Google cars are already trundling along the US cities and villages, Uber self-driving vehicles are tested in Pittsburgh, the Volvo XC70 is ready for production and will be on the market in 2017, and many other prototypes are on the way. Car manufacturers are trying to catch up through major investments in Artificial Intelligence. This technology will be key tomorrow for the automotive industry, much more than traditional engineering disciplines. The value proposition of car manufacturers is going to change.
Services related to cars are going to be impacted. For example, car manufacturers will sell packaged offers, including an insurance. Indeed, insurance companies will deal directly with the manufacturer rather than the owner… who will never drive the car ! It will decrease the cost of insurance, given the reliability and safety of self-driving cars. It will impact the car maintenance service businesses as well. Updating critical functions such as engine management and safety features will be as simple as updating an app on your smartphone. Therefore, the repair and servicing bills will be drastically cut.
One of the main features defining self-driving cars is their connectivity capabilities with the outside world via internet and the hardware system. Self-driving cars connected to the internet will create an excellent opportunity for television or video streaming companies like Netflix or Hulu. These companies could partner with car manufacturers to install televisions that would show their content. Indeed, instead of spending time driving, people could replace that time relaxing and watching a movie or a television show.
And what if car manufacturers positionned themselves as publishers ? They could create a new advertising media platform – TeslaTube ? Or UberTube? – and sell broadcast hours within their car networks to advertisers desiring to display or broadcast their advertisements within the cars.
Another revolution related to self-driving cars could be the passenger transportation businesses. Will Tesla’s driverless cars be used by Uber? Elon Musk’s company is seriously considering such scenarios according to a one-sentence disclaimer: “Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year.”
What about business models? Look at Uber: its business model is going to be even more profitable if it can work without drivers… Besides, the unicorn is considering taking on more transportation services business. Uber’s acquisition of Otto (self-driving trucking company) in July for 65 $ million dollars is a reason to think so. Uber is actually creating its new marketplace with Uber Freight that will connect a shipper with a truck via mobile application.
In a nutshell, self-driving cars seem are almost here. No matter what the skeptics say: it’s going to happen very soon. Technology is ready. So, what’s the next step ? Could the automotive industry be even more disrupted in the next decade ? Airbus has recently brought the idea of self-driving cars to a completely new level with flying cars ! Airbus has recently unveiled its secret flying-car project Vahana — a single-manned, autonomously piloted taxi-aircraft that can take off and land vertically. Airbus administration says they are aiming to fly a full-size prototype before the end of 2017, and to have a “productizable demonstrator” by 2020.