BY DAN NEIL, PUBLISHED DECEMBER 1AT, 2015
When companies like Apple and Tesla roll out their autonomous vehicles, the need for a personal car might be a thing of the past
HENRY FORD WAS A smart guy but he never did the math when he decided to put every American household on wheels.
A century after the Model T, the world has a problem with cars. The U.S. and China will consume about 40 million light vehicles in 2015, according to IHS. Globally, we’re on track to hit 100 million vehicles in 2020.
That’s not a lot of cars. That’s an ocean of cars, an inundation, wave after wave breaking on the shores of the industrialized world. And yet policy makers and common folk alike have been powerless against the siren song of the automobile. Even in the most car-blighted burg in the world, the toxic parking lot they call Beijing, the appetite for the automobile—as status item, as luxury, as totem of personal mastery in a fragile postcolonial mind-set—is driving millions more into its smoggy embrace, despite limits on ownership and the government’s rising alarm.
The absurdity of our century-old, ad hoc approach to mobility is captured in one statistic: The utilization rate of automobiles in the U.S. is about 5%. For the remaining 95% of the time (23 hours), our cars just sit there, a slow, awful cash burn, like condos at the beach.
But what if, like condos, automobiles could be shared? It’s one of life’s first lessons—how to share toys, parents, rooms, feelings. But as little consumers grow into adults, they forget the joys of selflessness. That’s about to change. And I don’t mean the collaborative consumerism we see around us—peer-to-peer transportation like Uber—which is symbolic and transitional, lasting only until automation happens, at which point we can get rid of the wetware. And by wetware, I mean us.
Within a generation, automobiles will be endowed with what’s known as Level 4 autonomy—full self-driving artificial intelligence for cars—which will not so much change the game as burn down the casino. Autonomy will make it possible for unmanned automobiles to be summoned, via app, to your location. And not just any passing tramp steamer, but exactly the vehicle you need for the occasion, cleaned and fueled, for as little or as long as you need (offers may vary in your state). When you’re done—poof!—it will go away.
You don’t pay for the car. You pay for the miles. And only the miles. It’s a whole new way to fly. Let’s start small. Need a pickup for three weekends a year but don’t want to pay for the other 49? Autonomy can make that happen easily without a visit to the dreaded U-Haul depot. Need a car to take mom to the doctor’s, or fetch a spouse from the airport? A decade hence, major auto makers and smaller players will be at each others’ throats for the privilege of sending consumers vehicles a la carte, for a one-way trip, an afternoon, a weekend, a month. These transactions will move through the glowing bowels of your monthly credit accounts, and you won’t even feel them.
‘The utilization rate of automobiles in the U.S. is 5%. The rest of the time, they just sit there like condos at the beach.’
Americans will look back on pre-autonomy like the age of Casio calculators and DOS prompts. Remember cab drivers? Remember traffic jams? Remember when parents lived in dread that their children would die in a car accident? Death and major injury from traffic accidents will drop drastically. The automobile’s other costs—decreased productivity, fuel burned in uncoordinated traffic—will be swept away. “Beyond the practical benefits, autonomous cars could contribute $1.3 trillion in annual savings to the U.S. economy alone,” wrote Ravi Shanker, a Morgan Stanley analyst covering the U.S. auto business. Global savings? Somewhere in the neighborhood of $5.6 trillion.
IF IT ONLY HAD A BRAIN
How self-driving cars will get their smarts
Danny Shapiro was walking around the Frankfurt auto show with a bomb in his valise. The senior director of automotive at Nvidia in Silicon Valley showed it to me: a bristly motherboard about the size of an iPad, known as the Drive PX, that will upend the auto industry. It’s built around two central processors, each as powerful as the fastest supercomputer of a few years ago. According to Shapiro, some version of this technology will give cars Level IV autonomy—the ability to operate independently of humans.
The Drive PX interprets sensory data and builds a three-dimensional model of everything that’s going on around the car, allowing it to distinguish between, say, an ambulance and a FedEx truck, and respond appropriately.
“It can read street signs,” Shapiro says, “and detect lane markings, and anticipate when a pedestrian is going to come out onto the road. And when it sees something it doesn’t recognize, it can record that image, and then transmit it to the data center so it can get added to the next software update.”
The process, called “deep-learning,” is modeled on the human brain. “Think of it as a child learning the vocabulary of a foreign language,” Shapiro says. “As you put more information into the system, it’s going to keep getting smarter and smarter.” –D.N.
You may be wondering, back here in 2015, if the auto industry is worried about shared mobility. Doesn’t it spell declining sales? It could. But in a mature market like the U.S. turnover will remain fairly stable. What would change is the number of passengers that passed through every vehicle—including a vast untapped market that doesn’t drive today. “Level 4 AV technology, when the vehicle does not require a human driver, would enable transportation for the blind, disabled or those too young to drive,” says the Rand Corporation in a report on the subject. “The benefits for these groups would include independence, reduction in social isolation, and access to essential services.”
These same benefits would return mobility to millions on the margins, including the elderly, the working poor and those who have lost their driving privileges due to a criminal record. (It’s not hard to see the throughline between autonomy and the hobbling economic effects of mass incarceration.)
In August 2015, Morgan Stanley nearly doubled its price target for Tesla, to $465 per share, based on an analysis of Tesla’s so-far secret shared-mobility plan. “We view this as a business opportunity,” wrote Morgan Stanley analyst Adam Jonas, “[that could] more than triple the company’s potential revenues by 2029.”
And, far from funneling consumers into fleets of lustless electric drones, autonomy could have the opposite effect. Immersive-connected consumers will be able to draw from a vast and constantly replenished motor pool of shared vehicles—dune buggies, pickup trucks, German luxury sedans—with little or no notice, a cast of automotive avatars.
At this point a fair reader might wonder if I have ever been to America. The notion that we as consumers will forgo the awesome pleasures of the automobile—the privilege, the mobility, the identity—to share vehicles is, I grant, unfamiliar.
But America’s much-sung-about love affair with the automobile has grown cold. Rates of motor-vehicle licensure are already plummeting among young Americans. The obligations and costs of transportation—an average 17% of household budgets—are driving them out of automobility altogether. And enthusiasm for automotive culture is waning too, as the empty seats at Nascar events attest.
Personal-vehicle ownership isn’t going away. Some people will own and cherish cars. But those people and their cars will be considered classics. Rates of ownership will decline, an artifact of an era of hyperprosperity and reckless glut. Twenty-five years from now, the only people still owning cars will be hobbyists, hot-rodders and flat-earth dissenters. Everyone else will be happy to share.
FIND THE ORIGINAL AT: http://www.wsj.com/articles/could-self-driving-cars-spell-the-end-of-ownership-1448986572