A new study commissioned by computer chipmaker Intel estimates that economic opportunities created by autonomous vehicles will accelerate from $800 billion a year in 2035 to $7 trillion annually by 2050 and dramatically change our concepts of mobility. That potential for profit, and the risks to existing businesses from that disruption, are reasons why automakers and tech companies are investing so much.
The futurist study by Strategy Analytics forecasts the economic impact of a new global “passenger economy” driven by autonomous vehicles that will replace today’s sharing economy and private car ownership (as well as the corps of drivers employed by transportation and freight companies). It would be an economic disruption, it says, on the order of the internet and cellphones. The study sees the first fully autonomous vehicles within five years or so and slower growth through 2035, after which it will take off.
Intel has, of course, a vested interest in the forecast. The company is investing heavily to become a leader in autonomous technology development, including partnerships with Delphi and BMW as well as recently paying $15.3 billion to buy vehicle camera and sensor maker Mobileye.
The study looks at changes for both businesses and consumers. “Less than a decade ago, no one was talking about the potential of a soon-to-emerge app or sharing economy because no one saw it coming,” said Intel CEO Brian Krzanich, in a statement. “This is why we started the conversation around the passenger economy early, to wake people up to the opportunity streams that will emerge when cars become the most powerful mobile data-generating devices we use and people swap driving for riding.”
The study breaks down the $7 trillion economic impact of the new passenger economy and buying mobility as a service by 2050 as:
- Businesses will account for 43 percent, or $3 trillion in revenues, including transportation and delivery companies. It sees this taking off fastest as automation potentially pays for itself.
- Consumers will account for 55 percent, or $3.7 trillion in revenue, for buying mobility services.
- New apps and services created by self-driving vehicles will have an impact of $200 billion, such as by media companies and advertisers.
It also looks at scenarios for potential changes in how we’ll live and interact with the vehicles as we get around, including:
- Safer travel. The study predicts that 585,000 lives could be saved and $234 billion in related public safety costs prevented due to self-driving vehicles from 2035 to 2045.
- A lot of free time while we’re in the vehicle, but not driving. Self-driving vehicles could free up more than 250 million hours of commuting time per year in the most congested cities.
- In-car services, “from onboard beauty salons to touchscreen tables for remote collaboration, fast-casual dining, remote vending, mobile health care clinics and treatment pods, and even platooning pod hotels, vehicles will become transportation experience pods.”
- In-car entertainment. “Media and content producers will develop custom content formats to match short and long travel times.”
- Ads targeted to your location and to you thanks to all the data vehicles will be accumulating about you. “Location-based advertising will become more keenly relevant, and advertisers and agencies will be presented with a new realm of possibilities.”
- Mobility services as a perk. “Employers, office buildings, apartment complexes, university campuses and housing estates will offer [mobility services] to add value to and distinguish their offer from competitors or as part of their compensation package.”
- Car as a business. The smaller number of people who choose to own a vehicle will share it via an app when they aren’t using it. Or they might buy just a time-share of the vehicle from car companies.
Disrupting Public Transit and Other consequences
One interesting note in this study, which does not come up much in the discussion of autonomous vehicles, is the potential for these vehicles to disrupt not just the auto and transportation industries and private car ownership, but also our current models of mass transit, including buses, light rail and subways. Door-to-door service-on-demand from an app would be hard to resist.
The study predicts that cities may rethink public transit and even get into municipal ownership of fleets of self-driving vehicles.
Perversely, this also could mean more traffic, not less. It could be more orderly as the vehicles cruise along at fixed speeds with fixed spacing, and you could spend the time on entertainment or working during the ride since the car is driving.
Privacy also will become a bigger issue, since an unprecedented amount of data will be gathered about you and your activities, purchases and travel patterns. And so will security; if you think hacking email is dangerous, consider how hacking could affect a world of interconnected and computer-driven autonomous transportation.