Transportation Transformation: How the DOT Is Driving “Smart” Change

Last March, during the South by Southwest festival, U.S. Transportation Secretary Anthony Foxx announced the seven city finalists for a single $40 million grant as part of the Smart City Challenge, aimed at transforming mobility in the winning city. The grant will be supplemented with $10 million from Vulcan philanthropy focused on electric vehicles, and an additional $10 million from other strategic partners, bringing the total opportunity to nearly $60 million. Rocky Mountain Institute (RMI) has been working with two of the finalists—Austin, Texas, and Denver, Colorado—on enhancing their mobility systems through market-based approaches. Now RMI is collaborating with them on their final grant proposals.

Our mobility work in those cities is happening while city governments across the United States are confronting major mobility challenges—and opportunities. The composition of U.S. cities is changing rapidly, with people moving to them at unprecedented rates. In fact, the U.S. population is projected to grow by more than 70 million in the next three decades, and this population surge will be concentrated largely in major metropolitan areas. More people mean more strain on the infrastructure that helps us get from A to B.

While it’s easy to think of transportation solely as a means of travel, we must not forget that transportation allows us access to the most important aspects of our lives—employment, education, health services, family and friends. And, although urbanization brings many positive developments, the average American loses scores of hours waiting in traffic each year and incurs more transportation-related expenses than any other except for housing.

Climate change is also heavily exacerbated by our transport-related habits. Cities contribute 67 percent of all the greenhouse gases released into the atmosphere. The transportation sector is the second-biggest source of greenhouse gases, with personal mobility responsible for 15 percent of U.S. emissions.


Fortunately, as aggressive urbanization continues to sweep America, clear opportunities exist for cities to defeat traffic, pollution, and transport inefficiencies. Thanks to the emergence of big data, digital platforms, automated technology, and cleaner energy options, a huge potential exists to create a more connected, cleaner, safer, more efficient mobility system—a so-called “smart city.”

The federal government recognizes this critical opportunity. Beyond Traffic, a 2015 report issued by the United States Department of Transportation (DOT), details how economic, technological, and climatic change will impact how we move around, and challenges cities to think differently about how people and goods can travel more efficiently and more economically.

In response to trends identified in Beyond Traffic, the DOT launched the Smart City Challenge, which dared visionary cities to both imagine and architect what their mobility system could be, with the ultimate goal of: “improving surface transportation performance within a city and integrating this approach with other smart city domains such as public safety, public services, and energy.”

By means of the $40 million Smart City Challenge grant, plus an additional $10 million awarded by Paul G. Allen’s Vulcan, Secretary Foxx hopes to see the winning city become the country’s first to fully incorporate self-driving cars, connected vehicles, and smart sensors into existing transit infrastructure. The Vulcan award is intended to cover electric-vehicle integration and additional carbon-reduction approaches. Other partners have also pledged contributions, including Amazon Web Services.

Ultimately, the Smart City Challenge will accelerate the implementation of intelligent transportation systems to reduce congestion, enhance energy efficiency, reduce traffic accidents, and revitalize economies. Intelligent transportation systems enable cities to act as testing labs for new business models like on-demand services; new, cleaner technologies like autonomous vehicles; and advanced transportation applications that integrate payment and allow for seamless multimodal travel. Also, by ensuring connectivity to modern technologies, intelligent transportation systems can widen underserved communities’ connectivity to employment, education, and other essential services, while incentivizing economic investment in such areas. All of these measures serve to make cities more competitive and more attractive. The measures are intended as models to be replicated both nationally and internationally.


Picked from 78 submissions, the Smart City Challenge finalists are Austin, Columbus, Denver, Kansas City, Pittsburgh, Portland, and San Francisco. These are the cities the DOT believes will have the most success in pursuing improved safety, efficiency, and sustainable mobility solutions. The winner, to be announced in June, will be chosen for demonstrating a “think big” approach and for developing a robust road map to mobility transformation in their city, with a particular focus on creating “ladders of opportunity.”

The DOT envisages sweeping benefits throughout the winning city, including “safer transit, enhanced mobility, wider ladders of opportunity, and improved sustainability.” The hope is that smart cities will become the 21st-century model for city management—one that can be applied here in the U.S. and around the world.


But smart cities aren’t simply a question of good governance. While the DOT grant will help to accelerate the much-needed shift to a system that serves our 21st century-mobility needs, other stakeholders, namely the market, must play a critical role, too.

Addressing this need, and building on the belief that a 21st-century system is possible today, in September 2015, RMI teamed up with both the City of Austin and the City of Denver to help usher in the transformation via a market-based approach. Both cities, selected from our very own national search, demonstrate the vision, appetite, and tech savvy to deliver the solutions.

“Austin’s collaboration with RMI isn’t just helping us develop innovative mobility solutions,” says Austin Mayor Steve Adler. “RMI is helping us innovate the way our city imagines the possibilities in the first place, which is absolutely critical as we move from an unworkable status quo toward a future that no American city has yet reached.”

Our market-centric approach is focused on eliminating market barriers and inefficiencies. We do this by convening the key stakeholders, from government to transit agencies to would-be competitors in the private sector. As an independent third party, we can broker relationships among players who have vested interests, effectively aggregating demand across the community to bring costs down and build platforms for connecting supply- and demand-side agents. To this end, we are developing a mobility marketplace platform that would enable the scaling of commuting solutions across Austin and Denver, and then across other U.S. cities.

We are working with universities, technology firms, and transportation network companies to develop pilots and projects. Our work streams cover transit data, commuting solutions, fleet electrification (for example, working to electrify high-mileage fleets such as taxis and transportation network companies, for which electrification already makes economic sense), autonomous vehicles, and development codes and policies.

We are collaborating with each city government on its final proposal for the Smart City Challenge, and look forward to one of them receiving the grant. Both are incredibly worthy candidates with all the necessary attributes to drive a successful transformation across their cities, the U.S., and the globe.

Image courtesy of iStock.