Autonomous driving will accelerate a trend away from ownership that's already begun.
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By Stephen Edelstein, The Drive
Talk of self-driving cars is unavoidable at this point, and it almost always centers on autonomous cars being used as shared vehicles. Whether it's ride-hailing services like Uber and Lyft, or putting your local pizza delivery person out of work by having a Ford Fusion do the job instead, it's more or less assumed that the first self-driving cars won't be owned by individuals. There's a reason for that.
Before they give up on driving, many current drivers may give up on car ownership. The cost of maintenance, fuel, and insurance, not to mention finding a place to park, can be tiresome no matter one's level of enthusiasm for driving. And for the first time ever, the average person has viable alternatives to vehicle ownership. Self-driving cars may just finish the job.
"The transition to business ownership will happen long before the transition to autonomous [driving]," Nicholas Farhi, a partner at consulting firm OC&C Strategy Consultants, told The Drive. It's already happening, Farhi noted, as many drivers lease their cars rather than buying them outright. Automakers are also launching subscription or car-sharing services that give consumers access to vehicles on demand. Given the choice, people will rent instead of buy, Farhi believes.
"The average car is about four percent utilized," Farhi said, meaning it sits idle the vast majority of the time. Sharing services increase utilization of vehicles, whether they're autonomous or not. This model also lets people "choose the right car for the right use case," Farhi noted. Cadillac's Book subscription service lets customers switch a CT6 for an Escalade when more space is needed. In New York City, at least, users of GM's Maven car-sharing service can choose a Chevy Cruze or a Tahoe, depending on their needs.
If these services can be operated on a large enough scale, they could be a major inducement for consumers to give up their own cars. Ride-hailing services like Uber and Lyft can also do this, but they are most effective within city centers, where people tend to not want to drive anyway. Car-sharing and subscription services give people a way out of cities—exactly the kind of thing many urban dwellers keep cars around for exclusively.
Tesla has said it will allow individual owners to rent out future self-driving cars for a ride-hailing service, but Farhi believes that will be a "niche" business. Individual owners won't want to deal with maintaining a car that is used not only by them but numerous other people as well. Imagine if your daily driver was also a taxi.
You may say that none of this applies to you. You may say that they'll pry that steering wheel from your cold, dead hands. But if the majority of people stop buying their own cars and opt for shared vehicles instead, fleet operators will become the most consequential customers. That means automakers will start designing cars for shared rather than individual use.
Volkswagen is reportedly in talks with Chinese ride-hailing giant Didi Chuxing to design cars specifically for the Uber rival's services. The specs allegedly requested by Didi aren't very appealing; a low top speed and an emphasis on luggage space are said to be part of the design brief. Autonomous cars will likely settle the matter once and for all, but even before they arrive, sharing services could make the car market a lot less hospitable to driving enthusiasts.
Talk of self-driving cars is unavoidable at this point, and it almost always centers on autonomous cars being used as shared vehicles. Whether it's ride-hailing services like Uber and Lyft, or putting your local pizza delivery person out of work by having a Ford Fusion do the job instead, it's more or less assumed that the first self-driving cars won't be owned by individuals. There's a reason for that.
Before they give up on driving, many current drivers may give up on car ownership. The cost of maintenance, fuel, and insurance, not to mention finding a place to park, can be tiresome no matter one's level of enthusiasm for driving. And for the first time ever, the average person has viable alternatives to vehicle ownership. Self-driving cars may just finish the job.
"The transition to business ownership will happen long before the transition to autonomous [driving]," Nicholas Farhi, a partner at consulting firm OC&C Strategy Consultants, told The Drive. It's already happening, Farhi noted, as many drivers lease their cars rather than buying them outright. Automakers are also launching subscription or car-sharing services that give consumers access to vehicles on demand. Given the choice, people will rent instead of buy, Farhi believes.
"The average car is about four percent utilized," Farhi said, meaning it sits idle the vast majority of the time. Sharing services increase utilization of vehicles, whether they're autonomous or not. This model also lets people "choose the right car for the right use case," Farhi noted. Cadillac's Book subscription service lets customers switch a CT6 for an Escalade when more space is needed. In New York City, at least, users of GM's Maven car-sharing service can choose a Chevy Cruze or a Tahoe, depending on their needs.
If these services can be operated on a large enough scale, they could be a major inducement for consumers to give up their own cars. Ride-hailing services like Uber and Lyft can also do this, but they are most effective within city centers, where people tend to not want to drive anyway. Car-sharing and subscription services give people a way out of cities—exactly the kind of thing many urban dwellers keep cars around for exclusively.
Tesla has said it will allow individual owners to rent out future self-driving cars for a ride-hailing service, but Farhi believes that will be a "niche" business. Individual owners won't want to deal with maintaining a car that is used not only by them but numerous other people as well. Imagine if your daily driver was also a taxi.
You may say that none of this applies to you. You may say that they'll pry that steering wheel from your cold, dead hands. But if the majority of people stop buying their own cars and opt for shared vehicles instead, fleet operators will become the most consequential customers. That means automakers will start designing cars for shared rather than individual use.
Volkswagen is reportedly in talks with Chinese ride-hailing giant Didi Chuxing to design cars specifically for the Uber rival's services. The specs allegedly requested by Didi aren't very appealing; a low top speed and an emphasis on luggage space are said to be part of the design brief. Autonomous cars will likely settle the matter once and for all, but even before they arrive, sharing services could make the car market a lot less hospitable to driving enthusiasts.
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