Self-Driving Cars Will Require New Business Models

Self-Driving Cars Will Require New Business Models

Self-driving cars will be first available to robotaxi-fleet operators, not private owners. This availability restriction comes from the expensive nature of LIDAR sensors that make the sensors themselves more expensive than the rest of the vehicle. The safety and reliability of automated vehicles also impacts their ability to be privately owned, at least at first. Safe and reliable vehicle operation is easier to achieve when the vehicles operate within a geographic range that has been mapped in detail, meaning automated vehicles will mainly operate in city centers in their early stages of adoption. These considerations driving automated vehicles toward fleet ownership will have impacts on many areas of the automotive industry.

Key findings

"It is likely to be many years before AVs are cheap enough for individuals to buy them, and capable enough to operate outside predefined, geofenced areas. Meanwhile, the roll-out of cheap robotaxis in urban areas might encourage many young urbanites, who are already going off car ownership anyway, to abandon it altogether. The combination of ride-hailing and autonomous-driving technology confronts carmakers with “the most profound challenge to their business models in a century”, declares a recent report from BCG. That is why carmakers are now piling into ride-hailing and car-sharing services and pushing on with their own AV programmes. In an autonomous future where ownership is optional, they need to be selling rides, not cars."

A shift from private vehicles to fleet-owned automated vehicles will mean business problems for car dealers, repair shops, partsmakers, insurers, health-care providers, and personal-injury lawyers. A more direct threat appears for people who drive taxis and delivery vehicles.

"It already seems clear that AVs will cause the car industry and its adjacent businesses to change shape dramatically over the next couple of decades. But the consequences will not stop there. Like cars before them, AVs are sure to have far-reaching cultural and social effects too, most obviously in cities."

View PDF
Behind a hard paywall (paid accounts only)
Behind a soft paywall (limited views allowed until a paid account is required)





No items found.

See something that should be here that isn't? Have a suggestion to make?

Please let us know