Driverless Vehicles

Revolution or Evolution?

By 2030, 25% of Miles Driven in US Could Be in Shared Self-Driving Electric Cars

BCG’s key insight is that the convergence of three trends—ride sharing (services such as Uber and Lyft), autonomous driving, and vehicle electrification—create a far more compelling economic case than any of these forces alone. Due to their ability to cut travel costs by 60%, shared autonomous electric vehicles (SAEVs) could shift about 25% of miles traveled from private automobiles-—creating enormous benefits for consumers as well as causing major disruption to the automotive industry. While total vehicle demand will only be affected slightly, by 2030 more than 5 million conventional cars per year could be replaced by a combination of fully autonomous electric vehicles for urban fleets and partially autonomous cars for personal use. Cities will benefit from less congestion and cleaner air, but could be disadvantaged by falling ridership on public transit, fear of which could result in some cities proactively trying to regulate the number of SAEVs on the road. 

BCG’s conservative estimate is that 23% to 26% of miles driven in the United States, or about 800 billion to 925 billion miles, could be traveled in SAEVs by 2030. The shift to SAEVs, which would be gradual and would begin by the early 2020s, would likely occur in cities with more than 1 million people, where there is sufficient demand to keep fleet utilization high and there are significant pain points associated with private vehicle ownership (expensive insurance, difficulty finding parking, and congestion). 

DYI:  Driverless vehicles will first arrive on closed loop circuits such as hospital complexes, universities, military bases, large amusement parks etc.  Once the bugs have been worked out on closed loop circuits the technology will spread to city bus services, then to long haul truckers and lastly individual car and truck owners. Once the public becomes convinced that the safety issues are SIGNIFICANTLY better than drivers this industry will move from early adopters to a massive growth industry.  Why?  Cost of use will drop – whether owning or renting – considerably.  The reason is simple – flexibility! Vehicles will go where they are needed without the need of its owner/driver…the possibilities are almost endless.  Routine maintenance; send the car all by itself and when the mechanics are finished they will send it back any where you need it.  Wife needs the car to do an errand send the car all by itself…She works the other sides of town, too far to send the car, call a driverless cab company as the cost will now be marginally higher than car ownership (no cabby to pay)     

Individuals and families in large cities will go from 1 to 2 cars down to 0 to 1 with many opting out of car ownership entirely especially if the metropolitan area has extensive mass transit such as New York City or Boston.  Suburbanites could be another matter all will be dependent upon direction and distance for a two income household holding many to the two car family.  I’m not as sanguine for a reduction in car/truck ownership for this group but who knows if the market place is allowed to work as opposed to cronyism there could easily reduce the need for two vehicles.  Needless to say driverless vehicles are on its way faster than one would expect yet longer than the cheerleaders for this technology believe, more to do with the public’s perception of safety and reliability.  Once that is conquered will you be ready to get on an airliner WITHOUT PILOTS!?

DYI