Global Economics

Beijing's Plan to Fight Olympic Traffic


The Games will be a test for Beijing's fudong che, or "floating car" program, which uses taxi GPS data to give drivers the fastest routes

Located in the dashboard of Lu Guanglong's Hyundai Elantra taxi, under the cassette player, is a black global positioning system (GPS) box. The GPS tracks every inch of the taxi driver's daily 125-mile journey through Beijing and transmits the information back to his taxi company. "It can see you. It knows where you are. It knows what you are doing," says Lu, 55.

As the Chinese government readies for next month's Olympics, it is depending on GPS systems like Lu's to avoid gridlock on the capital's roads. When Beijing upgraded its taxi fleet to yellow-striped Hyundai Elantras, Hyundai Sonatas, and FAW-VW Jettas starting in 2004, authorities asked all taxi companies to install GPS systems in the new taxis. Since then, the government has been using GPS systems in Beijing's 66,000 taxis to monitor the city's traffic flow.

It doesn't take a GPS or other newfangled gadget to figure out that Beijing has major congestion problems on its streets. To avoid embarrassing traffic jams during the Games, authorities on July 20 imposed draconian measures restricting the number of cars on the roads during the Olympics. The government also is encouraging people to use public transportation (BusinessWeek, 7/3/08), including two newly opened subway lines.

Cutting Commute Times and Pollution

At the same time, Beijing is also quietly using the Olympics to jump-start a longer-term, high-tech solution for traffic jams: the fudong che or "floating car" program. The program (the name is a reference to taxis roaming around the city) takes real-time traffic data collected from GPS units in taxis, crunches it, then recommends to drivers the quickest route to their destinations.

"If the floating car can provide people with real-time traffic information, it will reduce traffic jams, lower environmental pollution, and conserve energy," says Wang Gang, director of the Beijing Municipal Transportation Information Center (BTIC), the government agency behind the floating car program. If 30% of Beijing's cars used the personal navigation devices (PNDs) receiving real-time traffic data, BTIC estimates average commutes would fall by 16%, to 35 minutes, and carbon dioxide emissions would drop 27%, to 2,750 tons.

For the Olympics, Beijing will outfit 1,000 sedans, taxis, and ambulances with dynamic PNDs that receive real-time traffic information and recommend the fastest routes. Traffic authorities will post real-time traffic conditions on electronic billboards over main avenues and around Olympic venues. Beijing has also been experimenting with sending real-time traffic information via text messages.

Leapfrogging TV Technology

With the floating-car program, Beijing officials say they're becoming global leaders in figuring out ways to use technology to solve urban congestion. For years, cities such as Tokyo, Los Angeles, and London have been using closed-circuit television cameras alongside expressways or sensor loops embedded in roads to manage traffic. But Beijing chose to leapfrog those technologies and develop its own system using taxi GPS data because it not only provides more accurate traffic flows but is also cheaper.

For instance, Japanese government and companies invested more than $9.4 billion to embed sensors under the entire country's road network, says Hiroaki Mizuta, deputy general manager of Hitachi (China) (HIT), which has also been experimenting with its own "e-roader" floating-car project in Beijing. "The traffic information system Japan uses is extremely expensive," he says. "The floating car program can do the same thing at 1/20th of the cost."

There are major risks, though. Other cities such as Athens and Frankfurt have experimented with floating car systems, but the trials have not always been successful. The Japanese city of Nagoya, for instance, pulled the plug on its floating-car experiment in 2005 because there were not enough taxis participating in the program, most taxis were parked when they didn't have passengers, and officials could not agree who would pick up the tab for the GPS data transmission fees.

Nissan Is On Board

However, that has not deterred China from forging ahead with its floating-car program. Xia Shudong, founder and chairman of China TransInfo, a Beijing-based real-time traffic information provider that won a $690,000 contract to build the Olympic Games Traffic GIS Application System, argues that the floating-car system is uniquely suited for China's cities. "In the U.S., with the exception of New York, the taxis do not drive around town. You need to call a taxi for them to pick you up, so the data collected from them are worthless," he says. "In Beijing, you have tens of thousands of taxis covering every corner 24 hours a day, so this technology is most appropriate for China."

Automakers have already started to embrace the program. In June, Nissan (NSANY) and joint-venture partner Dongfeng Motor began installing a smart route-guidance navigation system in 15% of their Teana luxury sedans made for the China market. It marks the first time an automaker in China is putting PNDs into cars before they are sold to customers. "We have already moved from the experimental phase to the commercialization phase," says Shunichi Toyomasu, corporate vice-president, Nissan.

Other Chinese cities are also planning to roll out similar floating-car programs to alleviate their traffic problems. Market research firm In-Stat China forecasts that PND shipments in China will increase 42.5% this year, to 1.5 million units. Beijing-based Uniware, which created the PND software, plans to expand into Shanghai, Shenzhen, and Guangzhou after the Games. "Currently, China's navigation device market is very small. Only 2% to 3% of cars have navigation devices. In Japan, 70% to 80% of the cars have a navigation device," says Bill Wang, general manager of Uniware. "There is a lot of room for growth and it will be in these next few years."


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