Are AV’s on hold? Should they be?

OP-ED by A. Bunch

There’s so much we could say on the topic. Actually, there’s a lot we have said on the topic. The opinion above is interesting and worth viewing.

I notice these city tests always take place in a special zone of a city that’s pretty straightforward. More than that, they’re also specially mapped. That means that they don’t just download the same navigation you or I do, they specifically vet the maps in that zone. This means even if AVs start taking over certain city zones, the outlying areas will still require human assistance.

Why is that? Because things happen that haven’t been specifically foreseen and accounted for by programmers. Will these zones be the challenging downtown areas with heavy pedestrian use that TNC (rideshare) drivers already hate to navigate? NO! Not at all. GPS is notorious for dropping when the signal is blocked by skyscrapers.

The goal of all automation should be to replace the types of routine work that people don’t like to do and therefore grow bored and unproductive at. But if humans will still be needed for rural areas and inner-city areas, what’s the point of automation?

Crash avoidance systems, automated braking, and automatic transmissions reduce driver fatigue but it seems like the challenge of replacing drivers entirely may not be worth the billions some folks are willing to spend to do it. Will automakers be able to train their machines to recognize a human in a crosswalk? I’m sure they will. Will it justify the money they’re spending? Only the future will tell.

Self-Driving (AV) Car First Fatality

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Op-Ed by Managing Editor of the Kicker Blog A. R. Bunch

We at the Kicker, have waited a couple days to comment on this story because it’s important to acknowledge the loss of life before engaging in what will no doubt be a ruckus brawl of a debate regarding the fall out of the event. However, we’d be remiss if we didn’t respond to it at all.

Last Sunday, a 49-year-old Arizona woman was struck by one of Uber’s autonomous (self-driving) vehicles while pushing her bike across the street outside the crosswalk. The collision seems to have occurred at roughly the speed limit of the road, with no sign that the AV attempted to slow down.

The is a myriad of legal viewpoints on who should be held responsible. The owner of the vehicle? The person behind the wheel, though not driving the vehicle, Uber, the state of Arizona!? Seriously. Was this a workplace accident? Was it vehicular manslaughter? Without being a lawyer, we can’t answer those types of questions. But let’s talk about another question that seems relevant.

Who could have predicted such a tragedy? Frankly everyone. I don’t know that anyone didn’t expect it to happen at some point. Cars hit people. Here at the Kicker we’ve also warned that self-driving cars are further from reality than we’re being told for one big reason. Mindset!

There’s an inevitable transition happening in vehicles away from mechanical and toward technological. We’ve covered it in several posts. But we’ve hit a tipping point where manufacture and design is shifting away from the car industry and toward technology companies. The leaders of these different industries have radically different approaches to development and often for good reasons.

In the late 1960’s Ford leadership came to their designers with a unique and exciting challenge–design a new subcompact car that weighed less than 2,000 pounds and bring it to market in under two years, for less than $2,000. pinto-699303_1920

The met that goal and the resulting Ford Pinto. burst into flames when struck from behind at low speeds. It didn’t need to. The issue was brought to the attention of decision-makers, but the suggested fix was a couple pound hunk of hard plastic that cost $11. It put the car over cost, and overweight. The controversy came when the public discovered that Ford had run a cost-benefit analysis to determine how many people would be injured or killed by not improving the design and decided it would be cheaper to settle lawsuits than to prevent them.

In other words, there was an acceptable number of people who could be killed or maimed if it let them meet their goals and profit margin. The resulting outcry tot Ford a valuable lesson–one which technology companies have yet to learn.

Ever buy a new computer and find it runs horribly? Ever find it buggy or insecure from hackers? Ever think, these people are releasing their beta version and letting us debug it for them? Well, that sort of thinking won’t be very compatible with the commuting public. Especially when they’re touting how much safer we’ll all be when their product is behind the wheel.

