Market Insight

Alphabet’s Sidewalk Labs to shake the smart city market

October 24, 2017  | Subscribers Only

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Alphabet’s Sidewalk Labs (Sidewalk) and Waterfront Toronto announced plans for the creation of Sidewalk Toronto, an ambitious smart city development plan in Toronto’s Eastern Waterfront. Sidewalk Toronto will be a testbed for the deployment of digital technology along with innovative urban planning adapted around peoples’ needs with goals in sustainability, affordability, new mobility, and economic growth.

The project will start with the creation of a testbed neighbourhood at Quayside and will eventually scale up to the rest of the Eastern Waterfront.

Sidewalk Lab will invest $50 million in the first phase of the project including the planning and the testing of pilot solutions. The testing in Quayside will be expanded in the Port Lands, a mostly publicly-owned area of some 325 hectares which is currently one of the largest underdeveloped urban areas in North America. This area also counts on a $1.25 billion CAD financing by the federal, provincial, and municipal governments to provide critical infrastructure supporting the revitalization of the area.

Work in the first year, starting from November 2017 will focus on community engagement, consultation, and long term planning with the goals of improving critical infrastructure (e.g. transportation), finding new housing models, and bringing regulatory clarity on data policy and privacy. These consultations will result in a masterplan to be approved by both Sidewalk and the Board of Directors of Waterfront Toronto which will be used for the Quayside deployments and any other deployments in the Eastern Waterfront.

The redeveloped Eastern Waterfront will become a global hub for smart city-related innovations also leveraging and fostering the city’s existing tech scene. To kick start the revitalisation, Alphabet plans to move Google’s Canadian headquarter to the Eastern Waterfront. This move shows the importance of smart cities as drivers of economic growth as thanks to the relocation Toronto and the Waterfront will benefit from an important source of revenues and economic vitality.

Our analysis

In October 2017, Sidewalk won a request for proposal (RFP) issued by the city of Toronto in March 2017. Sidewalk is Alphabet’s arm created to explore and develop solutions leveraging new technologies to tackle urban problems. Sidewalk has already been active in smart city projects. Within Sidewalk, Intersection is responsible for Link NYC, a project consisting of free public Wi-Fi network and kiosks bringing ultrafast connectivity to the city of New York since January 2016 and with more than 1,100 active kiosks at the time of writing. The project was also replicated in the UK (InLinkUK) with the first kiosks launched in June 2017. Flow and Cityblock are other companies which are part of Sidewalk’s portfolio; they are active in the mobility and healthcare sectors respectively.

The smart city market is at a crucial stage; as of the third quarter of 2017, more than 70% of all projects tracked within IHS Markit Smart Cities Project Database are trials or partial city roll-out. While there are still many pilots, the market starts to demand for results and success stories, and Sidewalk Toronto could deliver those successes.


Project details

Sidewalk will deploy many applications including among others climate-positive energy systems, self-driving transport, and mixed-used buildings.

The project is based on the integration of the digital and physical layers, along with a third layer “standard layer” thought to ease the creation of further innovation. By integrating the digital and physical layers, data and insight can be generated through sensors to better manage and use the physical assets.

The digital layer is set to have four essential parts:

  • A distributed network of sensors collecting real-time data from thermostat to cameras.
  • A map collecting location-based information about infrastructure, buildings, and other assets such as cars.
  • An account-based component where citizens can access public and private services.
  • A model component, which is a software able to simulate potential scenario and thus helping authorities with long term planning.

The physical layer includes the core city’s infrastructure such as utility channels for wires, water, and waste, a street grid, parks, and other similar assets.

The physical layer includes four main parts:

  • Flexible buildings.
  • Mobility (People-first streets).
  • Adaptable public spaces.
  • Open utility infrastructure.

The standard layer defines the rules and needs for anyone to build and innovate on top of the platform created by the digital and physical layer.

Deployed applications will include a smart disposal project comprising a smart chute, pay-as-you-throw, and autonomous transport waste to reduce landfill waste. Mixed-use spaces will be a feature of the area, with Sidewalk planning to use a modular approach to resize and shape the buildings according to different needs. Sidewalk will deliver modular buildings using advanced manufacturing to reduce costs and will use sensors to monitor metrics such as noise and pollution. Buildings will be equipped with advanced demand management systems to reduce energy consumption as well as other features such as the “passive house” standard to increase climate-related benefits. A micro-grid will also help with onsite generation, storage, and inter-building energy exchange; the area will also count on a thermal grid. Alternative housing models will also leverage the digital layer to ease the life of the citizens; furthermore, amenities and additional services could be included in the rental costs.

Sidewalk wants to take into account the future needs of the city deploying a more adaptable and open physical layer. For instance, utility networks will not be buried under the roads but will be deployed in a more accessible way, thus reducing the cost of future works. The underground infrastructure will host electrical infrastructure, water pipes, district level heating and cooling infrastructure, and telecommunications infrastructure. With delivery a key part of city’s economic life and traffic, Sidewalk plans to create an urban freight transit system with robots making deliveries using utility channels.

