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real estate and jobs to insurance and law enforcement, no digital application
will have more far-reaching consequences than self-driving cars and trucks.
just a few of the implications highlighted in prior Trends issues:
personal cars. Once the cost of the
driver is taken out of the Uber ride-hailing equation, the life-cycle cost of
car ownership will make car ownership far less attractive;
mobility-as-a-service (or MAAS) will dominate and fleets of autonomous cars
will roam cities and suburbs, 24/7, waiting for passenger calls and selecting
passengers based on optimization algorithms.
vehicle life. Over a 10-month
period, a single MAAS car could travel as much as 300,000 miles before being
retired; that still leaves plenty of time for recharging, cleaning, and
fewer cars. One autonomous
car will replace about 30 traditional cars. That could reduce today's 258
million registered cars in the U.S. to less than 10 million.
smaller cars. Over 50% of
driverless cars are expected to be one-or-two passenger vehicles. Why? 76% of
cars on the road now have only one person in them, and one-person vehicles will
be cheaper to operate.
Mobility-as-a-service, will jeopardize 40% of current sales tax revenues.
Today, roughly 40%of state and local sales taxes come from consumer auto sales.
Under the current rules, all cars in a commercial fleet are exempt from sales
will change, forever. There will be a
huge reduction in automobile-related healthcare cost due to accidents. These
could decline by $500 billion per year. And as fleets self-insure, the "Geico
Gecko" will need to find a new job.
retail businesses associated with cars will disappear. As personal ownership of cars begins to
shrink, we will see a rapid decline in gas stations, car washes, oil change
businesses, detail shops, and auto insurance offices. Dealerships themselves
will also disappear. And,
fewer garages. Home and public
garages, like horse stables in NYC, will become relics of the past. Repurposing
these facilities will become big business.
changes may take 15-to-20 years to fully play themselves out. But they are
this list doesn't even consider the enormous economic implications of
self-driving commercial vehicles, like over-the-road freight carriers or local
service and delivery vehicles.
with most game-changing technologies, self-driving automobiles have ridden a
psychological roller-coaster, as hype has met reality. When we started tracking
this technology many years ago, the Trends editors
identified three major hurdles that needed to be overcome: technical performance,
consumer acceptance, and regulatory hurdles.
after more than a decade of serious development, the technical barriers are
coming down rapidly. Consider just one prominent example.
Motors showed off its Cruise AV in January 2019 And, in March, it announced plans
to put these self-driving cars, devoid of steering wheels and pedals into
production in 2019 The car, also known as the Cruise Autonomous Vehicle, is based on the Chevrolet Bolt EV and
production will take place at GM's Orion Township plant in Michigan, the same
plant where the Bolt EV is produced.
plans to start a commercial service for the vehicles next year, where the
public would be able to hail a ride via an app.
roof-mounted modules that contain most of the hardware required for automated
driving, including lidar, radar, and cameras, will be produced at GM's
Brownstown plant. The plant, which is also located in Michigan, is where GM
currently produces batteries and will also produce fuel cell stacks beginning in 2020.
President Dan Ammann said, "We're continuing to make great progress on our plan
to commercialize [the Cruise AV] in 2019 Our Orion and Brownstown teams have
proven experience in building high-quality self-driving test vehicles and
battery packs, so they are well-prepared to produce the Cruise AV."
is yet to announce which location(s) the Cruise AV will be launched in, though
it will likely be somewhere where prototypes are already testing. The list
includes downtown San Francisco, as well as Scottsdale, Arizona and Warren,
Michigan. GM also plans to start testing prototypes in Manhattan soon.
the regulatory front, GM is still waiting on federal approval for use of the
Cruise AV on public streets, which is much harder than for other self-driving
cars because of the lack of a steering wheel and pedals. The Cruise prototypes have circumvented this issue because
they still have steering wheels and pedals.