I’m going to make a prediction about how these new laws around AV’s are going to shake out. 100% of the fault for anything your car does will be blamed on you–the official operator of the vehicle. The only thing the law can hold accountable is the driver. That means insurance rates for people with AVs may be higher until actuaries determine if they are actually safer. It means, you can’t just sit back and watch TV while your car drives you to work, which could make the car less attractive to buyers and less attractive to companies like Apple who are jumping in with both feet because AVs are the next iPod.

If the sudden craving doesn’t create demand then the irrational exuberance driving us to rush AVs to market will slow and we can actually test these cars before they get on the road instead of just killing people and debugging later. So it’s a self-correcting process. However, it does mean two things–we were right that we’re more than 5 years away from self-driving cars AND no one is going to realize that until it kills someone.

This tragedy was avoidable. There is no acceptable number of people who can be injured or killed in the process of helping companies hit their financial goals. I hope that everyone involved in designing and testing AVs reflects hard on this tragedy, and I hope that the lawmakers of AZ consider their role in it.

Rest in Peace Elaine Herzberg

Until next time–this is A. R. Bunch hoping you stay safe on the roads.

Blindspot in Tesla Volvo AV’s AI

workshop-2104445_1920A recent CA accident involving a Tesla Model S highlights a glaring bug in the automated driving system. Volvo admits their self-driving function might well have the same bug.

The blind spot is ironically right in front of the car and happens when a vehicle the autopilot is following suddenly dodges out of a lane that’s become obstructed leaving the automated vehicle to acquire a new car to tail. As with the accident in California, the Tesla may continue at the same speed or even attempt to resume the previous speed without detecting the obstacle–in this case an enormous firetruck with flashing lights parked while it helps save lives.

Thankfully no one was hurt, and you could draw the conclusion that the human being is still the pilot of the car even if the car has an enhanced cruise control engaged.

This notion is further underscored by a recent DUI given to a San Francisco man who argued that his car was guiding him home. Much as with cruise control the person behind the wheel is responsible for the operation of the car. It seems obvious, but with all the press from the AV industry, you’d think that AV’s are vastly superior drivers capable of covering your shortcomings in all scenarios.

The reality is that you can delegate power but you can’t delegate responsibility. We might hope that the enthusiasm of those developing this technology would be tempered a little by this thought and stress that, much like an automatic transmission makes driving simpler, automated driving is not actually autopilot and even planes that have autopilot are landed by experienced pilots.

Is The Car In An Identity Crisis?

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OP-ED from across the pond by Paul Wimsett

People see a car as a way of getting from A to B, a status symbol or an extension of personal tastes and character. What people tend not to see is a computer.

Looking at the computer it did have a mechanical history, first made of cogs and gears then bulbs and transistors. It doesn’t take much to imagine the pipes and chambers under the hood as the early beginnings of a computerized device. As more people get AVs (autonomous vehicles) we may have to change how we see the humble car, I feel.

The idea of AVs seems to be growing in popularity even if it seems unlikely to become a reality any time soon. It seems that AVs will cause accidents in the early days, but each country’s legal system will have to determine if the fault is with the driver or the programmer? I also feel that a certain amount of driving is culture. In some places, everyone runs amber lights or stops at crosswalks and other places they don’t. We grow accustomed to how we drive locally. As a motorist, you can’t follow the habits of a fellow driver who isn’t even in the driving seat. We’ll have to learn what the computer does or doesn’t do and it won’t match what the other human drivers are doing. It’s a different way of driving completely.

This post, however, isn’t about how safe or unsafe the driverless car is, merely how our relationship may change. My feelings are that a car will stop being a personal possession. It may well become a family-owned possession, maybe passing down generations if the car is expensive enough. It may also mean that cars are harder to buy and keep their values more, as houses do today.