In the mobility field, innovations will include bike share, ride share, a self-driving shuttle (followed by taxibots), self-driving cars, intelligent traffic lights, intelligent transport system, smart parking, and a mobility-as-a-service platform to help users taking advantage of all possible mobility options. Self-driving cars are set to bring a more adaptable and de-centralised mobility system representing a better fit for citizens. With no need for parking spots or separation lines further space can be opened for walking and cycling. The mobility and the public space are thought to prioritise pedestrians.

Public space will be made more attractive all year round, for instance, piloting heated bike and pedestrian paths to melt the snow. In Quayside, Sidewalk will test a neighbourhood assistant tool to foster citizens’ interaction and participation. Connectivity will be ubiquitous through wired technologies, fibre and copper, high bandwidth wireless via Wi-Fi, cellular, and LPWAN. This approach shows the need for multiple co-existing technologies to create a smart city.

The entrance of Alphabet in the smart city game

This is a long term project that will take few years to be completed; while the projects’ results will not be available in the next couple of years, Sidewalk Toronto holds a massive importance as this is Sidewalk largest project to date. Alphabet is fully entering the smart city market developing this concept in its own unique way. Quayside and the larger Sidewalk Toronto can be a success story showing how new innovative technologies can be used to create smart cities which are sustainable and people-centred. Success will be measured across 25 metrics including: cost of living (with 11 subsets around rent, transportation, and more), carbon emissions, walkability, park access, job growth, civic participation, and time saved commuting. Sidewalk understands that while technology is the enabler of a smart city, results go beyond technology in the socio-cultural sphere.

Alphabet has been already active in different smart city and connectivity projects across different applications, from laying down fibre to the home in multiple cities in the United States including Charlotte, Austin, and Salt Lake City, to deploying Wi-Fi kiosks in New York and London, and to testing self-driving cars (Waymo). In Toronto, the company is taking a smart approach owning one of the lessons emerging from the smart city market, which is the need to include different stakeholders and the need to involve the community including people, companies, start-ups, academic institutions, and local organizations.

Sidewalk Toronto is an ambitious initiative and could be a true success story for Toronto and for Alphabet. However, challenges lay ahead. Sidewalk will start deploying in a limited area to test technology and solutions in a move that shows that results need to be provided before working on a larger roll out. There are many challenges for such a large-scale project from ensuring all stakeholders are ready to collaborate and have shared goals, to the ever-present financial dilemma, and the need for updated regulation allowing for some of the proposed innovation.

With Quayside, Sidewalk wants to create a success story not only for Toronto, but for other cities around the world as the company is not targeting an isolated city but has its sight on the whole smart city market. The City’s data and the tracking metrics to be used to measure the success of the project will be essential to showcase the importance of this project in delivering results and consequently in placing Sidewalk as a leading player in the smart city market.

Overall, Sidewalk approaches this project in a twofold manner. The company wants to integrate the human and technology elements. This can be observed in the mobility sphere, where from one side the company wants to put pedestrian mobility at the core of the project but from the other it is ready to deploy autonomous vehicles for both human and parcel transportation. The planned taxibot system will bridge the gap between the traditional private mode of transport and the commodity of public transportation. Furthermore, the company incorporates into its project topics such as policies and privacy regulations, housing and affordability, and the use of social spaces as it understands that the future of smart cities goes well beyond technology.

While certain elements of the project such as smart waste (e.g. pay-as-you-throw in Singapore) and smart building (e.g. Aspern district in Wien, Austria) have already been deployed and tested in other cities, certain mobility solutions (e.g. autonomous vehicles) are innovative and have not been deployed at scale. With an ambitious project incorporating self-driving cars, taxibots, and self-driving parcel-delivery “cars” it is not guaranteed that all these technologies will be successfully implemented at scale. Failing to deliver on these deployments will result in a project with mixed results for Sidewalk.

This project is also unique as the Toronto Eastern Waterfront is practically a Greenfield and this means that Sidewalk can deploy projects and innovation that could not be deployed in other cities. For instance, using utility tunnels for parcel deliveries is something that could not be replicated in most cities.

While Sidewalk Toronto aims high with multiple solutions and technologies it would be reductive to imagine such a project isolated from the wider company’s needs and plans. With connectivity the centre of public and private life, Alphabet is future proofing opportunities for its core business. Increasing amount of data from multiple sources such as sensors and devices will help the company optimising its other services and increasing its understanding of consumers. Adjacent opportunities within this setting could be related with its advertising segment as well as payments, and voice assistant.

What this development means for the market


For further information about the smart city market, IHS Markit intelligence Services, and IHS Markit consulting please contact Pablo Tomasi, Senior Analyst Smart Cities and IoT, at

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