Articles and papers written by some of the industries top thought-leaders on business strategy and transformation.

The Long Tail Impact Of Autonomous Driving

Developments in autonomous driving are moving at a rapid pace with expectations that cars will soon be able to handle the majority of the driving and complex situations, without human intervention.  What has yet to be developed extensively is full automation where there is no driver whatsoever.  Once this happens, transportation as we know it changes forever and the impact across many industries will be great.

Think about that for a moment.  No driver means there’s no need for a traditional cockpit in the car – no steering wheel, no pedals, and few, if any, control.  The entire car interior can be re-imagined now that every person in the car becoming a passenger.  Cars can become meeting places, an entertainment site, or a work location.  For the auto industry, these developments mean a complete about-face in their manufacturing process, design, and supply chain.

But the impact of autonomous vehicles will be felt far beyond the auto industry.  With technology taking over the driving, speeding, reckless driving, and traffic infringements will likely become a thing of the past.  The ripple effects of that single advancement will be felt across multiple industries, government, and economies:

  • Policing Changes. With speeding and dangerous driving near eliminated, police resources will now be free to focus on other areas.
  • Citation Revenue Drops. Each year, 41 million drivers receive citations, generating $6 billion in revenue.  Much of that money goes to roads and city improvements which will now dry up, leaving cities with a massive budget shortfall.
  • Court Resources Freed. With fewer citations, courts no longer deal with unpaid fines or driving violations, dramatically changing the daily court operations.
  • Commuting And Public Transport Evolves. People commuting to work are likely to ditch public transport for driverless shuttles– autonomous vehicles that take you directly to your location, rather than a central hub or predefined stop like the current public transport system.
  • Car Ownership Changes. With on-demand driverless shuttles, consumers are likely to reconsider car ownership, especially if autonomous shuttles are plentiful.
  • Parking Redesigned. City parking – and street designs for that matter – will look different if autonomous vehicles are dropping off and collecting passengers at will.  There will be little need for parking structures housing hundreds of unused cars sitting idly during work hours.
  • Accident Rates Plummet. The cost of car crashes to the economy in 2019 was $518 billion – an enormous sum that could well be spent elsewhere, if accident rates were significantly reduced.
  • Insurance Industry Restructures. The bottom line is that autonomous vehicles will save lives – less human error, fewer accidents.  Insurers may move away from insuring individuals to offering coverage to service operators or car manufacturers to protect against technical failures.
  • Death Of Dealers? If car ownership drops and autonomous vehicles are mostly being sold as fleets to service providers or cities, we can probably say farewell to large showrooms aimed at consumers. Service departments will need to be dramatically retooled and staff retrained on the new systems.
  • Car Rental Companies And Ride Share Apps Reform. Unless they transform, it’s unlikely that car rental companies and services like Lyft and Uber will survive in their current form with mass AV adoption.
  • Adjustments For City Workers. Cities without parking issues will no longer need scores of parking enforcement officers… nor the services, cars, and administration departments that support them.

COVID-19 Demonstrates The Need For Autonomous Vehicles

The global pandemic has had a massive effect on transportation worldwide.  In the US, the demand for transit services was down by an average of 75% with figures as high as 90% in San Francisco and ridership on the Washington Metro plummeting by 95% in late April[1].  These steep drops in ridership during the pandemic have thrown already stressed public transportation systems into disarray.

Long-Haul Trucking Is Changed Forever

Unlike humans, autonomous vehicles never have to sleep, stop for food, get distracted, deal with inclement weather, or use the bathroom.  Transporting goods over long distances doesn’t need to be done with a human at the wheel.

Several tech companies, many in combination with freight carriers and manufacturers, are already laying the groundwork for an autonomous freight industry with a network of self-driving trucks and pre-planned routes.  While companies are still testing the viability of the technology on scale, questions remain as to what will happen to the two million people currently working as trailer truck drivers.

The change in long-haul trucking also means traditional roadside support services – truck stops, highway motels, rest areas – will be impacted. Like many other businesses, they will need to restructure to address the changes to transportation.

Autonomous Vehicle Considerations

Leaders in business and government have a job ahead of them to take full advantage of the benefits that autonomous vehicles will bring, but there are several issues to consider:

  • Towns and cities will need to consider tariffs or congestion charges at certain times of the day to ease the control of the volume of AV traffic and drive much-needed revenue lost from speed cameras, parking fines, and driving violations.
  • Supplement public transportation push with eBikes and eScooter services or offer city-sponsored shuttle services.
  • The advent of mass adoption of AVs will force cities to reimagine roadways, infrastructure, city design, and civil engineering.
  • In driverless cars, passengers are freed to use their travel time more productively or differently. Perhaps that’s playing games, making video calls, or even shopping.  Astute businesses will see opportunities here with advertising, content delivery, and communication services.
  • Lots of opportunities exist for services offering maintenance and repair of AV systems, especially as safety plays a critical role in the driverless car.

Mythos Group’s white paper, Post-COVID-19: Re-imagining A New Era of Work, contains more detail on this and other recommendations, and is available to download for free from https://bit.ly/MG-White Papers.

1 https://www.axios.com/coronavirus-public-transportation-subway-bus-ridership-9f039bd9-459b-45f9-954c-b26380a037dc.html

 

 


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