Image: Mercedes Benz self-driving concept car Image credit: Daimler/Mercedes Benz
There has been an increasing amount of noise around the topic of autonomous cars, not just in the automotive sector, but in mainstream media. Despite the hype, widespread adoption is probably a long way off. However, in the meantime, the stepping stones to this future may themselves disrupt all existing businesses in automotive distribution.
I whistle and it comes to me. That’s my future vision of autonomous cars. I expect to ask for a car when I need it, it arrives within minutes, takes me to my next destination or travel hub (e.g. train station), and then disappears. I don’t give it a second thought and whilst I may have a nostalgic fondness for the idea of owning a car, the reality is that I really don’t need to. A future of tireless autonomous robot taxi fleets is catching the public imagination, and the consequences are clearly far reaching for the automotive sector, particularly, if like Lukas Neckermann foresees, this means a future of zero ownership, zero accidents and zero emissions.
But before we get to autonomous fleets, a number of stepping stones are likely to pave the way. The first stepping stone is on-demand transport. Well, that’s called a taxi, I hear you say. Perhaps, but more and more people are talking about getting an Uber. The real change is not the mode of transport - that’s just a physical asset and driver. The differences are in service provision, specifically the real time and on-demand mix of integration of customer booking and payment, insurance for drivers, and assimilation into public transport - the latter enabled via the recent partnership of Uber with TransLoc, a provider of public transport tracking and updates. By creating a system of taxis, integrated via travel planning into the wider public transport network, Uber could become the first-choice, all-modes, and on-demand travel portal for customers and suppliers, and in doing so also becomes the default revenue collector and customer account manager. Daimler offer My Taxi as an Uber competitor, with 10 million downloads of the app and 45,000 participating taxis, as part of their mobility services portfolio. MAAS, or Mobility as a service, has just launched Whim, a portal that evolved from the Kutsuplus on-demand bus experiment in Helsinki, which also aims to be that single integrated A to Z travel platform. Whoever leads in this market becomes the customer transport channel of choice, and manufacturers not leading in this market risk simply remaining a taxi fleet supplier. But what if some cars continue to be simply safer?
This brings us to the second stepping stone towards autonomy, which can be summarised as acceptance of autonomous driving functionality and overcoming doubts around safety. Safety may seem a barrier for acceptance, given recent high profile stories around Tesla road trials, but long term, as experience and statistics begin to accumulate, incremental steps towards autonomy are likely to be driven by safety. As campaigners, legislators and telematics insurance offerings nudge customers towards more safety-driven semi-autonomous features, these capabilities will become mainstream in the same way that ABS and seatbelts became normalised. There will also be a pull from customers for whom the everyday experience of driving is not one of excitement, but one associated with frustration and boredom. One of the benefits of ever increasing vehicle connectivity will be the networked optimisation of traffic flows, which should reduce congestion. There is clearly an appetite for moving away from driving in congested traffic, and automated driving in traffic jams, following the car in front, is already offered as a build-to-order option on some new cars. Equally, long distance highway driving is both tiring and subsequently a safety risk, which is why driver assisted auto-pilot, is also already offered as an option on some new vehicles, along with automated trailing distance control and lane-control. A recent study found that 58% of consumers surveyed said they would ride in a self-driving car, a figure that rises in heavily congested markets such as Singapore (62%), and India (85%). However, increased focus on safety and freeing up time in the car may make the car ever more personal as a space – as someone I recently spoke to at a dealer association pointed out, the “car is itself an emotional space, living room on wheels”. If the semi-autonomous features make the car even more of an extension of the home, along with other services provided by connectivity, then customers may therefore retain a strong attachment to ownership; if so, then even if we see a continuation of the shift to leasing rather than outright purchase, the role of new car sales and service provision to private customers remains a core industry business model. As we have discussed in much of our recent work, a more omnichannel approach to selling products and services may mean a major realignment of the roles of carmaker and franchise dealer, but at least the customer proposition remains one based upon a personal service and a dedicated vehicle.
The third stepping stone is therefore letting go of the habits of ownership, and perhaps this is the most open to question. Many think it likely that there will remain an appetite for car ownership, either because they live in remote places or more importantly for the car industry, they still really like the car and have an emotional attachment to cars. Both the industry, and many car enthusiasts, will be heartened by the findings of our latest ICDP customer research which suggests that amongst drivers surveyed (the survey included a roughly even spread of cars up to nine years old), a passion for the vehicle remains important. But long term, many question whether individual car ownership will remain that important, particularly in Western markets. As Mark Walker from Zipcar memorably put it at a car sharing conference in London a couple of years ago, when talking about their perspective on the challenges presented by congestion, air quality, car parking and changing the culture of car ownership; “it is a transformation, and we have a million habits to change”. Mark went on to argue that a fully integrated city car sharing system needs a lead integrator to bring together customer account management, network management, and city government policy must also be aligned to provide the necessary incentives. Clearly as a mobility provider, Zipcar has a particular interest in moving policymakers in this direction, but many city governments appear to be heading in this direction anyway - Madrid, Milan, Brussels, Oslo, Dublin, Paris, and the list appears to grow. In making the car more useful through less dedicated ownership, the trade-off may be that the automobile also becomes more utilitarian. Ford has just supplied ten Transit vans to support on demand buses with Bridj in Kansas, and must be hoping that this isn’t a vision of their future as just a supplier. Most carmakers can see the risk and opportunity implicit here: Toyota has invested in Uber, GM in Lyft, VW in Gett, and BMW and Daimler in a number of initiatives. What people really want is convenience, and relief from wasted time and the mundane – they want to keep moving, and carmakers clearly still have a role to play in providing this service, but again, they will want to be more than provider of equipment.
Autonomous cars may well succeed in making the car the hero rather than villain within urban transport, by keeping people and traffic moving, whilst freeing up users to use their time more effectively. But on the way there, manufacturers and other distribution businesses will have to think carefully as to where they sit in this evolving ecosystem. On the one hand, car sharing, ride sharing and integrated travel portals may suggest that the road ahead on the way to autonomous cars makes private car ownership less important and therefore the customer more distant. But on the other hand, increased semi-autonomy, driven by safety and other connected car functionality, may make the car even more of a home from home, and via connectivity, carmakers and dealers could generate a much closer relationship with the customer. Whoever provides the best solution to the customer, providing the form of mobility they really want, will be the one that decides what autonomy looks like, when it eventually arrives.
 Lukas Neckermann, 2015, The Mobility Revolution: Zero Emissions, Zero Accidents, Zero Ownership, Matador
 Reuters, 2016, Uber pushes into public transit with new app partnership; http://uk.reuters.com/article/us-uber-partnership-idUKKCN0UP18L20160111