Autonomous Vehicles – The most disruptive innovation of a generation

The huge impact of driverless cars

We’ve written about driverless cars before – autonomous vehicles are already revolutionising the way we get people (and things) from A to B. It’s clear that driverless vehicles are incredibly disruptive, and their development has even been credited with bringing about the third transportation revolution. However, the changes caused by widespread adoption stretch further than just transport. Cars are a huge generator of revenue for organisations from governments to commercial businesses. Entire road infrastructures have been constructed to suit cars as we know them, as well as the layout of urban environments. Even many houses have a room – the garage – entirely dedicated to car storage. All of this, and more, will be unnecessary once traditional vehicles become antiquated. The question is, can driverless cars really make so much of a difference?

The numbers say yes. . .
First, there’s the stats. It’s been suggested that one driverless car is likely to replace as many as 15 – 20 traditional cars. This follows that over $17 million regular vehicle sales will be displaced by just one million autonomous ones. On top of this, around 10% of all current businesses are car-related – think dealerships, fuel stations, auto repair, car rental services and car washes. If you take away standard cars (or at least reduce their number) then you also create serious issues for the companies that rely on them to survive. Even airports – yes, airports – made 41% of their 2013 revenue from parking and ground transport. Traditional cars are still massively popular, but the take-over is imminent. This year, car manufacturer Volvo plans to release 100 autonomous cars for public use in Sweden – and that’s just one of the many companies attempting to capitalise on the new technology. These are some daunting figures for sceptics to consider, but how exactly will driverless cars cause so much disruption?

Why are driverless cars so disruptive?
We know that the adoption of autonomous cars will affect already dwindling new car sales, and make car ownership even less attractive. . . but how else will they disrupt our lives? One of the emerging trends in driverless technology is the growth of fleets. Uber has one in Pittsburgh, and Delphi is developing one in Singapore. These fleets will eventually offer different types of vehicles, for example single or multiple occupants. This will gradually remove the need for car hire and taxis, as well as affecting methods of public transport. Couple this with electric vehicles (which, incidentally, is exactly what Tesla Motors is doing) and suddenly there’s increased efficiency and less pollution due to lower fuel consumption. A decline in sales of petrol and diesel will obviously have a huge effect on companies in the gas and oil industries. It’s not just falling sales of fuel which will cause problems – in the U.S., car sales account for 40% of state and local sales tax. Of course, governments will find a way to profit from the so-called third transportation revolution and the changes that come with it. When it comes to businesses, autonomous vehicles have inspired new business models in which established automotive companies partner up with relevant startups – such as GM and ride-sharing app Lyft. In short, then, driverless cars have immeasurable disruptive potential because so much of our lives are built to accommodate standard vehicles. Once they begin to be replaced, all of that will have to change.

Barriers to adoption
A world of autonomous cars might seem a long way off, especially as traditional vehicles are so ingrained in our daily lives. Most of the changes caused by autonomous cars will affect cities, where people need transportation but don’t want to actually own their own vehicles. Although the scope for disruption is massive, there are still a number of potential barriers. First of all, some people will be unwilling to adopt, especially those in rural areas where traditional cars are necessary due to a lack of public transport. There will always be a place for traditional, run-of-the-mill cars for those who drive simply for the enjoyment of it. Other obstacles are physical – cities may be wary of allowing an autonomous fleet to operate in certain areas because of changes to the existing environment. If a city council has recently spent tax-payer’s money on building a brand new, state-of-the-art parking facility, then they might think twice about investing in the very thing which promises to make parking lots obsolete. Even though there are potential setbacks, there’s so much corporate power behind autonomous cars that their mass use is more a question of who than of when.

Autonomous cars will disrupt entire physical environments, at least in urban spaces. Cities will no longer need parking lots, taxi services or even public transport, because driverless fleets will replace them all. Even though this seems like part of a distant future, the most important thing about the disruption caused is the speed in which it will come about. This is mainly due to the sheer number of companies who are developing the technology. While the advent of autonomous cars will challenge businesses that make their money from traditional transportation, there are equally as many opportunities. For example, companies can partner up with startups or even big manufacturers to become part of the autonomous revolution. Even relatively late adopters like Volvo and Ford are catching up with long-standing developers like Google. With so much investment in driverless cars, the third transportation revolution – which will in turn change the very structure of urban life – is a certainty.

Will autonomous fleets alter the physical infrastructure of cities and towns? Share your thoughts and opinions.