The automaker will also need to
receive approval at the state level; the current list of states with
regulations that would allow the Cruise AV include Colorado, Georgia, Michigan,
Nevada, North Carolina, Tennessee and Texas.
all go according to plan, the cars will join a ride-sharing fleet either
operated by GM or a partner such as Lyft. GM, last August, announced its own
ride-sharing service called Cruise Anywhere that so far has only been used by
employees at Cruise Automation, the self-driving car development company acquired by GM in 2016 for roughly $1 billion.
the self-driving division of tech giant Alphabet, says it plans to start its
own self-driving service very soon in Phoenix, Arizona. The company fits its self-driving system to
Chrysler Pacifica Hybrid minivans and is testing the technology in 25 cities
across the United States.
GM and Waymo's self-driving cars have Level 4 capability, which means they are restricted to areas
with extensive map data and are also incapable of handling certain weather
conditions, such as heavy snow. The final goal for GM and Waymo is a Level 5
car, which can handle any situation that a human driver is capable of handling.
it looks like UBER is ready to jump on the Waymo bandwagon. Uber CEO Dara
Khosrowshahi recently said, we "welcome Waymo to put cars in our network."
Alluding to an incident in April where one of Uber's self-driving cars was
involved in a fatal crash with a pedestrian, he said, "When we get back on the
[self-driving] road, we have to be absolutely satisfied we're getting back on
the road in the safest manner possible."
also appears that the consumer acceptance barrier for self-driving cars is
rapidly falling. A survey titled, The Road to Autonomous Vehicles - 2018, found that 70 percent of Americans expect that autonomous,
self-driving vehicles will be commonplace in America within the next 15 years.
When asked to identify benefits that automated vehicles will bring, 51 percent
of all respondents identified increased mobility for non-drivers, such as the
elderly or people with disabilities, as the single most important benefit.
Meanwhile, 41 percent of all respondents including 49 percent of millennials
cited reduced accidents and increased safety. 23 percent of all respondents
including 33 percent of millennials also cited improved safety for pedestrians
and bicyclists. Most were apparently unaware of the big cost savings.
bottom line is that self-driving cars and trucks are no longer a matter of "if," but merely "when." Our challenge as consumers, investors and managers is
to be among the winners in this fast-changing game.
this trend, we offer the following forecasts for your consideration.
beginning in 2019 and 2020, companies will invest serious money
in the ramp-up and roll-out of self-driving car services. Apple and Intel have enormous financial
resources ready and able to support their self-driving entries, when and if
they are ready to commercialize. Alphabet is also prepared to tap its huge reserves
to make Waymo a success. And, General Motors' self-driving car business just
received a huge vote of confidence from the SoftBank Vision Fund.
considered the world's biggest tech investor, will inject $2.25 billion into GM
Cruise in return for a 19.6 percent stake. An initial payment of $900 million
will be made this year with the remainder to be paid out when GM Cruise's
self-driving cars are ready for commercial deployment, scheduled for 2019.
As part of the deal, GM will also invest an additional $1.1
billion in GM Cruise. SoftBank investment adviser Michael Ronen said, "The GM
Cruise approach of "a fully integrated hardware and software stack" gives it a
unique competitive advantage." And given Tesla's production problems, GM's
manufacturing expertise is also a big plus.
by 2021, self-driving automobiles will reach the "tipping point" where over 50%
of U.S. consumers are willing to use the service. According to The Road to Autonomous Vehicles - 2018 survey, 59 percent of Americans still
believe autonomous vehicles are not as safe as vehicles operated by people and
55 percent would not be willing to ride in an autonomous vehicle, today.
However, the ability of a person to assume control of the vehicle, would
reportedly convince 60 percent of Americans to ride in a self-driving vehicle.
That may indicate that Level 4 autonomous vehicles with steering wheels and
pedals would win over a majority of consumers. And,
in addition to regular consumer transportation, by 2025, commercial business
models will also benefit from self-driving technology. For instance, consider the implications of
offering customers fully autonomous rides to and from your business. According
to experts, the move could have big implications not only for
businesses but for cities, public transportation systems and car owners.
Or consider the benefits of self-driving pizza delivery vehicles.
Also, "There's an infinite number of new advertising modes that become
possible," says Hod Lipson, a Columbia University engineering professor
and author of the book "Driverless: Intelligent Cars
and the Road Ahead."
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