Nearly every Israeli is familiar with the Waze application, which has changed the way we all drive. But the Waze brand only really has a presence in Israel; elsewhere in the world, it has been swallowed up in the company that bought it for $1.1 billion in 2013: Google. Some 70% of all traffic information on the Google Maps app – the largest of its kind globally, of course – is based on Waze technology. So the Waze revolution is changing traffic throughout the world, though mostly under a different name.
- Automakers Have Seen the Future — and It’s in Israel
- After BMW, Israel's Mobileye Poised to Seal Second Self-driving Car Deal
- Israeli VC Remains Bullish, Foreseeing $10b Companies
The success of the Israeli startup is something others are seeking to emulate. And Waze isn’t the only local success story when it comes to transportation. Mobileye, which manufactures safety systems that identify when a vehicle veers from its lane or is getting too close to vehicles or pedestrians, is valued at more than $7.5 billion – despite a rift that has developed between the company and U.S. automaker Tesla, the world’s most prominent developer of driverless cars.
Public transportation app Moovit has amassed 50 million users in 1,200 cities worldwide; these numbers attracted the attention of some of the world’s biggest automakers, and BMW is now an investor in the Nes Tziona-based company. Then there’s the taxi-ordering app Gett (previously known as GetTaxi), which nabbed a $300-million investment from Volkswagen last May.
One of the lesser-known Israeli startups in the field is Hod Hasharon-based Valens, which developed a chip for transferring and processing large quantities of data at high speed in the smart car, and is collaborating with German automaker Daimler. In addition, General Motors has operated an R&D plant in Israel since 2008, and now employs 250 researchers. Daimler is currently opening its own research center here, while Renault is mulling a similar move.
All of these examples, and more, are cited in a comprehensive report prepared by German strategic consulting firm Roland Berger, which was just submitted to the Alternative Fuels Administration in the Prime Minister’s Office. The report’s title, “Israel’s Automotive & Smart Mobility Industry,” belies the ambition behind it: In the coming weeks, the government will be presented with a National Plan for the Development of Smart Transportation, which in the first stage will include the formation of a team headed by PMO Director General Eli Groner and Transportation and Road Safety Ministry Director General Keren Turner and tasked with formulating policy that will turn Israel into a smart transportation superpower.
The team will try to determine the application mechanisms needed to advance the smart transportation plan, whose guidelines have been set down by the Alternative Fuels Administration.
The plan has six key points: allocating physical territory for transportation experimentation; making all government transportation databases accessible to those who wish to develop technological solutions; promoting cooperation between the industry and academia – essentially, creating an Israeli MIT that will bring together departments like geography, engineering, architecture, urban planning with the Office of the Chief Scientist to advance technological ideas in the field of transportation; changing the regulation to make it possible to conduct experiments and development in Israel i.e., for driving without two hands on the wheel; support for new developments and pilot programs; and comprehensive mapping of every road, parking lot, intersection and set of traffic lights in Israel. The plan will evidently call for the abovementioned 250-million-shekel investment initially.
To a large degree, the government was forced to come out with its smart transportation plan after the local high-tech industry made such a splash in the field. But the government’s fashionably late entrance into the game is not a cause for concern. According to the data from Roland Berger, smart transportation is a “disruptive technology” – an industry that creates new markets with its innovative technologies. There is no question that smart transportation technology is going to fundamentally change the business model of every automaker, every public transportation operator and every transportation ministry worldwide.
Wanted: Unconventional thinking
By 2030, income in the field is forecasted to reach between $7.8 trillion to $9.4 trillion, with profits totaling $57.5 billion. This is a huge opportunity because of the tremendous magnitude involved, and because this is disruptive technology. The startup nation on the eastern shores of the Mediterranean has a clear relative advantage when it comes to disruptive technologies that require thinking outside the box.
This sort of thought process covers ideas like traffic lights that change depending on the state of the traffic; buses that skip stops based on the number of people waiting at each one; buses that pick up people from their homes on order; cars that communicate with each other for safety or traffic management purposes; parking garages where the car parks itself; cars that brake independently in order to avoid an accident; and even – though not before 2030, it would seem – a transition to driverless cars.
The world of autonomous vehicles will also be a world of only electric cars, with batteries that charge in mere seconds, and advance payment and ordering systems that will let people order a ride or share a trip for maximum convenience. Forecasting of traffic pressures and passenger loads will be a key part of these advanced transportation systems, as will the development of alternative energy sources.
Traditional automakers are going to be hit by this technological shift. They will see the concept of the car losing its prestige and their brand losing its importance. In the age of the driverless vehicle, many fewer cars will be produced since they will have a much longer lifespan; and fierce price competition can be expected among manufacturers. Ridesharing, currently perceived as a forward-looking industry, could also take a hit in the absence of private cars in which to share rides.
Meanwhile, countries at the forefront of this technological development and who adapt their transportation systems to the required technologies could reap vast benefits.
The Roland Berger report says Israel is at an optimal starting point to profit from the change. It has no automakers that stand to be hurt. At the same time, it is a technology leader in electro-optics, big data and forecasting, and also a leader in the transition to electric vehicles. Israel already has more than 500 startups working in the field. In all, there are about 2,000 entrepreneurs and some 200 research studies focused on areas connected with smart transportation.
Startups need the government
The early success of companies like Waze, Mobileye, GetTaxi and Moovit has stoked excitement and whet the appetite for more of the same. But unlike other fields of technology, in the smart transportation field startups need government assistance – or mainly an assurance that the government won’t get in their way.
Regulation is needed to enable experiments in various types of transportation, to allocate areas for experimentation and make government data on transportation accessible.
Such access would include, for example, making the database of Rav-Kav card users available for public use, including information about where each rider gets on and off a bus, to enable the construction of forecasting models for passenger traffic. It would also include online mapping of all the roads in Israel – down to the level of cracks in the road, which the self-driving car needs to know about in real time. All of this is necessary for the smart transportation revolution to really take off, as is funding from the Israel Innovation Authority to encourage the development of relevant technologies.
To ensure that Israel doesn’t miss out on this massive opportunity, the special team was established to consider how best to implement the smart transportation plan. The fact that the team is situated in the Prime Minister’s Office, under the director of the PMO and with the support of the National Economic Council, shows how much importance the matter has been given.
One can only hope that all the good intentions won’t be squandered by the questionable ability of the government to implement them.