Self-Driving Cars Disrupt the Crowd

Vehicle prototype

Google and Uber are building self-driving cars, it’s rumored that Apple is going to be building self-driving cars, Tesla has launched driver-assistance features, and many traditional auto manufacturing companies are advancing their features to include driver assistance and, eventually, automation.

Ride sharing and car sharing pave the way for the self-driving car industry.
Ride sharing startups, like Uber, Lyft, Sidecar, BlaBlaCar, and car ownership-sharing, like Getaround, DriveNow, Car2Go, RelayRides, and Zipcar are paving the way for this market. Society is learning we don’t need to own a car to complete our journey, increasing the demand for this new product. Yesterday, at a Silicon Valley Forum event in Palo Alto, experts predicted that self-driving cars will be rolling out within 5-10 years, which is just about the time car payments will end on any recently purchased cars. Also, keynote speaker, Stanford’s Stefan Heck shared this stat: “The leading cause of death for 25-40 year olds is human driven cars”, demonstrating the market need for safer and effecient transport. The potential impact to society is staggering. I’ve outlined the findings below.

The four phases of self-driving car development suggest we’re 5-10 years out.
The Personalized Car event, hosted by SVForum was held on illustrious tech-centric Sand Hill Road in Palo Alto, with speakers from Stanford, BMW, consulting firms, investors, inventors, entrepreneurs, and forecasters. Four states currently allow the testing of self-driving cars, including California, Florida, Michigan, Nevada, as well as the District of Columbia. The speakers discussed the four phases of self-driving car automation (see maturation chart, courtesy of Morgan Stanley, below) at the most basic-level, driver-assist features, like Tesla’s autopilot. The second phase, which we’re in now, is where cars can self-drive along with human fail-safes, like the Google self-driving car I see whizzing around Silicon Valley. In the next phase, we can expect to see cars transporting people, without assistance. In Phase 4 the need for human drivers will be eliminated altogether.

morgan-stanley-dcars

Above: The event verbally cited these four phases of car automation.

Speakers at the opening panel discussion were asked to forecast when they might expect to see self-driving cars for mainstream deployment. They forecasted 5-10 years, in agreement with the preceding Morgan Stanley graphic. Many of the speakers discussed the impacts self-driving cars might have on society at large. Here’s a list:

Partial list of who’s disrupted by self-driving cars:

  • Taxis compete with Uber, Google, Apple self-driving cars. Ride sharing was just the first blow.
  • Ride sharing drivers at Uber, Lyft, Sidecar, BlaBlaCar will be disrupted as autonomous cars do a safer job at lower cost.
  • Local couriers, like TaskRabbit, Instacart and bike messengers will be impacted.
  • Mid range and long range transportation and delivery services would be impacted as local delivery becomes automated.
  • Retailers may see a change in foot traffic as people order goods to be delivered to their homes by driverless cars.
  • Auto and life insurance should be impacted, due to fewer accidents and the introduction of per-mile-based insurance.
  • Paramedics may be impacted if victims choose self-driving cars to whisk them to ER for less than severe injuries.
  • Car ownership could dwindle. Self-driving cars means fewer cars will be needed, as they’re efficiently routed as needed.
  • Airbnb may benefits as urban areas convert garage spaces into living areas for short term stays.
  • The parking industry could suffer, as lots are converted to other uses.
  • Parking fines and local taxes could dwindle with fewer cars on road and robotic efficiency.
  • Radio and podcasts could become less popular, as people play video games and watch videos in the self-driving rides.
  • Short distance airlines could suffer, as people choose to take a relaxing trip in a mobile living room.
  • Communities or attractions not connected by rail could prosper as people easily travel there for business or pleasure.
  • Auto repair could be impacted as self-driving cars automatically head for maintenance without the driver or owner present.
  • Hotels and motels could be affected as families are able to sleep in the comfort of a self-driven vehicle on the way to their destination.
  • Leave a comment, below, on who else might be disrupted.

I’m on the advisory board of Sparks & Honey, an agency based in NY that looks at future trends and their impacts on society. They recently published this SlideShare, below that shows the impacts of self-driving cars on logistics, retail, culture, and even our love lives. Their list of disruptions goes far beyond what was mentioned at the event yesterday. Also, I captured notes from the event in real time on my Facebook feed, which you can read, along with community reactions.