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How do cars not being personal change their meaning? Well, there may be a lack of stickers and go-faster stripes. This is a shame as it so much part of American society, including political interest. However, if an automobile is no longer a personal thing, this will alter, I feel. The interior of the car might become neutral and the form of the interior less some kind of hierarchy where the driver is in charge.

Okay, will we be driving by committee? No, but even now the driver shares the load with a navigator. At least for now (perhaps, fortunately) folks in the back seat cannot physically control the vehicle, but that could change.

This will essentially change the way cars are marketed too. No longer just to the breadwinner and now more to the family as a whole. The idea of a car being a “macho-wagon” and “chick-attractor” may alter as the automobile changes its character.

Less obviously, how women see cars may also change. Even with a female “driver” there may be more neutral colors, fewer turquoise, and other pastel colors. (It seems these days women prefer the color green to other colors, (https://www.thoughtco.com/what-are-womens-favorite-colors-1077397). The car may be in future designed with all the family in mind.

Does this mean that a car will be more of an investment? It would seem so, IHS says that a self-driving technology will add $7,000-$10,000 to the value, at least up to 2025. Even now, cars can be collateral against a loan. In the future will expensive cars be “remortgaged” and become an income source? It doesn’t seem likely at the moment, but at a time of fluid change, who knows?

It seems to me that drivers who drive themselves will become the outsiders, the people who chose the cheaper car. As stated above they will also find it harder to drive in a world of non-drivers. So what if you know a three point turn? No one else does. That information will not be valuable anymore.

The predictor of the future will no doubt get many things wrong. Maybe the world of the driverless car will always be considered unsafe except in arranged convoys or it will never happen at all. We can never totally predict what the future might bring.

Will Self-Driving Cars Really Make the Roads Safer?

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Americans have traditionally been the pioneers of futuristic development. No wonder, the idea of the driverless car originated here. But when an automated Tesla car crashed last year, resulting in the owner’s death, it raised many eyebrows. Elon Musk remarked on this accident that people are killed because negative writing by journalists dissuades them from using automated vehicles.

Do we really want automated vehicles on our roads?

A survey by Pew Research Center found that 87 percent Americans always want a person behind the wheel, 39 percent never want to ride in driverless cars and 30 percent think roads would actually become unsafe with self-driving cars. (These numbers were probably higher if they saw the movie Fast and Furious 8 since that movie had an awesome high tech carjacking scene.

But if these automated cars drive like Bumblebee does in Transformers we should be good to go!

However, there are many self-driving enthusiasts out there who believe the change is inevitable. They imagine a world where the streets are safe because of reduced accidents and zero human error.

Companies like Tesla, Alphabet, and General Motors are investing billions in funding research and trials to ensure that automated vehicles become a part of our future. Musk is one of the foremost champions of driverless car technology. He envisions a time when even old and infirm can travel independently, and he looks forward to the era when humans can embrace their full potential on the roads.

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The automotive world shook after the Volkswagen emission scam emerged. Even companies like Toyota and General Motors (this is the company that basically stole $50 billion from the taxpayer and still owes us $16 billion) had hidden things from consumers regarding safety defects. These incidents have left a sense of mistrust in the general public.

However, experts claim that people will come around. After the initial mistrust and naysaying, people always embrace change. However, people might need a little more time with the self-driving technology because the trust is still weak and new shocks involving data breach and software hacks have occurred.

Furthermore, the automated car precision is not good enough to work on roads with low lying tree branches, bridges, as well as roads with difficult to see lane markings.

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What about the law?

Technology and auto lobbyists have been busy engaging with the members of Congress. Bipartisan bills have been proposed, which will make it easier for automated cars onto the streets. The safety exemptions, which involve the performance of steering wheels and other important parts such as brakes and airbags, are just some of the concerns.

A bill was recently passed which lets manufacturers of automated vehicles sell 25,000 vehicles a year without meeting safety guidelines. And the numbers increase to 100,000 vehicles annually after the first three years.

However, Senate Commerce Committee approved a bill which has limited the cars to 80,000 and made a safety evaluation mandatory before relaxing safety exemptions.

