Designing Charging Ecosystems for e-Taxis in City Centers

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Paris (2021)

Résumé:

 

There is a big debate about sustainability in mobility (e.g., EU, 2021). In the Europe Union, motorized private transport accounts for around 11 percent of greenhouse gas emissions (EU, 2019: 127-139). An important measure for the sustainable design of mobility in the context of a fundamental mobility turnaround (UBA, 2020) is therefore to increase the share of vehicles with alternative drives, especially in city centres (Hickman/Banister, 2019: 29) and, due to the high daily mileage, the taxi industry (Hagman/Langbroek, 2019). However, there is a lack of concrete plans for the electrification of taxi fleets, because despite political incentives, restrictive legislation and subsidies (Bischoff et al., 2017), the challenges of high acquisition costs and long charging times of electric vehicles in continuous operation have not yet been solved and profitability is lacking. Currently, the use of electric taxis takes place almost exclusively in pilot projects. (cf. e.g. Hampel, 2019). In order to be able to offer the electric taxi use on a profitable level, relevant actors (Bojkovic et al., 2010: 1177) such as vehicle manufacturers, providers and operators of a charging hub for taxis, investors, political representatives and taxi drivers as potential customers of the vehicles (Macharis, 2008: 185) would have to firmly join into a partner network, e.g. via a "technology platform" (Dattée et al., 2018: 466), in order to create joint added value in a partner network, a "sustainable electric taxi ecosystem". Reality shows that many partner networks do not emerge from an initial concept or design phase and does not become economically viable (see on the example of renewable energy subsidies, Bruns et al., 2009). The development of such structural ecosystems (e.g., Adner 2017) is a relative new research branch in business administration (Wang/Miller, 2020). The "chicken and egg" problem can be seen as the central issue: "how does one per-suades someone to commit first, and evolve a collective framework of participation" (Dattée et al., 2018: 467).
The problem is particularly difficult in "innovation ecosystems" for the joint development of "generative technological innovations" such as autonomous driving (ibid.:466). However, it also exists comparably in a (mobility) ecosystem in which a market is to be jointly processed and expanded in a value-added manner (related to Varian, 2014 and Dyer et al., 2018). In contrast to innovation ecosystems, the complementary value proposition can be estimated ex ante in a "market creation ecosystem" and an appropriate "ecosystem design" - this means a compelling “blueprint” (Dattée 2018: 466) - can be developed. This blueprint lowers uncertainty about future development and must subsequently be improved in an alignment phase over several loops within the "minimally viable ecosystems". Therefore, the research questions in this paper are as follows:
How does the blueprint of a market-creating ecosystem emerge?  
Which decisions need to be made in the design phase of an ecosystem to successfully launch into the alignment phase?

Texte complet:

There is a big debate about sustainability in mobility (e.g., EU, 2021). In the Europe Union, motorized private transport accounts for around 11 percent of greenhouse gas emissions (EU, 2019: 127-139). An important measure for the sustainable design of mobility in the context of a fundamental mobility turnaround (UBA, 2020) is therefore to increase the share of vehicles with alternative drives, especially in city centres (Hickman/Banister, 2019: 29) and, due to the high daily mileage, the taxi industry (Hagman/Langbroek, 2019). However, there is a lack of concrete plans for the electrification of taxi fleets, because despite political incentives, restrictive legislation and subsidies (Bischoff et al., 2017), the challenges of high acquisition costs and long charging times of electric vehicles in continuous operation have not yet been solved and profitability is lacking. Currently, the use of electric taxis takes place almost exclusively in pilot projects. (cf. e.g. Hampel, 2019). In order to be able to offer the electric taxi use on a profitable level, relevant actors (Bojkovic et al., 2010: 1177) such as vehicle manufacturers, providers and operators of a charging hub for taxis, investors, political representatives and taxi drivers as potential customers of the vehicles (Macharis, 2008: 185) would have to firmly join into a partner network, e.g. via a "technology platform" (Dattée et al., 2018: 466), in order to create joint added value in a partner network, a "sustainable electric taxi ecosystem". Reality shows that many partner networks do not emerge from an initial concept or design phase and does not become economically viable (see on the example of renewable energy subsidies, Bruns et al., 2009). The development of such structural ecosystems (e.g., Adner 2017) is a relative new research branch in business administration (Wang/Miller, 2020). The "chicken and egg" problem can be seen as the central issue: "how does one per-suades someone to commit first, and evolve a collective framework of participation" (Dattée et al., 2018: 467).
The problem is particularly difficult in "innovation ecosystems" for the joint development of "generative technological innovations" such as autonomous driving (ibid.:466). However, it also exists comparably in a (mobility) ecosystem in which a market is to be jointly processed and expanded in a value-added manner (related to Varian, 2014 and Dyer et al., 2018). In contrast to innovation ecosystems, the complementary value proposition can be estimated ex ante in a "market creation ecosystem" and an appropriate "ecosystem design" - this means a compelling “blueprint” (Dattée 2018: 466) - can be developed. This blueprint lowers uncertainty about future development and must subsequently be improved in an alignment phase over several loops within the "minimally viable ecosystems". Therefore, the research questions in this paper are as follows:
How does the blueprint of a market-creating ecosystem emerge?  
Which decisions need to be made in the design phase of an ecosystem to successfully launch into the alignment phase?
Design
To answer the research question, the design of a "sustainable electric taxi ecosystem" will be investigated with the help of a single case study (Eisenhardt/Graebner, 2007) from the project TALAKO (Taxi charging concepts for public spaces) in Germany, which is funded by the Federal Ministry of Foreign Affairs and Energy (BMWi). According to Eisenhardt/Graebner (2007). In order to investigate theory development around significant phenomena in rare circumstances. individual cases also provide an opportunity for building and confirmation of theory (cf. Eisenhardt/Graebner, 2007).
The authors of the paper are the coordinators of the TALAKO project. Thus, they have the role of a "keystone" (Iansiti/Levien, 2004). Related to Adner (2017), they first align a defined set of partners (in a first phase) in multilateral interactions towards an overarching value proposition. Thus, a profitable or at least a future profit promising "structural ecosystem" is targeted (see similarly Jacobides et al., 2018). On this basis, the "alignment" can subsequently be improved in a second phase (cf. Kapoor, 2018). The conceptual framework of the study is shown in Fig. 1 mainly related to Dattée at al. (2018). It is important to 1. start with the customer benefit and define a common overarching value proposition that generates revenues. At the same time, 2. complementary partners must be found with whom a cost-minimizing value architecture is possible in order to achieve 3. joint value creation (cf. Gans/Ryall, 2017), which enables a profitable profit model (cf. Fig. 1).

