Smart Cities and Mobility: What Are The Main Challenges?

By Fernando Leira Cortel Published on Sep. 24, 2019

Cities around the globe are growing at a rate that no one could have ever predicted in the past. With many opportunities available, people are now incentivized to relocate to urban areas in the search to improve their quality of life. 

However, with increasing urbanization, cities will start to face significant challenges in the future, including the need for more infrastructure, the improvement of health services and the management of energy resources. This poses the question: How will the cities of the future solve these types of difficulties using new technologies, in particular in the mobility field?

The development of Information and Communication Technologies (ICT's) has allowed traditional cities to promote new initiatives in order to solve many of these issues. This is how the concept of "Smart City" was born. The Smart Cities initiative aims to mitigate problems by implementing new technologies to deal with fields like optimizing living spaces, reducing pollution and managing energy consumption. In addition, more factors involved in the immersion of Smart Cities are the emerging trends of automation, machine learning, and Internet of Things devices, which have increased to 50 billion devices since its inception in 2009.

One of the key areas in the development of Smart Cities is transportation, which many refer to as "Smart Mobility.” The most common problem for commuters is the large traffic congestion during their morning commute. The U.S. loses $120 billion dollars every year due to these congestions, according to INRIX. With new solutions, transportation will start becoming more efficient in urban areas, allowing its citizens and governments to save more resources and decrease environmental impact. Public entities, large corporations and smart cities startups, all of them are suggesting their own solutions to improve mobility in smart cities.

In this article, we're going to analyze the role that smart mobility is playing in cities. 

Mobility in Smart Cities: Market Numbers

market numbers smart city

The Smart City market has become one of the fastest growing industries in recent years. The Smart City global market will be worth $2.57 trillion dollars by 2023 with the US market expected to grow to $1 trillion. In addition, the current global spending for new initiatives is 80 million dollars, with forecasts expecting it to grow to $158 billion by 2022.

The main reason for the development is the ever-growing urbanization in city spaces, which is expected to host 70% of the total world's population by 2050. Additionally, the world population continues to achieve increased life expectancy. 617.1 million of the world’s population is above the age of 65, and there is a projected increase of this statistic to 1.6 billion from 2035 to 2050. Keeping the increasing population age in mind, Smart Cities will need to aim for the creation of an environment where their needs can be fulfilled.

There are a few factors that are detrimental to have an impact by slowing the development of Smart Cities. Low levels of operational efficiency and awareness of maintenance costs are the main reasons why organizations cancel new initiatives. Other reasons include the absence of public knowledge of new technologies, such as autonomous driving, where a recent survey showed that 30% of all participants have no knowledge of AV development, regardless of the technology exponential growth

Global Presence

singapore global presence

Asia is currently experiencing the fastest growing expansion in the industry. According to McKinsey, regions in South Asia are spending heavily on new smart solutions to respond to the dense growth in their urban areas. South Asia alone is investing over $60 billion dollars in global initiatives.  These changes have placed eight Asian cities in the top 20 Smart City index published by Juniper Research, with Singapore ranking first in 2017

Similarly, the European Innovation partnership is aiming to create a new system to improve their metropolitan areas. One of the main goals is the reduction of energy consumption, which is projecting a reduction of gas emissions of 40% by 2020. There are many cases of Smart Cities initiatives across Europe, particularly in Barcelona, London, and Frankfurt.

North America continues to display many trends of Smart Cities initiatives over the years as well. The key reason for this increase in the US is the program launched by the Department of Transportation called "Smart Cities Challenge," where several cities compete for the best initiatives. For example, New York city recently started the project, Home-Stat, which aims to decrease the number of homeless through innovative solutions. With the expansion in market size, projections in the US seem very promising for the development of Smart Cities.

Smart Mobility

smart mobility

In the Mobility space, there are many initiatives shaping the way people move around the city. Transportation is one of the roots of everyone’s daily routine. Due to the growth of Smart Mobility, multiple organizations are starting to invest in the industry. For example, the World Bank Group, has invested around $25 billion dollars in 297 urban transportation projects. 

This enthusiasm for the improvement of Transportation can be applied to its width in terms of the solutions and the certainty that the primary beneficiaries will be the consumers. However, some urban planners are researching how expanding Smart Mobility will help advance public policy goals, such in reducing traffic congestion and encouraging higher productivity. In this case, we can explore many concepts of Smart Mobility where new projects could really make a change in the way people move around the city and startups that are working on them.