 

Impacts to Business and the Crowd.
My current focus is on the Collaborative Economy, how the crowd obtains resources directly from each other, using commonly available technology. The key finding is that the startups in this space will also need to adjust their business model to adopt automation and prepare for people to be slowly eliminated from the driving process. Given that Uber is indicating that they’ll be creating self-driving cars and that Google will be adding ride-hailing apps to summon their self-driving cars, we can see how this is already coming to fruition. Get ready for more disruption, led by technology. To prepare us for this next phase, I’ll continue to cover this topic from time to time, based on what I see and learn.

Update: The day after I posted this, Volvo announces they’re releasing a self-driving car, by 2017, in just two years. Hat tip Lisa Woods.

There’s more discussion about this article on Linkedin, and on Facebook.

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  • Dave Klaboe

    I enjoy driving. I like the control and the ability to be spontaneous. I hate the idea of having to depend on a computer. There are probably hundreds of reasons for me to dislike the whole concept of giving away freedom to machines or the companies that make them. Is this the beginning of human submission to machine dominance? Drones and robots feel no pain. No compassion or empathy. Do we want to allow them to be our masters? It’s all leading in that direction, and it is insidiously slow. People have already become addicted to communicating via cell and device. Hardly anyone actually speaks to each other. A whole generation have already been programmed to de-humanize. The genie is already out.

  • That’s a great point Dave. We’re already giving up our data for convenience to Google and other technologies, now, we will give up other tradeoffs in exchange for more efficiency.

  • Michael Hwan

    I sold my car because I have options like UberX & Lyft in my market. I now take public transit and bike everywhere. This is what freedom is to me.

  • What else might be disrupted? You fail to mention municipal bus service and long-haul trucking. As much as I’m in favor of driverless cars (since I bought my first car in 2008 at the age of 52 I’ve driven more in the last 7 years than I did in the previous 30 — and I’ve discovered how many lousy drivers are out there … including me) it seems obvious that, as with factory automation, the technology will destroy far more jobs than it creates. Of course, that’s a problem, unfortunately, that afflicts most disruptive technologies these days.

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  • Another huge impact of driver-less cars is the ability to be connected on the same network. Imagine that every car on the road knows when the other is going to start/stop, turn left, turn right, where they’re going, etc.

    That will do wonders for traffic and make things way safer on the road..

  • No doubt there is disruption ahead. But based on having spent some time in the automotive industry, I’d suggest that the timeline is far too optimistic. When you consider where most Americans are with respect to new vehicles, the data suggest they’re holding onto their vehicles longer – on average 11-12 years. Economically we’re in a place where more people are buying used cars and holding onto their new cars longer.

    Which means that Phase 1 would extend well into the early 2020s – and this is assuming that drivers are buying vehicles equipped with the often optional driver assist technologies. Phase 2 – limited autonomous (or partially autonomous) driving realistically will take longer than 4 years. Phase 3 will more likely take two generations rather than two decades to put into effect.

    And “utopian” is the proper word for 100% autonomous driving adoption – largely because of what Dave Klaboe mentioned in the comments: many people in our society actually enjoy driving. And while the drudgery of a commute for some people is one thing, but people still seek the emotional connection to their vehicles.

    The challenge of course, is how completely autonomous vehicles work when they have to co-exist along with non- and semi-autonomous vehicles. The world isn’t a perfect place and the complexities of V2V (vehicle to vehicle) and V2G (vehicle to grid) communication need to account for that.

  • Thanks for sharing this Michael. Have you measured the total economic impact to your finances?

  • Mind, great point. I didn’t mention city transportation, directly. We did mention ”
    Mid range and long range transportation and delivery services would be impacted as local delivery becomes automated.”

  • When you think about it, a series of connected cars, start to look like a train. They could potentially all start and move forward at the exact same time, as a unit, as well as turn and stop.

  • Scott, I look to you, as someone who’s spent time working in one of the top Auto companies in the space.

    Even today, with car ownership, people are increasing their spending on ride sharing, so this may be just an evolution of that existing behavior –even if they’re holding onto the vehicles for longer periods of time.

    It was discussed that self-driving cars (should we call them “autoautos”, now?) would first occupy the car pool lanes then spread further into the roadways.

  • Michael Hwan

    I save roughly
    ~$1,300/yr on car insurance.
    ~$5,000/yr on gas
    ~$1,500/yr on car maintenance

    estimated total savings a year? ~$8,000 a year and lots of headaches on searching for trustworthy local mechanics.

