Will the future of driverless cars rhyme with the history of the Segway? The Segway personal transporter was also predicted to revolutionize transportation. Steve Jobs gushed that cities would be redesigned around the device. John Doerr said it would be bigger than the internet. The Segway worked technically but never lived up to its backers’ outsized hopes for market impact. Instead, the Segway was relegated to narrow market niches, like ferrying security guards, warehouse workers and sightseeing tours.
One could well imagine such a fate for driverless cars (a.k.a. AVs, for autonomous vehicles). The technology could work brilliantly and yet get relegated to narrow market niches, like predefined shuttle routes and slow-moving delivery drones. Some narrow applications, like interstate highway portions of long-haul trucking, could be extremely valuable but nowhere near the atmospheric potential imagined by many—include me, as I described, for example, in “Google’s Driverless Car Is Worth Trillions.”
For AVs to revolutionize transportation, they must reach a high level of industrialization and adoption. They must enable, as a first step, robust, relatively inexpensive Uber-like services in urban and suburban areas. (The industry is coalescing around calling these types of services “transportation as a service,” or TaaS.) In the longer term, AVs must be robust enough to allow for personal ownership and challenge the pervasiveness of personally owned, human-driven cars.
This disruptive potential (and therefore enormous value) is motivating hundreds of companies around the world, including some of the biggest and wealthiest, such as Alphabet, Apple, General Motors, Ford, Toyota and SoftBank, to invest many billions of dollars into developing AVs. The work is progressing, with some companies (and regulators) believing that their AVs are “good enough” for pilot testing of commercial AV TaaS services with real customers on public roads in multiple markets, including Singapore, Phoenix and Quangzhou.
Will AVs turn out to be revolutionary? What factors might cause them to go the way of the Segway—and derail the hopes (and enormous investments) of those chasing after the bigger prize?
Getting AVs to work well enough is, of course, a non-negotiable prerequisite for future success. It is absolutely necessary but far from sufficient.
In this three-part series, I look beyond the questions of technical feasibility to explore other significant hurdles to the industrialization of AVs. These hurdles fall into four categories: scaling, trust, market viability and secondary effects.
Scaling. Building and proving an AV is a big first step. Scaling it into a fleet-based TaaS business operation is an even bigger step. Here are seven giant hurdles to industrialization related to scaling:
- Mass production
- Electric charging infrastructure
- Fleet management and operations
- Customer service and experience
- Rapid localization
Trust. It is not enough for developers and manufacturers to believe their AVs are good enough for widespread use, they must convince others. To do so, they must overcome three huge hurdles.
- Independent verification and validation
- Standardization and regulation
- Public acceptance
Market Viability. The next three hurdles deal with whether AV-enabled business models work in the short term and the long term, both in beating the competition and other opponents.
- Business viability
- Stakeholder resistance
- Private ownership
See also: Suddenly, Driverless Cars Hit Bumps
Secondary Effects. We shape our AVs, and afterward our AVs reshape us, to paraphrase Winston Churchill. There will be much to love about the successful industrialization of driverless cars. But, as always is the case with large technology change, there could be huge negative secondary effects. Several possible negative consequences are already foreseeable and raising concern. They represent significant hurdles to industrialization unless successfully anticipated and ameliorated.
- Job loss
I’ll sketch out these hurdles in two more parts to come.