Ride Sharing

via ride share


The most famous initiative is ride sharing. Companies like Uber and Lyft have introduced this model of shared mobility, and made it more accessible and easier than ever. With better ride-sharing services, people can save money in their commutes without having to deal with high fixed costs, as well as time with the ability to use the HOV road lanes. Moreover, there is an estimation of $4.3 billion dollars in savings annually from ride-sharing services. In turn, there will be less cars in the road, causing car emissions to decrease, resulting in improving the quality of the environment.

Via provides shared rides for an affordable flat rate. Operating in NYC, D.C., and Chicago, Via is changing the way people move around cities.

Dynamic Routing

loup app


Another field would be the ability to create a new dynamic routing system. Over the last decade, the fastest growing type of Mobility services has been on-demand transportation. Similar to this, we can promote the same kind of application for routes in public shuttles, which will be determined by each users’ needs. By creating a flexible dynamic system based on demands, governments will have more control on the road and improve the environment. Moreover, this is a great way to promote the use of public transportation.

Loup is an optimized circular path planner between neighborhoods where we have designated pick-up/drop-off spots (Similar to a bus route).


parking smart cities


One of the most common problems with transportation in urban areas is the ability to park vehicles. New parking services come with an increase in revenue for local governments since the system will become more practical. One example can be founded in the city of Luxemburg, which recently replace their parking management system and gave its citizens more accessible services. Not only that, but also recent studies have proven that better parking increases tourism in cities.

JustPark is The Parking App reinventing parking for the digital era. Parking has been difficult for too long, and we’re on a mission to make it easy.

EV Charging

ev charging


With the growth of electric cars, cities will need to start building better or smarter infrastructure for the electric charging of these vehicles. If residents can save more money by not having to deal with the fees for charging their cars at home, it would provide additional incentive to opt for an electric vehicle. Another point for the expansion is to solve the oil problem. This development will allow cities to increase promotion for the use of electric vehicles which at the same time it will decrease the use of gasoline.

Evercharge provides electric vehicle charging services to EV owners in multi-unit residences, providing a mechanism to reimburse management for common area electricity usage as well as power-management technology that allows vehicles to take turn charging so that many more vehicles can charge off of existing electrical infrastructure.

Traffic Management

traffic management

The inclusion of new approaches for traffic management in cities provide additional opportunities to decrease congestion and prioritize public transportation. Last year, Amsterdam implemented a “virtual traffic management” system which has helped optimize the traffic flow within the region. Similarly, a better general traffic management system is the most efficient to solve problems such as pollution, response to incidents, and inbound flow control. 

Connected Signals, an innovative startup in the connected car space that delivers real-time, predictive traffic signal data. Their engineers have developed sophisticated techniques to predict upcoming signal states. Knowing the current state of traffic lights and how they will change creates opportunities to increase driving safety, increase fuel efficiency, and improve the driving experience. 

Big Data Analytics

big data analytics


Finally, the last concept in Smart Mobility is the use of big data analytics. With the immersion of new IoT devices there has been an increase of size in collected data. This case can be applied to multiple areas with many different purposes. For example, it can be used for predictions in areas with a large population density. In the case of transportation, the most common applications with large data are collaborative and sharing platforms, which allow for a better efficiency and control in the use of the city’s resources. 

Xapix is a software that lets businesses create simple, modern, and easy-to-integrate connections between existing and new systems in the form of APIs. Their service is significantly faster, more flexible, and more powerful than traditional approaches to data transformation, normalization, and integration, using the power of automation so that businesses can collaborate with hundreds of partners instead of only a few.


This is just the beginning of the Smart Cities initiative. With the ongoing expansion of urban areas, new challenges will need to be solved: sufficient fresh water, universal access to cleaner energy, the ability to travel efficiently from one point to another, sense of safety and security. These are the kinds of promises modern cities must fulfil if they are to stay competitive and provide a decent quality of life to their citizens. Likewise, this development of Smart Cities has to go on a global scale.

Forward thinking is key for the implementation of solutions that help us build successful, effective and sustainable smart cities. Each citizen must be a proactive player, accepting the limitations in their own transportation freedom (e.g., reducing the use of private cars) and embrace the pursuit of shared and efficient objectives, especially as Smart Mobility begins to grow.

At Plug and Play's Smart Cities accelerator we are in touch with corporations and startups that are changing the world as we know it. Join our platform today.

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