Autonomous Cars – Part 3

How will autonomous cars change current business models?

A car lot is a proof of the inefficiencies we have in our cities. It’s really poor management of available resources. A car is pretty expensive and yet we accept that we leave the car unused 95% of the time, occupying huge areas inside and around our cities. Instead, these parked cars could be used by others, in theory. In practice, it has been difficult to find ways on how to share cars. Taxis and carpools are some examples where cars are shared but they are either too expensive or too inconvenient to fit most people.

When the car can come to us instead of us walking to the car it will be easier to share cars with other people. This will encourage services and business models where cars are being shared. Most of the future’s business models probably already exist today but we can expect a shift from ownership to pay-per-ride and subscription models. Special vehicles, like trucks, vans (with tools in them) and business-branded vehicles will still be owned by companies. And there will probably be a market for luxury cars being sold to individuals. But most people will not own a car because they will benefit from the added flexibility of being able to ride different cars better suited to each situation. During the phase where manually driven cars share the roads with autonomous cars, we will probably see a big second-hand market for manually driven cars. As autonomous cars will be relatively cheap to use the prices for manually driven cars will probably take a dive, especially attracting the lower class (see Part 4, Class issues).

Cars being shared with many people will age fast. This, in turn, can open up for new business models where new vehicles are priced differently than older vehicles.

How can new business models change the cars?

Specialisation is the future

When we buy a car today we make a compromise between a car that can take us to work as well as to the grocery store while at the same time be capable enough to take us to other cities or other places that are more long distance. Consumers usually have to buy cars being jack of all trades, master of none. Such a compromise is done because we feel that we need to own the car in order to have instant access to it without having to pay expensive taxi fares for every ride. Autonomous cars change those conditions by being very accessible (you can order it to your door) and still not very expensive (see Part 2, Cost). This means that autonomous cars don’t need to be as generic as the current cars. We will see cars being built for a single purpose; for instance a long distance car with sofa, bed, and table or a very compact work car where you can sit and work on your way to your client. Cars might not even look like “cars” anymore, looking and operating very differently from each other. Maybe the concept of a car will change completely and we won’t even say car anymore?

I asked my 9-year old daughter to draw a typical car

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