http://www.youtube.com/watch?feature=player_embedded&v=cdgQpa1pUUE
As important and beneficial as such an innovation clearly will be for someone with that specific handicap, the self-driving car will also bring with it an incredible wave of creative destruction. Creative destruction occurs when a new entity, service, or product enters the market rendering an old offering obsolete, which in turn forces the “owner” of the “old” offering to innovate, re-invent themselves or face business extinction. On top of that, brand new markets and never before thought of (or even necessary) offerings tend to emerge rapidly in such an environment. Here are 3 centenarian industries that are about to be “run over” by the self-driving car and will need to veer swiftly in order to keep on truckin’.
Transportation and the Labor that Drives It
If I were a trucker, a cabbie, a bus driver – anyone that operates a vehicle for service purposes – and had children, I would be doing all I could to steer my kids away from following in my footsteps. This is no knock on their profession, we all know that truckers move the goods and food we consume, but the labor that powers the ground transportation industry is facing a dramatic shift as the self-driving car makes its way into our society and the creative destruction is already underway. SARTRE or Safe Road Trains for the Environment – a European Union funded project in partnership with Volvo – is already live testing road-trains that allow commuters to enter and exit the ‘grouping’ and then kick back, relax, and let the automated driving commence.
Yes, currently there is a human “lead” driver, a professional driver who operates the lead vehicle in the gaggle, but it is easy to envision even that lead person being replaced by what is essentially, a more perfect set of digital algorithms. And if cars can maneuver in and out of a road-train, then why can’t 6 or 7 or 12 tractor trailers leave a singular destination in a road-train fashion with only a singular human operator? The answer, is of course they can, and they are of course already testing that as well. This doesn’t just affect truckers and the trucking industry. If I’m the train, busing, airline, or personal transportation industry, or the tangential industries that provide services and products to them, I am looking for new ways to create value, and I am starting yesterday.
The Auto Industry Itself
Zipcar, you’ve seen it on the highways and perhaps you are a member of their “wheels when you want them” platform. So what of the idea of Zipcar carpools that pick you up and drop you off at your home via a self-driving car? Think about this for just a moment. Let’s assume a carpool can comfortably fit 4 adults. Sure you might still own 1 vehicle, but the absolute need to own a 2nd vehicle – if say you have a family – is much less an actual need as it is today. Some would opt out of owning a 2nd vehicle for eco-concerns, some would do it simply to save and invest more money. The reason really wouldn’t matter as so much the fact that this new market would offer this very attractive alternative to 2nd vehicle ownership.
It’s easy to realize that the disruption of the auto-industry doesn’t stop with this one potential example above. Now – in this potential near-future – the very ergonomic design and function of automobiles will change overnight. The auto itself would have to make the Titanic shift from being a performance vehicle over to a services platform that happens to be physically mobile. The perception of wasted time aka windshield time stuck in traffic and commuting in general is eradicated if the vehicle is re-designed from within to make your transportation time highly valuable and productive. It doesn’t take a genius to begin to re-envision how the auto will be transformed into an extension of the office and lifestyle. What will be fun to watch – and where the automobile industry can capitalize – is the innovations that will be born that cater to this neo-commuter and the applications they access to capitalize on this new found “time”. Will it all happen from an iPad regardless or will it be something more native to the physical auto? – that remains to be seen.
This potentially means far fewer cars on the road, far fewer cars being demanded by the market, and a much greater attention paid to specific functionalities an auto offers and the competitive advantages it renders that brand. The car itself becomes more and more part of the services economy, and that is a shift that will cause disruption, creative destruction, and amazing new innovations.
The Auto Insurance Industry – Are You in Good Hands… with Google?
There’s not much to say here beyond the title of this section. If 50%, 75%, and eventually 100% of the driving you are doing is happening via a self-driving car, what happens to the entire industry that is auto insurance? Might you still carry some catastrophic coverage? Perhaps, but what if you don’t own the car and you use a Zipcar like service, and that service enters select road-trains as needed, all while you are happily typing away on your iPad on your way to work or to the supermarket? The entire idea of how you pay for insurance and when completely shifts. There is no doubt that a portion of any airline ticket you purchase is utilized to cover various insurances that carrier must comply with… so, does the self-driving car then shift to a per transaction or subscription based model where the cost of insurance is baked into the pricing? And let’s not forget, at least in theory, accidents would be dramatically reduced, and potentially approaching zero. This industry is facing a prime example of creative destruction and it will be the most innovative teams within enterprises that create new services, that drive new revenues, and help their company grow while others struggle to hold on to what will be a rapidly shrinking market-place.
Some innovations hit us seemingly over night, while others crawl up upon us like a coastal bound hurricane. The autonomous automobile is the latter, but many times, even when we see it heading straight for us, we don’t think long enough about the repercussions. We don’t pay enough attention to how it may affect us in secondary and tertiary ways until it is already being felt. We often don’t think about the wake it will likely leave behind, and how that new landscape offers opportunities that are ripe for the taking if we were to only step outside of our current boxes and ask ourselves; “What if this is bigger than we can imagine?”
When the self-driving car hits, and then permeates through society, things will never be same again. Will you be on the upside that breeds new creation, new services and innovations or the downside where existing industries will be engulfed and then forgotten with time?