Another issue is the underfunding of the National Highway Traffic Safety Administration. The department will have to write new rules for these automated cars while overseeing the industry as a whole even as it struggles for more resources since America is now over $20 trillion in debt. The government has proposed a cut of 7.5 percent or $24 million in funding to this department in fiscal 2018 because America needs to get its spending under control.

Benefits

An automated vehicle future does offer major benefits; the primary being an efficient utilization of time. People that live far away from their work would not be punished as much since they could use that time now to sleep or even get some work done before they arrive at their desks.

Furthermore, traffic algorithms will be easier to predict when all cars on the road are automated. Elon Musk, too, has a point when he claims that streets would be safer with some improvisations and tweaking of existing safety measures.

AVs Autonomous Vehicles (part 10?)

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Progress toward Autonomous Vehicles So Far:

2016 Qualcomm’s purchased NXP Semiconductors for it’s chip tech for AVs ($39 billion)

2017 Intel purchased Mobileye for its AV sensors ($15 billion)

2017 GM purchased Cruise Automation for AV tech patents ($1 billion)

Other companies with AV projects…Apple, Baidu, Google/Waymo, Intel, Tesla, and Uber. Experts are projecting a $7 trillion market for AVs.

 

Predictions about when we can expect them, range from as early as 2019 (Morgan Stanly) to 2032 (ABI Research). The National Highway Trafic Safety Administration predicts 2025. However, there’s a big push to make it by 2020: NuTonomy, Ford, Audi, Nissan, Toyota, Volkswagen. Uber ex-CEO said 2030.

The reason its become such a holy grail is based on a prediction that they’ll be more reliable than humans at driving safely, and allow more cars on the road per mile, traveling faster, which equates to less need to expand or improve infrastructure.city-1487891_1920

Critics point out that while AI’s might drive more consistently that doesn’t always equate to safer, and of course if you need to spend a bunch of money to say, equip every bridge, crosswalk, and road sign with a transmitter broadcasting don’t hit me, that negates the savings on infrastructure.

There’s often a disparity between the potential a new technology represents and how the market responds. Look no further than Electric Powered Vehicles (EVs). President Obama predicted one million EVs driven by 2016 and missed it by 700,000. Look at the initial launch of the personal computer. A lot of Apple 2e’s sat next to kitchens being the world’s most expensive Rolodex/recipe holder until the internet came along and gave them purpose.

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And who do we hold responsible when a crash does happen? The car owner or the programmer that created the algorithm that told the car it’s okay to run over your poodle if it avoids a 27% chance of concussing a passenger? States like Oregon require an attendant to pump your gas for you in order to create jobs. Will the threat of mass professional driver layoffs cause legislature to throttle the spread of AV’s? What happens when some states okay AVs and others don’t. I private owner/driver can simply engage or disengage the feature during travel, but if you’re a package delivery service trying to save money paying CDL drivers for long haul, do you drive around certain states in order to use driver-less trucks?

What about mapping every square inch of the US? Most people assume that navigation has been on the market long enough that virtually everywhere is mapped. But companies like Uber are buying whole other companies for their mapping data. Not how they map but the maps themselves. Road’s change, constantly and we don’t need AVs driving through a building that used to be a road or going the wrong way on a one way street because its maps are 6 months out of date.

Take for example a simple thing. GPS navigation will take you to the front door of a local restaurant where you can get out and walk in. Except that the restaurant has it’s front door on the street instead of the parking lot. So the car will stop in traffic for you to exit because it’s at it’s destination. What happens when a teenage girl hails a ride from a rides hare company and the GPS puts the car in the alley behind her apartment complex? When she walks to meet it and is attacked is the ride share company going to compensate her?

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These aren’t hurtles that can never be overcome, but when a programmer says he’s six months from producing a program that doesn’t mean your seven months from seeing it on store shelves. A lot has to happen in a lot of areas a programmer wouldn’t think about because it’s not his/her responsibility.