Fig. 1: Development of a “market creation ecosystems”

Findings
The TALAKO project started in October 2019, primarily in Cologne, Germany, with the goal of electrifying taxi fleets by establishing an inductive charging option at the taxi rank. The overarching value proposition of this "sustainable electric taxi ecosystem" is to avoid greenhouse gas emissions in city centers by using of locally emission-free vehicles. However, electric taxis will only become established when their use is economically viable. Currently, they appear to be unfavorable compared to conventionally powered vehicles in terms of their initial cost, limited range, and long charging times (Scorrano et al., 2020).
Therefore, the "keystone" tries to find complementary partners  to create a positive profit model regarding to a positive TCO (total cost of ownership), which is facilitated not only by government subsidies, but also by the fact that, despite the high fixed acquisition costs, the variable costs of operating electric taxis are lower than those of taxis with internal combustion engines. The complementary partners (as the basis of the value architecture) of the "sustainable electric taxi ecosystem" include the ecosystem leader/platform operator as the "keystone" (Iasanti/Levien, 2004) as well as the other "core partners" of the ecosystem (Senn, 2020) with the "first actor" (state), which initiates the ecosystem through fundings and regulations, the "value actors" (vehicle manufacturers, energy providers, charge point operators, charging infrastructure developers) and the "affiliated actors" (taxi companies/drivers and the passengers) as well as adjacent actors.
The profit model results mostly from the decisions about the value proposition and the value architecture (see Fig. 2). Additional revenue is generated if the taxi customers are willing to pay a surcharge for the value proposition of avoiding emissions in city centers. A survey conducted to the TALAKO project among 242 taxi customers in major German cities showed that they were willing to pay a surcharge of 5.89 percent per kilometer for a ride in an electric taxi compared to an internal combustion engine vehicle. In the TALAKO project, it was possible to increase government subsidies for electric taxis, persuade manufacturers to discount the price of electric vehicles, and get energy suppliers to subsidize the electricity in the initial period. Thus, the "sustainable electric taxi ecosystem" is slowly getting a positive continuation forecast as a prerequisite for moving into the alignment phase. Later economies of scale in the course of cost reductions through learning curve processes can be assumed. (Nykvist/Nilsson, 2015)

Fig. 2: Design of a “sustainable eclectric taxi ecosystem”
Practical and theoretical implications
The submission contributes to research on the design of structural "market creation ecosystems", which are often neglected by the discussion of "innovation ecosystems". Based on a concrete case study of a "sustainable electric taxi ecosystem", a blueprint is developed in the qualitative study, which can be transferred to other use cases. It offers starting points for further research on the design of ecosystems and points out some interesting aspects for the alignment phase, in which a "mimimum viable ecosystem" can be developed and improved continuously. Thus, the research questions within the submitted contribution are answered comprehensively. Practical implications should help companies to understand more precisely the decisions in the development of market creation ecosystems. The number of those ecosystems guided by companies is growing (think, for example, of the new mobility ecosystems that want to offer mobility-as-a-service solutions and in which electric taxis can participate). The results of the study should help them to assess whether participation in an ecosystem is worthwhile (i.e., in this case, first of all, whether a shared value can be created).
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