self-driving cars and ride-sharing

The one constant that is actually gleaned from marketing insight is that ultimately it’s the consumer who will decide what they will consume, and, just as importantly, how they will consume it. As we approach critical mass for autonomous car technology marketers and manufacturers would be wise to keep in mind that consumer adoption is the most important factor.

With Autonomous Cars, Consider the Following…

It’s assumed that people will use new technology as the designers intended and, where autonomous cars are concerned, it’s expected to lead to smaller shared cars, fewer city parking lots and decreased auto manufacturing. However, examples from history suggest the results from autonomous vehicle technology will not conform to those expectations:

  • Honda Element: Right car, wrong consumer
    • Designed as a young person’s vehicle for an active lifestyle that requires a durable and roomy interior, the Element was an accidental success with people aged 40+ needing a gear hauler for all their mountain bikes, surf boards, scuba gear and dogs.
  • Demand for travel
    • Throughout history, advances in transportation technology (i.e., the horse, train, car, airplane) have led to more travel options, not less. That, in turn, means more manufacturing (i.e., tack, rails, tires, wings), not less.

The Path to Creative Destruction

What if self-driving vehicles actually enabled more and longer travel? What if fleet ownership by ride-sharing companies is not the entire future? Can we fully anticipate the consumer habits that change as a result of autonomous vehicles?

Freedom from the cost of ownership and from paying attention to the road is convenient, and I can easily see consumers taking advantage of autonomous vehicles to take longer trips. Extrapolating the possible results of this new convenience I can see consumers arriving at exotic locations more refreshed than they would be otherwise, which, paradoxically, could drive demand for more autonomous/manual hybrid as they hop behind the wheel to explore their surroundings. How might that develop one might ask?  Consider the following experience with the young owners of a small startup in Boston.

I arrived there as a production and operations consultant to discover them utilizing Uber to deliver their product all over the city. It was wildly inefficient, and yet Uber’s technology filled a temporary need it was not intended to fill while allowing them to focus their energy elsewhere. To me it was a horrible waste requiring a more traditional solution, to them it was a novel workaround and so it’s a short mental leap to see how consumer adoption will drive the utilization of autonomous vehicles into more niche uses ultimately requiring more production.

Self-Driving Cars and Ride-Sharing? But We Want To Be Free!

Auto manufacturers are currently designing software that cuts the human out of the equation entirely because it’s just too difficult to keep the human there, but ultimately a compromise will emerge. Consider this personal example: Uber is fine for adults, but families have very specific needs. I can’t see myself waiting for Uber with cranky children on the side of the road while laden down with car seats, snacks, backpacks, woobies and other assorted kid detritus for a simple jaunt across town. Furthermore, being outdoorsy requires planning, packing, space and instant availability. These concepts are at odds with ride-sharing. Perhaps I need a self-driving SUV that will also allow me to take control when I take it off the beaten path. Admittedly, I am among a minority of car owners who actually do adventurous things with their cars (and their kids), but where does that leave manufacturers who want to eliminate the human factor? Probably building niche cars to meet that demand I should think.

The implications for auto manufacturing remain unclear, but I place my money on simple economics: scarcity of resources will drive consumer preferences to get the most creative uses out of their choices. This will lead to more varied and niche manufacturing over the long term which highlights the need for flexible ERP packages like QAD Cloud ERP that give manufacturers the agility to continue being adaptable and highly Effective Enterprises now and into the future.