Another similarity to electric vehicles is that what makes sense in one setting doesn’t in another. Dense populations in highly developed areas may be early adapters to EVs and AVs where they’d be less attractive in rural Texas (for example). When a technology executive does an interview and says we’re only a year away from having AVs roaming the road around you ask yourself if she’s more intimately familiar with the programming capabilities than the legal implications and if she more likely lives in a dense urban area or a ranch in Montana. Could there be some paradigm blindness going on?

Perhaps one of the most telling indicators is a 2016 Kelly Blue Book Survey. Among EV owners only 53% said they’d re-buy the same car (31% if it only plugged in) compared to traditional engine vehicles where 82% would re-buy. 74% of Americans surveyed felt that AVs weren’t safe. Think about that. Imagine for a second that three out of four people felt you were less likely to die from a crash if you didn’t wear a seat belt. That’s a significant PR problem for companies that hope to sell $7 trillion worth of these cars.

Here’s an aspect seldom covered when pondering the topic, you can’t buy a new car today for less than $8,000 because in part that’s the cost of building it to modern safety standards. Even if the law requires cars be able to drive themselves how much more will people pay for the feature? We actually have some data on this. The Tesla model 3 sells for $10,000 more than cars in it’s class. Certainly Tesla has showed they can sell cars, but Tesla has more going for it than just autonomous driving and it’s not a Traditional Automotive Manufacturer. So you can’t get an apples to apples comparison to establish what consumers are willing to pay $10,000 more for. When surveyed directly they report that their willingness to pay more for automation has dropped by a 30% since 2014 and that they don’t trust Original manufacturers to provide safe AVs to market.

So while most writers on this topic are defending the position that they can get a car to drive itself by a certain date, there remains some doubt as to it’s market viability.

 

AVs (self-driving) & Job Market Impact

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By Andy Bunch

Original Article by Cathy Engelbert &  Scott Corwin

The topic of automation touches every type of job market and where the Kicker Blog is concerned professional driving jobs seem conspicuously next on the chopping block. We’ve covered this topic from both sides of the debate, where the timing is concerned, and concluded that self-driving cars are inevitable but likely not imminent.

Industry expert and LinkedIn influencer Cathy Engelbert has written a great article on the topic based on its impact on the job market and since we’re always scouring the web for people talking about what we’re talking about we’d love to point you at it. For the full article go here. Our executive summary is below.

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Summary:

Automation will impact different job markets differently—there’s no single answer, good or bad. A balanced, fact oriented approach will lead to the most accurate prediction, not the over-enthusiastic or terror approaches that currently dominate the discussion.

Let’s consider a particular case to illustrate these points. When the media cites professions that may decline because of automation, some of the most common are jobs involving the movement of people and goods—trucking, taxis, ride-sharing, and the like. It often makes for good headlines and everyone “gets it” quickly. But the outlook is way more complicated, nuanced, and not necessarily as dire as portrayed.

While roughly 94 Million professional drivers currently answer the needs of moving people and goods, as people work and shop more at home, and cars begin to drive themselves the need for actual drivers will likely decline. However, we have an aging baby-boomer population that will continue to require assistance to live independently. Someone will need to take responsibility for good being delivered long distances and even when city’s become automated it could be years before particularly tricky areas become autonomous friendly. So a whole new industry of driver assistant could pop up. These jobs would require both driving skills as a backup to automation, but also another primary skill, like customer savvy.

If travel becomes cheaper and easier through automation, the demand will rise. This could lead to jobs serving the transportation industry in other ways. Roadway systems could wear out faster-increasing maintenance. Logistics to get people and items to destinations will likely increase. Automation could result in more interesting, less fatiguing labor that in turn causes reduced turn over and more interest in younger workers. This could mean that as the driving workforce loses workers to retirement it gains a lesser number of replacements who stay longer. Since currently there are nearly a million drivers needed it’s not likely that thousands of long-haul truckers will suddenly be out of work, which is the picture shoved at them by media daily.

