Self driving cars are not a reality yet, they are still drawing the attention of people around as they drive. In the next decade they might become more usual, although I would put my bet in the decade following the next one, in the 2030ies.
Tesla has announced several times that each car they are selling today is a potential self driving car and that a software update will make this happen when the regulatory framework will be in place.
Although we still have to experience a world with pervasive self driving vehicles all observers agree that it will be a quite different world with different rules of the game:
- the whole car manufacturing sector will be disrupted and will have to adapt to new value propositions. As an example it will be tough to market a car for its acceleration or it “amazing” speed, since you will not experience either. Because of this value change new players may emerge, those having a grasp on what users are likely to appreciate as they spend some time in a car they no longer drive.
- vehicles will be seen more as a commodity having a much less personal status. The number of cars will likely decrease, as much as 40% in some areas, and shared vehicles services will increase.
- smart cities will orchestrate the traffic assigning slots to vehicles and you will be shuffled from A to B under the direction of some unknown orchestrator.
- as cars morphs into commuting utilities passengers will make use of the commuting time for a variety of tasks. Some fear that the employers may start to consider commuting time as a working time, will expect people to hook up to videoconferencing tools that will transform the vehicle into a fully equipped office space, possibly leveraging on augmented and virtual reality devices.
- self driving vehicles will create some new jobs, but the overall expectation is that there will be a job loss (less cars, less drivers …), as many as 25,000 jobs lost every month in the US starting in 2030 (see graph)
Just recently we have seen a significant step forward in bringing self driving cars to market, and it is not a technological one: Waymo has announced a partnership with an insurance start up, Trov, to provide coverage in case of an accident. The insurance will cover passengers’ medical expenses and damages to property with no increase in the insurance premium. Trov is funded by the venture capital arm of Munich Re, one of the largest reinsurance companies in the world. Are we seeing the first signs of a repositioning in this market? Notice that self driving cars will be less prone to accidents, hence selling the insurance at the same price for a manned vehicle is creating some interesting revenues to the insurer…