Internet of Things, Virtual Networks and the Economics of Shared Mobility

Posted: 16 Mar 2018

Date Written: March 16, 2018


Shared mobility may be characterized as an “envelope concept” focusing on innovative transportation services provided by a combination of ICT with infrastructures, transportation systems, operator platforms, and fully automated (driverless) vehicles, based on real time and location data logistic management. From an economic point of view the conceptual differentiation between physical transportation services (e.g. car sharing, bike sharing, ride sharing, ride sourcing/transportation network companies, microtransit, bus on demand services, shared taxis) and complementary virtual networks based on sensor networks, mobile communication, big data analysis and interactive machine-to-machine communication (Internet of Things/IoT) gains importance.

Due to the variety of ICT-based mobility services, the characteristics of complementary virtual net-work logistics also vary, depending on real-time data and geo-positioning, dynamic changes of the state of the devices, relevance of data transmission for many users (e.g. in the context of cloud computing) etc. The analysis of the worldwide standardization efforts by the relevant standard organizations, in particular ITU-T, IETF, and IEEE Computer Society shows that the network logistics of heterogeneous virtual networks are based on common elements of ICT architecture. Based on these standards, the innovation potentials of different virtual networks which are complementary for the heterogeneous shared mobility services can be realized. It is demonstrated that the complexity of virtual networks increases from pure App-based car sharing networks to open data based congestion management and further to highly interactive, driverless vehicles. These heterogeneous physical network services can all be provided on the basis of IP-based virtual networks requiring an innovative combination of (camera-based) sensor networks, mobility and location awareness real-time communication with different traffic quality guarantees within an integrated All-IP communication network. Driverless vehicles require ultra-low latency guarantees for data packet transmission and big data analysis for compressing of camera-based sensor data with strict positioning accuracy.

Prosumer peer-to-peer activities as well as business oriented market activities providing shared mobility can only flourish if all legal entry barriers in the markets for transport services are abolished. Market entry regulations with licenses and public price fixing such as in the German taxi market are in essence establishing cartels. Such market regulation does not only interfere with price competition and market driven entry and exit decisions, but also obstructs the search for new innovative mobility concepts.

However, it is demonstrated that technical regulations in shared mobility focusing on health and safety as well as insurance and consumer protection through adequate laws and technical standards are gaining increasing relevance and make additional rulings necessary. Other issues regarding the interaction of public and private spheres are parking and access to public space both for private businesses and for non-profit purposes with competing operators and transportation services as well as taxation on shared mobility. Data sharing (open data), data privacy protection and cybercrime protection are also gaining relevance.

It is to be expected that ICT-based shared mobility concepts will become a driver for innovative solutions to exploit the comparative advantages of different forms of public and private mobility concepts. Many initiatives pursuing shared mobility are evolving worldwide based on innovative ICT concepts.

Keywords: Internet of things, shared mobility, public transit, driverless vehicles, virtual networks

JEL Classification: L51, L91, L96

Suggested Citation

Knieps, Guenter, Internet of Things, Virtual Networks and the Economics of Shared Mobility (March 16, 2018). Available at SSRN:

Guenter Knieps (Contact Author)

University of Freiburg ( email )

Platz der Alten Synagoge
Freiburg, D-79085

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