Automobile giants are in a hurry. The race to be the first to deploy autonomous vehicles is on among carmakers, emerging start-ups and tech giants. And as per Intel, self-driving cars will revolutionise the way we travel, work and live. It will create a $7-trillion-a-year industry by 2050. The US tech giant is forecasting what it terms a “passenger economy” that will create massive opportunities for new businesses, as people transform from drivers into riders with time.
As per the recent study released by Intel, the companies that don’t prepare for self-driving cars, risk failure of business models or perhaps even extinction. New digital business models ushered in by personal computing, the Internet, ubiquitous connectivity and smartphones have given birth to a wide range of new booming economies.
So autonomous driving will do the same. The study, prepared by Strategy Analytics, predicts that autonomous vehicles will create a massive economic opportunity that will scale from $800 billion in 2035, which is the base year of the study, to $7 trillion by 2050. And it won’t be just the ease of driving. An estimated 5,85,000 lives could be saved due to autonomous vehicles between 2035 and 2045, the study predicts.
Intel’s prediction is not restricted to numbers. Some of the more outlandish predictions include what it calls “car-venience” applications such as onboard beauty salons in cars, as well as mobile health clinics and treatment pods.
It even imagines that self-driving vehicles could “platoon” together to form pod hotels. As per the study, self-driving vehicles are expected to free more than 250 million hours of commuting time per year in the most congested cities in the world.
Intel has a vested interest in rosy predictions about the future of autonomous transportation. It has promised to spend $250 million over the next two years to develop self-driving technology and recently acquired Jerusalem-based auto vision company Mobileye for $15 billion. Intel is also working with BMW to put self-driving cars on the road later this year.
Autonomous technology will drive change across a range of industries, the study predicts, the first green shoots of which will appear in the business-to-business sector. These autonomous vehicles will first appear in developed markets and will reinvent the package delivery and long-haul transportation sectors. This will relieve driver shortages, a chronic problem in the industry, and account for two-thirds of initial projected revenues.
Public transportation will be supplanted, or at least radically changed, by the rise of on-demand autonomous vehicle fleets. The study argues that people will flock to the suburbs, as population density rises in city centres, pushing commute times higher and “outstripping the ability of public transport infrastructure to fully meet consumer mobility needs.”
The pressures of mounting traffic congestion and the correlated emissions will drive regulators to include autonomous vehicles as part of their larger public transportation plans. Some cities may choose to own the vehicle networks not unlike
existing public transportation, the Intel study says. The bulk of the revenue generated in the new economy will be driven by this “mobility-as-a-service.”
By 2050, business use of mobility as a service will generate about $3 trillion in revenues, or 43% of the total passenger economy. Consumer use will account for $3.7 trillion, or 53%, the study predicts. The remaining $200 billion in revenue (of the $7 trillion total) will be generated by new applications and services as driverless vehicle services expand. A key opportunity will be how to capitalise on all of this saved time people will have once they no longer have to drive a car.
It could also change the way cars are used. One of the great promises of self-driving cars is a reduction in congestion because these vehicles will be able to share real-time traffic data and optimise tasks like finding parking. However, in a more densely populated world, where cities rely on shared autonomous vehicles for public transit, self-driving might just lead to more traffic than ever before.