We’re Not Getting Flying Cars Anytime Soon - But What’s Right Around The Corner Is Almost As Good
Tomorrow morning I’m speaking on a panel about the future of cars at the 2013 Fortune Brainstorm Tech conference. To get ready, I’ve been gathering my thoughts about the future of the automotive industry, a topic that is near and dear to my heart. At Shasta, I’ve led our investments in two transportation-related startups: RelayRides and Flywheel.
We are on the cusp of major changes in the automotive industry that are poised to massively disrupt the larger world economy as well. I think the emergence of driverless, fully autonomous cars (and trucks) is closer than people think. This technology, currently being pioneered by Google, actually works well. The only thing holding it back is the cost of military-grade lidar and optical sensor technology, which is plummeting at the rate of Moore’s Law.
So what are some of the non-obvious things that happen, when cars and trucks drive themselves? Here’s my top ten:
- Fatality rates plummet as driving from one point to another becomes as safe as riding an elevator. You’ll see massive consolidation of the automotive insurance industry, which is built on the premise of drivers making mistakes.
- As accident rates plummet, cars won’t need extensive safety features. As a result, cars can become far lighter and mileage will go up dramatically.
- Without the need to drive cars, longer commutes become bearable and productive. Imaging being able to email and teleconference the entire way to work, or other meetings.
- What does a car need to look like if you don’t need a driver? Do we all ride around in RV’s?
- It’s far easier to rent a car when it shows up at your house or office. Car ownership plummets.
- Car and truck sales increase (not decrease). The market actually expands as it becomes easier to use cars and trucks - more miles and more trips are actually taken. With the increase in consumption, vehicles depreciate and wear out faster than ever before. I predict that this will make the market for transportation even larger than it is today.
- The fight for consumer mindshare in mobile applications - such as Uber, Flywheel, and Lyft will be incredibly important. Consumers will come to view these brands as their on-ramp to point-to-point transportation.
- In-car entertainment won’t make money for the automotive companies - it will make money for the cellular carriers and handset platform providers instead as consumers use their tablets and smartphones more and more while in the car.
- Speed limits rise dramatically, and car travel begins to make more sense than high-speed rail for moderate to long distances.
- The oft-quoted statistic about “air travel being safer than car travel” goes away.