So the conclusion is that the best predictor of what will happen as driving jobs are automated is the way automation has impacted other areas. A net reduction in the number of workers needed to produce the same output, which is felt heavily in industries that suffer an overall decline and not at all in industries that with growing demand over all. Jobs that are retained require more technical training and skill but are more interesting to do, and less physically dangerous. As a result, there’s no basis to fear going into an industry because the field won’t exist in 10 years. Some workers will need to make a lateral move and others will move up. Still, others will age out and retire. What isn’t likely? That professional drivers will become suddenly obsolete.

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How Close are AV’s (Driverless Cars)?

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“The results of a national survey last year by Kelley Blue Book found that—perhaps unsurprisingly—American consumers are not nearly as excited about the car of the future as the experts are.”

In a LinkedIn article dated August 1st, 2017, Scott Nyquist echoed sentiments of a previous post here on the Kicker Blog.  The LinkedIn article, entitled “why driverless cars might not hit the road so fast,” makes well-researched points that reinforce the conclusion that driverless cars will likely be a part of the future but not in the near future.

Nyquist compares AVs to EVs (all electronic vehicles) in that experts were enthusiastic about them and were quick to predict their inevitable dominance. If the comparison is true then EVs will also not become the norm as quickly as experts predict.

In late 2010, for example, one expert prediction was that by 2013, 200,000 electric cars would be sold in the US, and in 2015, 280,000; in fact, the figures were 96,600 and 119,000, respectively. Carlos Ghosn, the well-respected CEO of Nissan, said in 2011, that by 2016, there would be1.6 million Renault-Nissan EVs on the road; that forecast was off by more than 80 percent. President Obama saw a million EVs on American roads by 2016; the real figure is fewer than 300,000.

Considering the legal and physical blockades that need to be overcome it seems more likely that autonomous cars will become a feature of cars in the future but will be restricted in use much the way current cruise control is. Certain well-mapped zones will open up to them to take advantage of their ability to crowd more cars onto the roads, but other areas that are under construction or too rural to be mapped up to the minute will remain human-required. This balanced, gradual approach will take decades to bring about a total driverless age.

But that’s just an opinion. We’ll just have to wait and see how it turns out.

The Number 1 Consumer Complaint

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By A.R. Bunch

We’ve written several times about the American Love Affair with cars and driving. We’ve also written about a growing trend among younger drivers, who see human error as the major cause of commuter risk and who would gladly let autonomous vehicles do the driving.

Now, according to an article in money watch, there are a few more threats to the American love affair with the car. It’s the number one complaint among consumers.

“1. Auto: Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes.”

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According to who? According to a report from the (CFA) Consumer Federation of America and the (NACP) North American Consumer Protection Investigators, who combined to survey 39 state and local agencies in 23 states about last year’s consumer complaints.

To be fair, the biggest complaints were among used car leases. With low to no down payment and shorter commitments, these programs have become more popular lately, but consumers are not fully savvy to these new programs and the lack of consumer protections afforded leasers when compared to purchasers. Still, dishonest salesmen, misrepresentation of performance capabilities like mileage and handling, and cost of repair play a role in people’s recent dissatisfaction with cars.

If it’s such a source of pain could it cause US drivers to finally separate from their beloved cars? It’s likely to depend on age. The answer is likely to depend on age. When the Kicker Staff interviewed drivers at random the majority of drivers believed that automated driving wouldn’t be able to replace an experienced human driver and would therefore only be “safer” if by law all vehicles were driven by a computer.

One driver in particular, who wished to remain anonymous, claimed to have driven for roughly thirty years without an accident. He believed that a computer could likely outdrive his fifteen-year-old son, and his eighty-year-old mother, but would not trust one more than he or his wife.

