Big businesses are backing AVs, but has expectation overtaken reality?
D/SRUPTION interviews Charlie Henderson…
Automotive companies are piling money into autonomous vehicles. Self drive technology is being tested across the world, demonstrating the global interest in making these systems work. But with automakers, software companies and transportation firms still jostling to master semi autonomous functionality, will we really see fully self driving vehicles in the next ten years, and if so, what value will they bring?
Charlie Henderson is a transport expert at PA Consulting and heads up the company’s global roads business. For 25 years he has worked with clients in both the public and private sectors, helping them to understand and address the challenges of transportation. Henderson is the first to admit that his view is realistic, rather than optimistic. But it’s not without justification. Last year, PA Consulting published a report that explored the maturity of different aspects of autonomous vehicle operations. The overall conclusion was that the progression to full, level 5 autonomous vehicles would be an incredibly difficult journey and would take many years. Effectively, PA’s research shows that autonomous vehicles will not be commonplace on our roads until at least 2027.
“The various technology demonstrations of partially autonomous vehicles seem to imply that the road to fully autonomous vehicles is relatively short,” says Henderson. “Unfortunately, while technology issues are being readily addressed, there are a much wider range of issues that aren’t, for example policy, infrastructure, security and the behaviour of other road users.”
Unsurprisingly, he doesn’t expect to see widespread adoption of autonomous vehicles for at least two decades. While many automakers cite 2020 as the year that they will bring AVs to the consumer market, Henderson takes a pragmatic view.
“At the moment, there is no fully autonomous vehicle available to buy, so that means in 2018 there will be no fully autonomous vehicles sold. In 2019, I would be very, very surprised if there were any fully autonomous vehicles for sale.”
An autonomous attitude
To function effectively, autonomous vehicles need complementary environments. As the primary function of AVs is safety, pedestrians and cyclists could theoretically run the roads, secure in the knowledge that self driving vehicles would stop or slow to accommodate them. While this is great news for vulnerable road users, it’s not going to do much for vehicle efficiency. When AVs become commonplace, external actors will need to follow a sensible code of conduct to enable transportation systems to be effective. As well as a fundamental shift in consumer attitudes, it will take considerable time and effort develop a suitable infrastructure. This includes setting up reliable real time navigation systems and fixing the issue of last mile delivery. These ongoing problems suggest that human drivers will, for now, remain firmly in the driving seat.
“Lots of people are getting excited by things like drone delivery,” says Henderson. “The trouble is, packages need to be signed for, or left in a safe place, or taken up a flight of stairs. The role of the driver is much more than getting the vehicle from A to B. It is loading the vehicle, passing the package over, assuring it reaches the right person, in the right condition, and also providing some customer service.”
Another central consideration will be making physical alterations to roads themselves, as autonomous vehicles currently rely on reading road markings and signs.
“In many places, the edges, centre of the road and signage are not well defined. Semi autonomous vehicles are currently being tested in an environment where the roads have been scanned or the road environment is very well defined. The challenge is to get autonomous vehicles to operate on roads where markings are less than ideal, or where road markings are obstructed by snow or puddles. These considerations will only be resolved through rigorous testing and innovation – and that takes time.”
Are AVs worth it?
Assuming that self drive technology can overcome infrastructural, technological, environmental and social challenges, what is the value to companies and consumers? Following the public release of Citymapper’s Smart Ride, it’s not difficult to envisage an autonomous bus service ferrying passengers across cities, or a fleet of autonomous delivery vans working for a logistics company or ecommerce giant. For the consumer, the merit of autonomous vehicles lies in saving time and money. According to Henderson, car owners typically use their vehicle less than five per cent of the time. Buying, taxing, fuelling and maintaining a car suddenly seems pointless if there’s an autonomous service available. But at the same time, what’s to stop people from simply ordering a taxi? The answer, perhaps, lies in the quality and safety of the service offered. Automakers are clearly enthusiastic about autonomous vehicles, but Henderson urges them to think about their ability to deliver a return on investment.
“Auto manufacturers make their money from selling cars. If we reduce the need for private vehicles through greater use of shared autonomous vehicles, this poses a significant challenge to the manufacturers’ business model,” he says. “Many companies market their vehicles on the basis of a premium driving experience. If vehicles are driven by a computer, the ability to differentiate on the basis of a premium driving experience is significantly eroded. Many of the existing automotive companies out there will suffer.”
From this perspective, automaker investment in AVs seems to be counterproductive. Automakers, however, appear to be morphing into transportation companies. It’s possible that their long term aim will not be to sell cars, but to build the fleets that gradually replace the traditional car ownership model.
Although the journey to fully autonomous cars could be far longer than anticipated, businesses from all sectors should watch the market carefully. The leaders of the AV economy are likely to be the companies that have already invested in development programmes, but exactly who will speed ahead is anyone’s guess. Henderson’s view is that the winner of the autonomous vehicle race is probably not yet visible in the market, and will displace incumbents later down the line. But, as he quite rightly concludes, that’s simply the nature of disruption.
For an in depth look at the automakers and software companies transforming transportation, download D/SRUPTION’s Autonomous Vehicle 50 report.