A new year finds the transportation industry facing new priorities and new metrics to measure success, writes ROGER LANCTOT.

“Mobility” changed the focus of transportation in 2019.

“Delivery” became the watchword of 2020, thanks to the pandemic, and will remain so in 2021.

This new reality was made abundantly clear during an analyst briefing in early November 2020, when mapping company HERE identified four targeted market sectors for its map offerings: transport and logistics (€11.3B total addressable market [TAM] in 2025); tech, media and telecommunications (€7.3B TAM in 2025); automotive (€3.8B TAM in 2025); and public sector and infrastructure (€1.3B TAM in 2025).* (All TAM – total addressable market – estimates were supplied by HERE.)

Clearly, for map market leader HERE automotive was not its primary objective. Also clear from HERE’s market size estimates: smart cities (public sector and infrastructure) will not pay the piper.

Shifting sectors amid market transformation

While automotive navigation may have brought HERE to the ball decades ago and keeps the lights on to this day, it is clear that transport and logistics (T&L) is the business that now promises the lion’s share of growth. More importantly, the T&L sector promises that most elusive commodity in the mapping sector: profit.

HERE had adopted this T&L messaging as early as 2018, prior to the transformation of the market by the pandemic. Both HERE and archrival TomTom have built solid, but mature, businesses, around automotive navigation – both portable and built-in.

The business is solid because it is reliable and steadily growing. It is mature because the profit margins are narrow and getting leaner.

The onset of the COVID-19 pandemic has introduced an accelerant into the development of the mapping sector putting a priority on location technology and logistics.

Where traffic information once ruled the navigation sector – with HERE and TomTom and INRIX vying for global domination with Waze – route optimization has become the dominant application.

The pandemic simultaneously exposed the vulnerability of supply chains and, with the onset of vaccines, put a premium on distribution logistics. At the same time, everyone from consumers to commercial interests and politicians have developed a need to understand how and where people are moving.

New tasks for networked transport

Networked transportation resources – for people and goods – have been given new tasks. Some are needed to bring goods and services to people, who had been told to remain in their homes. Others are needed to deliver essential workers to business locations and patients to hospitals.

Other emerging players in the mapping space such as Mapbox and RideOS have also recognized the need for mobility and delivery companies to accurately and efficiently route people, packages and pizzas to their correct destinations. Both these companies have significant private valuations having raised hundreds of millions of dollars based on the promise to address this market. (TomTom and HERE are oddly perceived as having less value, relatively speaking, in our upside-down Internet economy where actually having paying customers is perceived as a shortcoming by investors.)

Sadly for HERE, Mapbox, TomTom and RideOS, Google, too, saw the potential emergence of this transport and logistics sector. The company launched its Google Maps Platform for on-demand ride sharing and delivery service providers also in 2018.

HERE launched its own initiative within a new division – HERE Mobility – focusing on people moving and seeking to aggregate taxi operators and multimodal transportation decision-making globally. This Israel-based operation perhaps surprisingly shut down in July 2020. (This group’s failure may have derived from its effort to simultaneously deliver both a B2B AND a B2C solution, directly competing with potential B2B customers. It’s a tale yet to be told.)

The difference between the Google Maps Platform and HERE Mobility was Google’s focus on offering a turnkey solution for networked service delivery operators offering:

• Routes preferred – showing driver’s estimated time of arrival (ETA), expected route, estimated trip price
• Nearby drivers – locating the nearest driver or courier
• In-app navigation – essentially live route optimization and task management
• Trip and order progress – real-time status of pickup and delivery with ETAs
• The navigation battleground of the past was traffic information.
• Predictive traffic information remains the single most important connected car application.
• But Google has quietly changed the foundation of the discussion.

New metrics for the new normal

The new metric intended to separate the leaders from the contenders is ETA. Traffic information remains important, but Google is now building upon its traffic information credibility – established by Google Maps and Waze – by emphasizing ETA.

Where is my product? Where are my drivers? Where am I? When am I going to arrive?

Solving for ETA in the context of a networked, multi-stop, multi-operator, multi-driver environment is the challenge facing hundreds, if not thousands, of start-ups rising to meet pandemic-fueled demand.

For Uber and Lyft, food and package delivery services are being relied on to rescue flagging revenue and profits. It’s an existential crisis for these enterprises. Solving this puzzle, optimizing these operations, is the key to unlocking HERE’s purported €11.3B(US$13.69 billion) TAM.

But it isn’t just package and people delivery. The future of all transportation will revolve around a connected, networked proposition only hinted at within the world of geofenced roboshuttles and the hundreds of robotaxi wannabes.

Google’s Map Platform is pressuring the Ridecells, Vulogs, Invers, Wunder Mobilitys, and Bestmiles of the world to defend their middleware positions in the market. UPS, Fedex, DHL, Amazon and all commercial fleet operators will need to look closely at their logistics strategies. These delivery-centric organizations were caught out with insufficient resources to meet explosive pandemic demand.

This is forcing HERE and TomTom to rethink their go-to-market strategies. HERE claimed a notable end-of-year win when Amazon Web Services chose HERE maps to allow developer partners to add location awareness to their apps. (AWS rival Azure is notably partnered with TomTom.)

Optimizing the routing of networked vehicles to dynamically manage vehicle charging and traffic and pickups and drop-offs and tolls while maintaining accurate ETAs will be the task facing organizations seeking to dominate the transport and logistics sector.

Google is setting a new standard. HERE and TomTom are stirring.

ETA accuracy is the dominant metric of success.

Let the contest begin.

• Lanctot, Director, Strategy Analytics.
• The original version of this article first appeared here. Views expressed in this article do not necessarily reflect those of ITU.