco, and Los Angeles. The company has already completed more than 20 million miles of real journeys and over 20 billion test miles.

From an investment perspective, the software and package solutions in this area are of particular interest to us. Sooner or later, companies like Waymo will licence their software solutions and sell them on to other international car companies. Hardware production is now far less relevant for investors.

Austria seems to be a nation of combustion engines. Will e-mobility, hydrogen, etc. play an even more important role in transport in the future than they have so far? In your opinion, when will our transport system function with low emissions?

Harald Frey: Electromobility has the advantage of being three times more energy-efficient if the electricity does not come from fossil fuels. From a global perspective, there is already major investment in electromobility and rail. However, it will take decades for different drive technologies to co-exist. Electromobility will gradually become established, even if there are still challenges such as range and weight.

Hydrogen will also play a role, albeit in a niche. It has the advantage of storage capacity, but the conversion process is complex. Ultimately, it depends on who benefits from the technologies and what social goals we pursue. The dark side of every technology is just as big as the bright side.

What contribution does autonomous driving make to the mobility transition?

Harald Frey: There are enough studies that indicate that autonomous driving could lead to more traffic, including increased empty journeys and a lower occupancy rate. It is also likely that the convenience of autonomous driving will tempt people to live further away, which will further increase traffic. Energy consumption will also increase, both due to the vehicles themselves and the necessary data traffic and infrastructurerequired for this. Server farms and data centres, which are necessary for processing and transmitting the data, also contribute to increased energy consumption. Overall, the energy efficiency of the system therefore looks miserable and works against the goals of sustainability. Autonomous driving sounds good and it fascinates us because it's a new technology and we like to try it out. But the planet is relatively uninterested in this, it looks at other things, namely resource and energy consumption. And we need to reduce these in the future if we want to achieve other goals, other Sustainable Development Goals.

Mr Prutej, you probably see things from a different perspective?

Walter Prutej: Sustainability and innovative, visionary approaches are important. We should allow and try out more in mobility. It's about jobs and value creation, and it would be nice if more were made in Austria. It is also important to test, test, test - data creates knowledge! Automated mobility can support public transport, especially in the first and last mile. Hamburg is planning around 10,000 automated vehicles by 2030 in order to reduce the number of private cars by around 200,000. Such visions should also be pursued in Austria. The mobility of the future must be safe and affordable. It will be a few years before the technology is robust enough, but we need to create the framework conditions now. Germany has a Level 4 law, and Switzerland and France are also on board. We believe that from 2027 the first automated vehicles will be part of everyday life in Austria and from 2030 they will be seen more frequently. It is important that these developments are linked to regional value creation in order to create future jobs in Austria. This market currently has a global size of around 40 billion euros and an annual growth rate of over 20%. The USA is in the lead, closely followed by China.

What role does sustainable mobility play as an economic factor? The VCÖ recently published a report on this.

Michael Schwendinger:Sustainable mobility is often discussed as a climate issue, but it also has economic benefits. We are the world's fourth largest exporter of rail vehicles behind Germany, China, and the USA, with a value added of 2.7 billion euros and 30,000 jobs in the rail industry.

There is also great added value in the cycling sector, around 2.9 billion euros, including cycle tourism. Companies like Woom are successful, and the cycling industry secures around 30,000 jobs. Walking is also good for business, as it increases footfall and therefore retail sales. In total, there are over 200,000 jobs that are secured through sustainable mobility. It would make sense to further expand these benefits. A clear commitment to the expansion of public transport is important, as is mobility management in companies. We could certainly gain a lot from an objective discussion on transport issues and a bold transport policy.