Another driver interviewed, who worked at a technology company in Portland, Oregon, suggested that drivers could be retested periodically to retain the best human drivers while potentially weeding out commuters who’re better off letting another person or robot drive for them.

The Kicker staff is all for treating a driver’s license as a privilege and not a right. So in the end, the answer to the question of the love affair with driving, no one answer fits all. Some commuters can’t wait for the more economical option to owning their own vehicle that’s also more useful than mass transit. Others will let go of their personal vehicle when you pry their cold dead body from it. Lucky for us all that we’ve got a little time to prepare for a transition.

Will You Own the Car of the Future?

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Tim Higgins wrote an article for the Wall Street Journal (June 20, 2017) entitled, “The End of Car Ownership.” If you recall our article about the coming Apple Car then you’ll recall that we’ve mentioned the theory before. While it’s hard to imagine an end to the American love affair with owning a car, Higgins makes a compelling case.

Everyone, including Higgins, is crediting self-driving cars and ride-sharing companies like Uber and Lyft with the coming shift. It seems more likely that both of these are symptoms of a larger change in how we do things. But since we’ve already written extensively about both ride share and automated cars we’ll include them in our quick look at the end of car ownership. But first…

Andy_End Car Owner6Before discussing a mega shift lets step back from the topic and give it a quick review. Culturally in America, owning a car was a rite of passage for young people. When you reached 15 you started learning how to drive and as soon as you could legally work you started saving for a car of your own. It was independence itself. A driver’s license is the way most Americans prove their identity and having a car meant your schedule didn’t depend on your parents anymore. Want to get a better job across town? Better have a car. Want to date your gal/guy? One of you needs a car. Want to hang with your friends? One of you better have a car. Having a car meant popularity, power, and freedom.

America has 46,876 miles of interstate, which doesn’t include State Routes and surface streets. The tenth amendment governs interstate commerce, which means essentially most of the power of the federal government is derived from the need to regulate what passes from one state to another.

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Most of those people & items don’t go by rail like they do in Europe. Whether it’s Henry Ford’s Assembly Line innovation or the Detroit powerhouse of industry and economy cars are an American thing, synonymous with growth. Nascar is an American phenomenon founded by bootleggers trying to outrun prohibition revenuers. We are a younger nation and our cultural values involve the car. How does all that just go away in one generation?

 

It doesn’t. It’s actually been changing for a while now. As populations crowd into cities, property values explode and providing customer parking becomes a bigger expense for businesses. Mass transit costs can be shared across more wage-earners per mile. More residents live in high-rise apartments and condos without room for a garage. If you have to take a taxi to a separate place you rent so your car can live there, you tend to fall out of love. Or so I’m told.

The internet has also impacted things. Less business is conducted face to face through telecommuting and video conference but the mobility of internet access has had its biggest impact on young people who gain a sense of connection through social media instead of in person. People have been “cocooning” for over two decades. Pizza delivery nearly made pizza restaurants out of business entirely and now you don’t have to grab a VHS on the way home, the internet streams it to you. Amazon is seen as the great evil by private bookstores because they let you buy books online, but now everything is sold online and all brick-and-mortar stores are suffering. Malls are sitting empty because even when people go there to look at goods, they make their purchase online where it’s cheaper. Goods now move to the customer, not the other way around.

Society has become more litigious as well. Car insurance costs have risen, in part due to the rising cost of repair and in part the rising likelihood that you’ll be in an accident because roads are crowded and infrastructure is long neglected. The push to incorporate more safety features has created a base cost to manufacture of about $7,000. As the price climbs automakers throw in more features to increase the sense of value which makes cars more expensive, more likely to fail in non-catastrophic ways, and more difficult/expensive to fix.

