"Alexa, pull the car around," you say as you finish your last sip of coffee. You walk outside and the car is waiting. The door opens as you approach; you hop in and you’re off. Traffic is as light as it is every morning, rush hour being a thing of the past. "You’re right on schedule," Alexa assures you. Perhaps you catch up on your reading, or just kick back and enjoy some in-car entertainment. Put your makeup on, eat—anything you used to try to pull off while driving can now be accomplished at no risk to you or anyone else. If you’re feeling nostalgic, just press the manual override button and take the wheel. Your vehicle drops you off, then whizzes off to park itself or pick up another passenger...
Whether you can envision this scenario or not, many of the world’s most influential companies are pouring millions into making it a reality.
The proliferation of technology
The automotive industry has reached a critical juncture, with new technology putting pressure on generations-old companies. For some, the convenience of owningacar has become the convenience of not owning one. Sleek lines and plush leather interiors are out; high tech is in. According to J.D. Power’s 2016 US Tech Choice Study, 59 percent of Gen Y vehicle owners would be interested in fully automated vehicles, and 32 percent would pay $3,000 or more for the technology. Furthermore, simple wireless device connection, smart parking, and predictive traffic are among J.D. Power’s top 10 most-desired technologies.
Millennials have now gone mobile in more ways than one, and automakers are fighting to maintain—and, in many cases, rethink—their brand’s "cool." As venture capitalist Marc Andreessen has said, "Right now, the phone is an accessory to the car, but pretty soon the car is going to be an accessory to the phone." Already, cars have become a fast-growing part of the US wireless industry, with AT&T reportedly connecting them to its network at twice the rate of tablets, according to Bloomberg.
From vehicle-to-vehicle communications to over-the-air software updates à la Tesla Motors, connectivity is the new must-have feature. With its advanced sensor technology, the connected car will generate enormous amounts of data on everything from location and driving behavior to a vehicle’s vitals such as oil temperature, cruising range, and tire pressure—all of which will enable the creation of new products and services that improve convenience, safety, cybersecurity, and vehicle maintenance. Not to mention, drivers will be better informed by this new driving intelligence.
Selling transportation as a service
At CES 2016, Ford Motor Company unveiled FordPass, a new service that marks the car company’s embrace of mobility. "FordPass is really about listening to people’s needs and developing ways to help them move better," said Ford President and CEO, Mark Fields, in a press release about the new service.
Part of the automaker’s new Smart Mobility initiative, FordPass improves the owner experience by letting users reserve parking, find restaurants, get special offers, use concierge services, schedule maintenance, and check their accounts with Ford Credit.
The program is the most comprehensive example of the way traditional car companies are transitioning into something akin to lifestyle brands, centering around apps and shifting toward service-oriented business models. Soon we will see a variety of revenue-generating touch points designed for connected vehicles at gas stations, convenience stores, electric charging stations—and even within the vehicles themselves via contextual and location-based ads fed through infotainment consoles, or promotions brands can now pin on Uber’s maps.
Drivers will be able to make purchases at what will essentially be an app store on wheels through a connected car wallet. Alibaba, for example, has entered the market with a smart car that lets users pay for parking, gas, and coffee using its service Alipay—the idea is to make an intelligent operating system "the second engine of cars," with data as "the new fuel," as Dr. Jian Wang, Chairman of Alibaba’s Technology Steering Committee, told The Verge.
Multimodal transportation options
Part of this service-oriented shift requires automakers to think more holistically. Certainly, disruption by ride-sharing services has forced carmakers’ hand, but they are now paying more mind to service design and considering all types of transportation. Aware that the simple profit motive of How can we sell the most units? will no longer suffice, they are either investing in or building out their own car-sharing services to explore strategic partnerships, share intellectual property, and work toward creating autonomous fleets.
This attempt to build a portfolio of multimodal transportation options—buses, commuter trains, subways, or car sharing—and sell them through a membership model will allow consumers to purchase "packages" that match their individual needs. Mercedes-Benz parent company Daimler’s all-inclusive mobility services in Europe will soon launch in several US cities.
From car sharing to self-driving
While ride-sharing companies such as Uber and Lyft are undeniably challenging the notion of ownership, their growing ubiquity is way bigger than the sharing economy and has wider implications: They are actually providing a springboard for a self-driving future.
What remains to be seen is whether the transition occurs through autonomous car owners renting their vehicles to others, as Tesla Co-founder and CEO Elon Musk believes it will, or is facilitated by the already established networks of ride-sharing fleets. Lyft Co-founder and President John Zimmer hopes for the latter. In "The Third Transportation Revolution," a manifesto published on Medium.com, he predicted, "By 2025, private car ownership will all but end in major US cities."
Fleets of autonomous cars offer a cheaper option for consumers because drivers would no longer have to pay retail for fuel, maintenance, parking, and insurance—those expenses could be consolidated, with the savings passed onto passengers.
Uber has been making progress in this direction lately. The company has partnered with the town of Summit, New Jersey, to offer commuters $2 rides to and from the train station (which has limited parking), and it already has an autonomous fleet in place in Pittsburgh. Meanwhile, self-driving buses have hit the streets of Europe, and there are big plans for major industries to implement self-driving vehicles.
Commercial shipping—long-haul trucking, for example—and delivery in general are ripe for disruption.
Preparing for a third transportation revolution
With major carmakers—Audi, BMW, Ford, Tesla, and Volkswagen—committed to releasing fully autonomous cars, some as early as 2017, it’s clear that self-driving cars are fast approaching, and as with the advent of railroads in the 19th century and interstates in the 20th, we are on the brink of a major paradigm shift.
Moving forward, new opportunities will emerge for product and service designers to create automotive technologies that will become ingrained in our daily lives, integrated with the world around us, and used habitually to facilitate much more than transportation. The race is on, and no one—be they traditional car companies, startups, or stalwarts of adjacent industries—can afford to hang back. Widespread societal change will be slow going, of course.
Government will play a major role, serving as the pace car by addressing legal issues and regulations in the process. Fostering consumer trust in the safety of this technology will be essential. Those posting videos of themselves fully reclined in the passenger seat while their Tesla’s Autopilot mans the wheel are perhaps a little too trusting. The National Motor Vehicle Crash Causation Survey, conducted from 2005 to 2007, found that the critical reason for 94 percent of crashes could be attributed to the driver. The question of liability in any accident involving autonomous vehicles will always loom large, and insurance will likewise be tricky, which is why Tesla is beginning to offer its own plan.
Physically reshaping cars & cities
The massive cultural changes already under way will significantly alter automotive design and urban planning. Many lament these impending changes, elevating the automobile as the ultimate symbol of freedom in America. But the cars of tomorrow, bearing only a faint resemblance to those of today, will afford substantial benefits. The combustible engine, steering wheel, and gear shifters will become relics, freeing the car of weight constraints required for fuel efficiency and design and creating more room inside the cabin. Seniors and those who can’t drive will experience mobility they were previously unable to enjoy. And drivers could become passengers, gaining them more free time.
Moving away from private ownership, which currently averages about $8,500 per year, will redesign our entire urban fabric. Since the average vehicle is used only 4 percent of the time and parked the other 96 percent, according to the transport blog Reinventing Parking, fewer cars will sit idle and empty. We will be able to reclaim public spaces from them, as has already been done in such cities as New York and San Francisco. With vast environmental and economic forces at play, this will be a drastically different world to which the automotive industry must adapt and find its role. "A world," Zimmer wrote in his manifesto, "built around people, not cars."
