Will Autonomous Vehicles Thrive?
Updated: Nov 10, 2019
When Uber was just an idea, well before it’s $51B valuation, the world was skeptical about its future, success, and viability. A snowy day in Paris facilitated a vision from the founders Travis Kalanick and Garrett Camp which ultimately reshaped the transportation industry. Now we can look back and connect the dots, but skepticism for Uber and their concept was real.
As we look back through the ridesharing industry’s ebbs and flows of viability and consumer adoption, we believe we are at the precipice of history repeating itself. Now autonomous vehicles are in the forefront of conversation; and it’s met with the same skepticism.
What insurance implications will there be? Who will be held liable in the case of an accident? Will it be safe? And more…
But when faced with decision-making, we assert that all of our skepticism doesn’t really matter. When the economics and convenience of something are significantly better than alternatives, people use them at scale.
TechCrunch published this about the then Uber startup in 2010, “San Francisco Metro Transit Authority & the Public Utilities Commission of California have ordered the startup to cease and desist. Ubercab has remained in service under threat of penalties including up to $5,000 fee per instance of Ubercab’s operation, and potentially 90 days in jail per each day the company remains in operation past the orders.”
And in retrospect, Uber has made it a habit to defy laws and use shady business practices to be successful. On one hand, the Darwinian approach was arguably the only true path to success while being at odds with titanic industries with money, politics, and livelihoods on the line. On the other hand, public sentiment and morality makes it easy for us to start or join a #DeleteUber campaign.
But we won’t delete Uber.
And this is why the traditional transportation industry is ripe for the taking— if it hasn’t already been. As more shared mobility services surface in our big cities, people will adopt them. Because Uber was the trailblazer that facilitated the most difficult shift of all: behavior.
Now, with the last ten years as proof, we gaze out to the next ten; hopefully with a more developed perspective. Ridesharing paired with autonomous driving will put many workers out of jobs, disrupt colossal industries, and we won’t care. Why? Because it will be easier, cheaper, and better.
The most expensive part of the taxi is the driver. Once he or she is removed, investment in all other aspects of the ride can and will skyrocket. Making it more enjoyable for consumers at a fraction of the cost. Not to mention that the oil industry is on rocky terrain. The advancement of long life batteries will eventually kill oil consumption and lead to cheaper and better transportation options.
In the article, This Is How Big Oil Will Die (link in last paragraph), Seth Miller writes, “And here is what is disruptive for Big Oil: Self-driving vehicles get to combine the capital savings from the improved lifetime of EVs, with the savings from eliminating the driver.”
“The costs of electric self-driving cars will be so low, it will be cheaper to hail a ride than to drive the car you already own.” This is profound. The powerful combination of software, electric vehicles, and autonomous drivers will break the transportation industry, and then the domino effect is inevitable.
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In November of 2017, McKinsey published an article about consumer sentiments on ridesharing. They shared this graphic:
Skepticism about where the ridesharing and transportation industries are headed may still exist, and it should be welcomed, but better performance always wins in the end. People will buy services that are easier to use, more convenient, make more sense for businesspeople, more reliable, environmentally friendly, and add more value to people’s lives.
Henry Ford’s famous quote comes to mind, “If I had asked people what they wanted, they would have said faster horses.” People don’t generally know what they will or will not adopt until it happens. When we look back in 30 years, we may not know how we ever drove ourselves. Thanksgiving dinner tables will hear grandfathers telling stories of when he used to have to drive. Uphill both ways. In the snow.
And it all might happen sooner than that.