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Who and what is driving the development of driverless cars

By: David Bailey @dgbailey
Published: Wednesday, October 22, 2014 - 14:44 GMT Jump to Comments

In the future you won’t necessarily own a car but might summon a driverless car whenever you need one. We could end up thinking about the ‘auto-mobile’ in a very different way.

Google’s unveiling a few months ago of its latest driverless test car has sparked a scramble in the industry, both amongst assemblers and suppliers.

OK, the ‘Google Car’ looks a bit bizarre, leading some to think it won’t catch on. It’s a two-seater with no driver controls or steering wheel and resembles a cross between a ‘Noddy’ car and an old bubble car. But don’t let that undermine the radical shift that such cars could well bring. Note, for example, how much more ‘normal’ looking the demo by Mercedes of a computer-controlled S-class at a recent motor show was.

Mainstream auto makers like Daimler, Volvo, Toyota and BMW – and critically major supply chain firms - are all pushing autonomous vehicle technologies in a big way.

In the short term, it’s the suppliers which may make the running, especially those that can provide a range of autonomous vehicle technologies. This has triggered a wave of takeovers in the supply chain. Software firms in particular will play a critical role.

For example, last month ZF Friedrichshafen took over TRW Auto, a US-based maker of video and radar systems. That was followed by a Panasonic bid to take a stake in the Spanish firm Ficosa, whose image-recognition technology Panasonic hopes to combine with its auto sensors to develop self-driving technology. Meanwhile, the Swedish firm Autolive has made a number of driverless technology acquisitions.

Suppliers and software firms are lining up to supply driver assistance features which are set to take off, with some analysts suggesting that the market will grow from around $6bn now to some $25bn by 2020, and over $50bn by 2025.  So far, though, none of these firms are looking to remove the driver from the picture completely.

But Google – and Tesla – are trying to do just that. Google in particular wants to be ‘transformative’, and highlights the positives that could come with completely driverless cars. Such cars may not be here for a decade or more – by 2023 according to Tesla - but when they do arrive they really could revolutionise urban transport.

Having a fleet of semi-autonomous electric or hydrogen cars to hail at our disposal in cities – the ultimate driverless ‘Uber’ on-demand taxi app - could help make roads safer, less congested and cleaner, and could free up occupants’ time to do something more useful or fun than driving.

City congestion could be reduced as old ‘steering-wheeled’ cars are replaced and people hail driverless cars with the tap of a smartphone app. Not surprisingly, Google recently made a $250+ million investment in the Uber on-demand taxi service through its venture capital wing.

The ill and immobile could enjoy much enhanced mobility and freedom. The young could access personal mobility without the need for a licence. Accidents and insurance costs could be cut dramatically. Pubs, especially in rural areas, might come back to life as late night drinkers won’t be able to drink and drive.

High speed motorway cruising could be made much safer and quicker in computer controlled convoys, saving fuel. Accidents could be avoided and so heavy crash safety features on cars could be reduced, thus saving more fuel – whether fossil fuel, electric or hydrogen.

Such developments led Morgan Stanley last year to suggest that autonomous cars will go on sale by the end of the decade, at first costing about $10,000 more than conventional cars.

It reckons that the social and economic implications are huge: “beyond the practical benefits, we estimate autonomous cars can contribute $1.3 trillion in annual savings to the U.S. economy alone, with global savings estimated at over $5.6 trillion”.

Of course, there could well be downsides for assemblers if far fewer cars are needed, and perhaps for society and individuals as well. Think of these scenarios, for example:
1. Hackers gain control of driverless car networks and shut them down, or cause crashes;
2. Your partner’s divorce lawyer asks in court for a record of what journeys you have taken from your network provider;
3. Your insurance firm wants to know why you have been to a certain part of town at night and terminates cover when you refuse to say why.

So passengers in driverless cars will have enhanced freedom to move, but others will be monitoring where such drivers go – whether the auto makers, suppliers, insurance firms and/or the state.

But back to Tesla and Google.

How can new entrants expect to take on big incumbent auto players? Well if Tesla has made a go of it with electric vehicles then maybe it and Google can do the same with driverless ones. If ‘transformative’ is the word, then there’s no reason why existing, path-dependent giant auto firms will actually be the ones to doing the transforming. And given Google’s investments in a range of related technologies, perhaps their vision is a network of self-guided, electric or hydrogen powered vehicles in urban areas, summoned with a tap on a smartphone and able to take their fee-paying passengers anywhere.

The Chief Executive of Uber, Travis Kalanick, has recognised the connection, and was quoted in TechCrunch Blog stating "when there's no other dude (ie taxi driver) in the car… the cost of taking an Uber anywhere becomes cheaper than owning a vehicle."

So when thinking of the driverless cars of the next decade, think of the autonomous taxi. You won’t necessarily own a car but might summon one when you need one. We could end up thinking about the ‘auto-mobile’ in a very different way.

UBER no threat to taxi drivers but Google will drive them to extinction by The Leader read here 

Professor David Bailey works at the Aston Business School. He drives an electric car which already has an always-on internet connection.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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