    Note: I drove under 10,000 miles (on average over 6 years) that’s why I sold my car.

  • Please don’t tell me I’ll have to wear one of those turtleneck sweaters!

    I think you missed Phase 0. My current car has adaptive cruise control, adjusting speed to the traffic in front of me. other cars break in emergencies, and some can park themselves. These small implementations make us more comfortable with the car controlling aspects of driving, with every new aspect the car controls the closer the bar moves to fully autonomous driving. Each phase will be a series of incremental changes.

    My prediction is that the first fully autonomous cars will operate in a very controlled environment, probably Disney or a tech company campus. Then some cities will convert their carpool lanes to autonomous vehicle lanes. This will provide a more controlled environment and give people incentive to use autonomous vehicles. Next will be long stretches of highway in the US Midwest, then one day we’ll wake up and realize autonomous vehicles are everywhere.

    Your discussion of the secondary effects is interesting too. It will change how we live, that’s for sure.

  • I think, that some of those features you just mentioned are part of phase

    1. Tesla has Autopilot features (it’s not self driving), so yes, agreed, incremental additions. That’s how the robots win 🙂
    http://www.gizmag.com/tesla-model-p85d-driver-assist/34123/

    2. It was discussed that the self-driving cars will first be in the car pool lanes, then spread elsewhere.

    And yes John, you must wear a Turtleneck every day for the rest of your life, black, no less.

  • Dave, excellent analysis by Zack. Thanks you for sharing that.

    That’s right, I believe the first instances will be “self-driving rides as a service” from Uber or Google –that’s the try and buy.

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  • Here’s another impact: it helps the elderly https://twitter.com/rickg/status/569239418323628032

  • I like this one, from Grimur my friend from Denmark

    https://twitter.com/GFjeldsted/status/569257780881842177

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  • rorykoehler

    One of the biggest advantages for urban usage will be the improved safety of riding a bike, especially at night. Driverless cars could have the unintended effect of discouraging people to use cars for short trips at all and take a bike instead as the roads will become much safer and less daunting for the average person/cyclist.

  • rorykoehler

    The benefits far outweigh the pitfalls. Insurance companies won’t trust your ability to avoid an accident as much as they will a computers and this is what it will boil down to in the end. De-humanization is a choice which is perhaps admittedly reinforced by how society and the economy is structured. Technology should be liberating not all consuming however that is a sociological and more importantly a political choice. If we do not give up the outmoded economic ideas of the 20th century then we will enslave ourselves. Nothing is working as was intended but due to lack of critical thought and perhaps an under current of greed and a political resistance to long lasting change (ie systemic corruption) critical thought leadership has been omitted in much of recent policy decisions.

  • I don’t think it’s at all unlikely to see autonomous lanes either alongside or in addition to carpool lanes. Seems like a way to ease ourselves into it.

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  • Elderly care changes, they’ll be more mobile, and spend more money.

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  • GG

    I that one of the biggest impact is that instead of “polyvalent”, bulky and heavy cars that people own and use for multiple purposes, for most usage urban one passenger, a light dedicated emission-free vehicle will be used. The impact on CO2 emission and environment will be paramount. It will change the life of the 5 billions people who don’t have access to individual mobility.

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  • Jax2000

    Pick up and delivery of school age kids, will become more efficient, and safer (less distracted rushing parents trying to get kids to school?!). Less need for personal cars, mean in-law units or expanding houses into the garage. Building codes / street enforcement could change to allow smaller one passenger cars to park themselves. Thinking about new book – Driving the Future: more info http://www.greeneroo.com/?p=4730

  • Ferdinand Mühlhäuser

    Hi Jeremiah, great to meet you earlier this year in Paris. I agree that many of the disruptions mentioned above are likely to happen the moment when the ride moves the last bit from a personal identity thing to a mere service to get from a to b.Three more I did not see above:
    – the classic tourism industry or corresponding new entrants will be able to create fully automated mini tours including destination guide and optimized pickup. These tours will not even require any inventory at the organizing company (or Facebook, tinder etc. group), as they will be completely software driven relying on the instant rental of the cars.
    – Even the meeting/office space industry could be affected as meeting space demand either in peak demand periods or in optimal locations for all attendees to convene could be covered by a corresponding meeting bus fleet.
    – Also spaces for paid or unpaid occasional encounters could be an application for an optimized bus inventory.
    All three could be done with current cars as well, but become a lot less complex (and partially awkward) with autonomous cars.

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