This May Be The Biggest Economic And Social Shift Of The Last 100 Years. Are You Ready?
The changes coming in driverless vehicles are just the tip of the iceberg. What’s yet to come is nothing short of unimaginable.
PHOTO CREDIT: Getty Images
The constant chatter about driverless, autonomous, and electric vehicles is nearly deafening. Yet, in all of that noise what's most often missed is that the implications these trends will have go well beyond the obvious changes in the way we power and drive automobiles.
Not only is the 150-year reign of the Internal Combustion Engine Vehicle fast approaching its end, but with it the near sacred model of automobile ownership, along with the very role of the automobile as a staple of modern society.
Trying to depict how radical this change will be is near heresy since it threatens one of the largest and most established global industries along with an entire ecosystem of suppliers, dealers, real estate developers, lenders, and insurers.
So, just how dramatic? Well, a research report, Transportation 2050, just published by the futures think tank I lead, Delphi Group, projects that the number of automobiles on the road in 2050 will be less than 15 percent of what it is today. That's not a typo. In the USA that's a drop from 250 Million vehicles in 2018 to 33 million in 2050. The same approximate effect will be felt across the globe. However, the number of vehicle hours driven (by the cars, not by us) increase 400 percent. Why? In a word, utilization.
In 30 years the number of cars will decrease by 85 percent, but the number of hours driven will increase 400 percent.
Autonomous electric vehicles require 90 percent less maintenance, can achieve 80 percent + sustained utilization rates (i.e. 23 hours a day), do not need parking garages and parking spaces, can become platforms for entertainment, shopping, and socialization, and will reduce traffic accidents by 90 percent + (94 percent of all accidents today are attributed to human error).
Imagine fully autonomous vehicles, which will be available on-demand where and when needed. These vehicles will operate with down time only for maintenance and recharging. And, the sacred cow, individual ownership of vehicles, will become a novelty for collectors and for sport.
Does this sound like anathema or opportunity?
These forecasts will likely appear outlandish as they tread on some culturally and economically hallowed ground. Cars are far more than a mode of transportation. The automobile has become synonymous with personal identity in the developed world. For most people it is the first or second largest purchase and ongoing expense they will incur during their lives. Yet, unlike a home, the typical car is idle and has no utility for 90% of its useful life. Where is yours right now? When weighted based on total cost of ownership over actual hours used it becomes the single largest life expense for 99.9% of the world's population.
It's Nobody's Car
Want to go really out on the edge?
What if autonomous cars were non-human legal entities in which many people had a stake, not unlike a public corporation, which has many owners?
While the notion of cars that own themselves may seem far-fetched, there is no practical reason why this cannot be done. The technologies needed to do this, such as blockchain, exist today. In fact, in developing parts of the world where individual ownership is economically inconceivable, or where the overhead needed to introduce an industrial era model of corporate ownership is economically unattractive, this may be the only viable model to bring the transportation needed to build a thriving economy for ten billion people.
Here are just 10 of the inevitable changes that are coming over the next 30 years:
- Insurance companies will need to adjust models for insuring human-driven vehicles, making car ownership a financial luxury for individual owners.
- The role of the automobile as a form of transportation from point A to point B will be transformed into a form of entertainment and socialization creating a new platform for the delivery of content and media. You will basically be living inside of your smartphone!
- Autos will function as platforms for socialization in which people connect and gather. Some will be mobile conference and meeting rooms, others mobile restaurants and clinics. Commute time will cease to exist and along with it untold hours of lost productivity. Could this be the Drive-In of the 21st Century?
- The AV will finally allow the decongestion of urban city centers, which are today littered with automobiles that occupy valuable land. For example, in the typical large city 50 percent of the land area is dedicated to roadways and parking. Urban and rural areas will see a resurgence of activity as commute time becomes a non-issue.
- If projected out to 2050 we may save over one trillion dollars in the US alone since the cost of motor-vehicle deaths, injuries, and property damage in 2016 was $432 billion in the US alone, according to the National Safety Council.
- Deaths due to vehicular accidents will be reduced globally by over 1,000,000 lives yearly.
- The evolution of EVs and AVs will vary significantly from geography to geography and country to country. While commercial autonomous vehicles will likely develop quickly in developed countries such as the USA, individual non-ownership-based AVs are likely to take longer. Non-intuitively, the inverse is true of developing countries, such as India and China, which will have a higher economic incentive and regulatory latitude to move to AVs.
- There will be widespread employment disruption within developed countries that rely heavily on both the manufacture of owner-driven vehicles. Dealerships will disappear entirely.
- Lending for auto loans will shift dramatically from human owners to vehicles that own themselves.
- And lastly, let's not forget the impact of vehicles on the planet. According to a study by NASA, vehicles are the single largest contributor to climate change.
There's ample disruption and fear to be doled out by the specter of these changes and the retooling they will demand of the workforce and the economy. Perhaps, as disruptive will be the myriad unintended consequences that we can only begin to predict. For example, 13.6 percent of all organ donations today come from vehicle accidents. How do we make up for that deficit when we already have over 100,000 people waiting for organ transplants?
Yet, there is also immense opportunity to create a safer, more ecologically sustainable, and human-centered model for the transportation of ten billion people.
Unimaginable? Big change often is. It's also inevitable.
BY Entrepreneurs Organization