Traffic congestion is one of the most pressing issues that major American cities face today. The U.S. is the most congested country in the world, with drivers spending an average of 41 hours per year in traffic. In cities such as Los Angeles and New York, the numbers are even higher: in LA, drivers spend an average of 102 hours stuck in traffic during peak rush hours, while in New York drivers spend an average of 91 hours per year in traffic. This problem is exacerbated in the U.S. by the high percentage of individual drivers on the road: 88% of America’s daily commuters use private vehicles. Now, private sector companies such as Alibaba, Google, Verizon, Microsoft, and Amazon are harnessing AI and real-time analytics to optimize traffic, emergency vehicle movement, and to connect traffic signals to larger IoT smart city ecosystems.
NewtonX IoT experts formerly with Amazon and other tech giants, as well as former transit officials in major U.S. cities, recently completed a micro-survey on IoT for traffic optimization. The insights and data in this article were derived from this survey, as well as from three qualitative follow-up interviews with senior executives and officials who had unique perspectives on smart traffic optimization.
The insights from this article are sourced from NewtonX surveys, panels, and expert consultations. To gain access to these services visit newtonx.com.
How Smart Traffic Became a $38B Industry
AI-powered smart traffic systems use real-time data to predict traffic flow, detect accidents, alert transit officials of incidents, and give real-time updates to drivers on parking availability. Pilot cities have already seen incredible improvement in congestion from adopting tech giant-powered smart traffic products: Hangzhou dropped from number 5 on China’s worst congested cities list to number 57 after implementing Alibaba’s ET City Brain. In Atlanta, a 2.3-mile smart corridor built by a Pittsburgh-based startup opened in September, and is expected to reduce travel times in the corridor by 25%. Miovision TrafficLink, built on AWS, monitors and manages traffic signals remotely, and claims it solves 10x more traffic problems through real-time data and resource prioritization.
Microsoft, Alibaba, Amazon, Verizon, and numerous other smaller tech startups or niche tech companies all offer various products to improve traffic communication, data processing, and optimization. In fact, Google has even embarked on building an entire “Smart City” in Canada, where traffic signals will auto-calibrate to ease pedestrian and vehicle congestion during rush hour and public events. In response to this, many have asked ‘what do tech giants know about running a city?’
The answer lies not in urban planning, but in data, sensors, processing power, and real-time analytics.
Traffic optimization provides an immense opportunity for tech giants, who can roll out new products to local governments, while also optimizing large-scale IoT infrastructure and development cycles. The IoT market is expected to generate over $350B in revenue by 2020 — meaning that traffic optimization accounts for roughly 9% of the overall market. Providing enterprise-level IoT infrastructure (which is what Amazon and Microsoft are doing) that has a proven track record of optimizing entire cities allows these tech giants to move into diverse industries and IoT applications.
Additionally, many traffic optimization products require consumer participation. For instance, PARK SMART, built on AWS, gives consumers the real-time availability of parking lots in monitored areas through video sensors and rapid processing. By building the infrastructure necessary for smart cities, Amazon also gained consumer IoT customers.
Shrinking Resources and a Growing Tech Sector
Tech-powered optimization is more important than ever, as resources from land, to housing, to water in certain regions are becoming more and more scarce. Alibaba’s head of Technology Steering Committee, who coined the term City Brain, said that the concept behind the connected system is “a matter of sustainability” and “using as little natural resources as possible.”
Indeed, traffic optimization has the potential to reduce fuel consumption and expedite the time that drivers spend on the road, which could reduce greenhouse gasses. Additionally, Alibaba and other tech giants have emphasized that smart cities and smart traffic products could improve time-to-first-response for emergencies, whether that be transporting medicine or water, or getting police to the scene of a crime. In fact, City Brain accelerated emergency response arrival times by 49% by changing traffic lights to allow responders a clear path to their destination.
As more and more cities turn to IoT solutions for congestion, the tech giants, particularly those with a stake in cloud computing, will be involved in numerous stages. From Verizon providing cameras, sensors, and proprietary algorithms to reduce traffic fatalities in Boston, to Google building an entire smart city from the ground up, to AWS providing the computing power necessary for IoT, governments and tech giants are already working harmoniously toward a traffic-free future.