Tuesday, December 18, 2007

Driverless cars

Driverless cars have caught the imagination for years; mostly the conversation turns to advanced technology (satellite navigation, laser collision detection, automatic parking), but for me it's even more interesting to guess how technology might turn business models upside down.

Once cars can drive themselves, taxis get far cheaper. That's because you're not paying a taxi driver's wage. Far more people will take taxis, which will mean there are more taxis on the roads, which in turn will shorten taxi waiting times, which will attract even more people to take taxis - a virtuous circle.

I don't mean to imply that no one will drive cars or own them - there's satisfaction and freedom in driving on open roads that can't be beaten. But perhaps not for the weekly slog to the shops, or the commute, or the evening out, or the occasional traveler.

What happens when a significant proportion of cars are driverless taxis? The rise of the taxi company - massive customers for Motown with the power to significantly negotiate prices down. What's the natural response? Motown buys the taxi companies. They will no longer sell machines - they'll sell the service of transporting people, it'll be Ford taxis versus Toyota taxis.

Of course, for the next decade at least, we'll see only "assisted driving", not "no driving" - better aids to navigation, steering, breaking, and cruising to help the driver concentrate on reacting to the road.

But the auto industry will surely learn the meaning of the phrase "disruptive innovation".


Unknown said...

I have been following your posts for couple of months. And read through the previous posts too. Keep up the great posts. They are really top notch but in plain language.

Chris Jay said...

Thanks karoshi - great to hear!

Unknown said...

Kindly watch this video of Chris Anderson talking at NOKIA world, if you haven't already.

It' from this post here

which in turn is from here