While fuel costs are lower than they’ve traditionally been, our relationship with the Middle East is more tenuous than ever. Generation X was profoundly affected by the attack on 9/11. People are looking for less dependence and technology companies are seeing the writing on the wall.Andy_End Car owner2.jpg

While auto manufacturers are heavily invested in perfecting a product, tech companies understand the need to keep your finger on the pulse of trends. Cars are getting more technical and the need and desire to own a car is waning. That leads companies like Apple to invest heavily in the ability to expand into the car making business. That leads us full circle to rideshare and driving automation.

Traditionally, when you rent a car its because you’re traveling, or because your car is in the shop. Cars are the second most expensive thing a person typically buys. The first is a house and lots of people see renting a house or apartment as a long term option. They may harbor a quiet desire to own a residence, and only see renting as a matter of cost/benefit ratio, but few people thought that way about cars. But cars seldom sold for over $100,000 traditionally. Even in housing folks are turning to a more minimalist approach trying to avoid big debt during turbulent employment times. So finding ways to economize in automotive choices might get as creative as we’ve gotten with housing.

Why pay for a garage or parking space 24/7/365 when you only need the car a few hours a day? And much like someone might choose to rent an apartment when they aren’t sure how long they’ll be living in that location, or they might have to change houses as their family grows and shrinks, what we need a car for changes. A car share service could allow you to have a truck on the weekend to grab a load of bark dust for your yard, then get a mini-van for a trip to the beach, then a small sedan to commute to work. This concept is called a car subscription service and so far one start-up, called Faraday Future, is attempting to provide it.

This is why I held self-driving cars and rideshare until the end. There are several reasons often listed for their impact on car ownership but it’s more likely that car ownership is on it’s way out and these technologies are only hastening the inevitable. Availability of taxi and mass transit is an issue in cities below a certain size. Rideshare has made not owning a car a possibility in a lot smaller city because they’re cheaper than taxis their model works in places too small for mass transit. Self-driving cars drive the cost and complexity of owning a vehicle up. That’s really it.Andy_End Car Owner3

When you combine self-driving cars with ride share you get even cheaper Uber for riders, but that’s really just more of the same impact. The rideshare model is only one type of car sharing anyway. There’s also literally renting your car to another driver.

So will cars become like boats, something most people own for recreation? Well, long before that happens, it’s likely to become like home ownership. More and more people will look at it as a source of expense, responsibility, and opt for the flexibility of a shared situation. But others will see it as an investment. For decades, single-family rental homes were owned by private individuals. Corporations stuck to multifamily type residences. In 2008, the crash created opportunities for banks to go into single family homes en masse. Likewise, while corporations like Tesla and Apple are hinting at fleet ownership with individual buying the product as a service, it’s likely that private investors will see their vehicles as an investment. Once they are able to make one car pay for itself they’ll buy another, and another.

Companies like RVShare have sprung up to combine the idea of Airbnb with the subscription based car sharing of privately owned vehicles. Car sharing service, Turo, is already working with cars and has had millions of people sign up for it already. They aren’t alone.

Lexus, by Toyota, has created Getaround in an attempt to convince young buyers to subsidize their payment by helping them find renters for their vehicle. BMW is experimenting in some markets with Reachnow, a subscriptions-based service where you get a BMW for a time and then drop it wherever when you’re done for a flat monthly fee.

The Economic Vacuum Drawing People toward Car Sharing:

We’ve discussed a number of forces that push Americans toward car sharing, but from a business standpoint, there’s a significant draw. The humble, in-car stereo, could soon step aside to other forms of entertainment, and I’m not talking about Satellite radio. In June, Intel released a study estimating that up to $800 billion could be made (by 2035) on what they call the “Passenger Economy.” When most commuters aren’t driving they’ll need to have something else to do and that could explain companies Apple trying to take the car plunge.Andy_End Car Owner5

One industry sure to boost is alcohol. When driving isn’t a consideration anymore, drinking is likely to go up. So let’s toast to the coming robot taxi industry and all hope that they’re more accurate than the spell check on my cell phone.