Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 915

The Guardian is running a series right now called:  The next 15 megacities . A megacity is typically (but loosely) defined as a city (or metropolitan area) with a population of at least 10 million people. 

By 2035, another 15 cities are expected to become megacities according to the United Nations. Hence the above series. None of these new entrants will be in the Americas. And only one – London – is anticipated to be in the West.

The first city in their series is Baghdad . The second is  Dar es Salaam . And the third, and latest, is Tehran . They are such interesting reads.

I have said this before on the blog, but the pace of growth in many of these cities is astounding. Dar es Salaam – one of the fastest growing cities in the world – is adding about half a million people ever year.

For the full megacities series, click here .

CES is underway right now in Las Vegas. About 200,000 people are in attendance. 

Since tech and mobility are today closely intertwined, the show has become an important platform for the automative industry.

Here is a video showcasing BMW’s new iNext concept (expected by 2021):

[youtube https://www.youtube.com/watch?v=x9-f3cALABk&w=560&h=315]

It is based on level 3 autonomy, which means the car will do mostly everything, but you need to be ready to take over at any time.

The video is interesting because it begins to show you what becomes possible when you no longer need to pay attention to the road. It is a bit like flying (but hopefully more enjoyable). 

And here is a video of Bell’s new urban air taxi, which is called Nexus (expected by the mid-2020s):

[youtube https://www.youtube.com/watch?v=1o4d8N-A1G8&w=560&h=315]

This is the company’s first concept. But they’ve been working with Uber since 2017 to develop a network of flying taxis for cities.

Finally, flying cars.

We used Uber to get pretty much everywhere when we were in Rio de Janeiro. For reasons of convenience, cost, and safety, it just made the most sense. I can tell you that it felt a lot more valuable in place where you don’t speak the language and you’re acutely aware of being in the wrong place at the wrong time.

And since Uber is going public later this year (along with Lyft), it got me thinking about whether or not it is a stock that I would want to own. Are they destined for monopoly profits? Do they have a defensible business model? How powerful are their network effects? Having first-mover advantage doesn’t guarantee anything.

My initial thoughts are that the network effects for their core offering – single rides – don’t feel that strong. Sure you need a critical mass of drivers so you’re not waiting around too long, but at a certain point the response time is likely good enough. Rides are a commodity.

This arguably changes as you get into services like Uber Pool and Uber Commute, because more users on the network in close proximity to you can mean lower costs and higher service levels. But is there any sort of lock-in effect?

Many passengers and drivers seem to “multi-tenant.” In other words, many (or maybe most) people have multiple ridesharing apps installed on their phone and they will switch back and forth when it makes sense to do so. I do that when prices are surging. And drivers appear to be doing the same based on the Uber and Lyft emblems in their cars.

For a long time, Uber was the only show in town here in Toronto. Hailo only lasted about two years or so. But as soon as Lyft entered the market, both companies moved to aggressively discount their rates, and that is still going on to this day. This suggests certain things to me.

Among other things, it is a reminder that the demand for (commoditized) transportation services is highly elastic. We are price sensitive. We will use whatever is cheaper. So one way to win is to obviously create a cost structure advantage. Hence the current autonomous vehicles “arms race.” 

Lyft is also trying to establish itself as a multimodal transportation solution. (When are scooters coming to Toronto?) Perhaps that will make them less of a commodity. But again, how defensible is that approach? I suppose the market will tell us what it thinks later this year.