The Coming Disruption of Transport

[WislaHD]

I have a couple more thoughts on this. Tony Seba is predicting that with the speed of AI advancement, autonomous cars will have all the kinks worked out and be ubiquitous by 2030, and that transportation as a service will be 10x cheaper than owning a car. He's also predicting that because of this, the vehicle fleet will fall by 70% and the remaining cars will be continuously driving. And that the cost savings and increased productivity will be a tremendous boost to the economy, and that the need for parking lots will be drastically reduced.

This has a few implications that he hasn't addressed. First, rush hour will still be a thing. For all the hype of telecommuting, face to face contact is incredibly important in most sectors and the vast majority of us need to get to a physical workplace. So the minimum number of cars we'll need is how many are required to deal with rush hour. At non-peak periods and especially at night, a lot of cars are just going to be sitting somewhere, so we might need more parking lots than Seba thinks.

Second, if car transport is going to be the same annual cost as a Netflix membership, it makes car transportation essentially free. And since reducing the cost of something, drives up demand, people are going to take trips more often and farther than they do today, and that means more cars and more traffic.

I'm still bullish on the future being electric, automated and on demand, but I do think that it'll be more complicated than Seba thinks.

100% agreed, which is why I never thought that AV's were the cure-all for our cities. I was always concerned AVs would induce urban sprawl, for instance, by allowing longer commutes to become both cheaper and more tolerable.

Though there are some important changes as it relates to the public realm. Parking lots can be located at areas in the urban periphery, rather than downtown, to store vehicles at non-peak hours. Storefronts and buildings can re-utilize or redevelop their on-site parking to more productive uses. We can eliminate on-street parking and increase sidewalk width, add cycling lanes to most major streets. I am sure there are more public realm changes that could be enabled by AVs.

 

[MetroMan]

A massive shift to electric vehicles is very likely. A massive reduction in car ownership is less obvious; people can still own cars even if those car become all-electric and self-driving.

Lots of rental companies operate today, and yet a lot of people own cars instead of renting them on the per-trip basis. I'm not sure why that balance will shift dramatically once we go all-electric.

These two concepts are advancing alongside one another while not necessarily one entirely because of the other. There are however reasons why all electric cars might help move cities to less car ownership. Electric vehicles tend to embrace new technology, the most important of which are that they're drive by wire, connected to the internet and self driving.

Tesla as the best example, has built in features into all their cars that will enable them to be shared while you're not using them. If your car is parked while you're at work, you'll be able to put it in lease mode and suddenly, someone nearby will see that there's an available car that they can either drive or they can hail to drive them autonomously to their destination.

This kind of car sharing is just not feasible for internal combustion engine vehicles if you're going to have to constantly have to drive to gas stations to fuel up. Charging stations on the other hand, will soon become ubiquitous and in most places where you park, you'll have a charged car.

This kind of access to use a car via an app will make owning a car just not worth it for many city dwellers. ZipCar does this on a smaller scale but those fleets are managed by a team whereas Tesla sharing will be decentralized, each car managed by their owner. Other companies have talked about doing the same.

And note, the owner of this vehicle doesn’t have to be an individual. This kind of decentralized smart rental built into cars like Teslas will make it very easy for condos to have a small fleet of vehicles for hire that the residents can use, therefore fewer will see the need to own a car.

 

[lenaitch]

Baking charging stations into new builds seems like a good idea, but retrofitting them into existing structures and public spaces will come at a likely high cost that many current fee/rate payers may find unacceptable. Also, earning income from a vehicle, whether individually or corporately owned, has tax implications.

 

[mdrejhon]

I was always concerned AVs would induce urban sprawl, for instance, by allowing longer commutes to become both cheaper and more tolerable.

There are both good and bad scenarios. That's one bad congestion-increasing scenario I'm concerned about, too.

Government regulation may need to play a role on encouraging favourable outcomes (fewer vehicles satisfying larger percentage of population) -- whether simple things such as disincentives for empty AVs going long distances without a driver, etc

 

[Rainforest]

These two concepts are advancing alongside one another while not necessarily one entirely because of the other. There are however reasons why all electric cars might help move cities to less car ownership. Electric vehicles tend to embrace new technology, the most important of which are that they're drive by wire, connected to the internet and self driving.

Tesla as the best example, has built in features into all their cars that will enable them to be shared while you're not using them. If your car is parked while you're at work, you'll be able to put it in lease mode and suddenly, someone nearby will see that there's an available car that they can either drive or they can hail to drive them autonomously to their destination.

This kind of car sharing is just not feasible for internal combustion engine vehicles if you're going to have to constantly have to drive to gas stations to fuel up. Charging stations on the other hand, will soon become ubiquitous and in most places where you park, you'll have a charged car.

This kind of access to use a car via an app will make owning a car just not worth it for many city dwellers. ZipCar does this on a smaller scale but those fleets are managed by a team whereas Tesla sharing will be decentralized, each car managed by their owner. Other companies have talked about doing the same.

And note, the owner of this vehicle doesn’t have to be an individual. This kind of decentralized smart rental built into cars like Teslas will make it very easy for condos to have a small fleet of vehicles for hire that the residents can use, therefore fewer will see the need to own a car.

Maybe. We'll see

I can think of two potential pitfalls for shared car ownership.

The first is the daily usage profile. From 7 am to 9 am and from 5 pm to 7 pm, lots of cars are needed to drive their owners to/from work. If you don't own one, you will have a hard time finding one available for rent. Of course you can take public transit, walk, bike etc, but then you are not participating in the car-sharing at all. Outside those hours, you might see lots of cars available for hire, but the demand for them will be limited.

The second is the liability for misuse. Imagine that you "shared" your car, it was used by one dude, then another, and now there is trash all over the floor. Each of the users blames the other. Are you going to sue them? That's expensive, and might take months or years. If you are not operating like a business, then you might not even want a small extra cash flow in exchange for potential headaches. If you are a business, then you'll have to include insurance for such cases as well as other operating costs into your price.

Technically, old-school cars could be shared. They can't flag themselves, but a cellphone app could be created to connect the lenders with the renters easily. The fact that it isn't happening today on a scale, tells me that the ability to self-drive isn't the only component missing.

 

[TrickyRicky]

I know I’m a sceptic in this thread of optimists but how deep do you think this sharing and av as transport will penetrate? People are icky and own vehicles for all kinds of speciality uses and status displays. I’m thinking personal vehicle ownership as a percentage of the total fleet in a place like Canada will be unlikely to dip below 50% regardless of technology.

 

[crs1026]

^I took in the Car Show yesterday. (Disclaimer: I’m in the market for a small, city-friendly vehicle) I found it an interesting slice of how car companies see their market at the moment. Or maybe this discussion had me looking at things from a non-mainstream viewpoint.

My first discovery was that nobody had ‘compact’ cars on display. Couldn’t find a Yaris or Fit or Reo to kick tires. GM has Spark on display. Nissan had a racing equipped Micra, but it was a static non-consumer display as opposed to a demonstrator. Everything seemed to be SUV or sedan sized. lots of trucks.

I saw lots of electric and hybrid vehicles. As a rule, they had sticker prices that were out of reach, even after subsidy. Not one sales person I spoke to could speak to the cars’ economics.......the pitches were just that the cars were green, and therefore cool, and even quieter.... but no one claimed they would be cheaper on a life cycle basis. I have a feeling that the car companies are in “don’t ask, don’t tell” mode about cost for the simple reason that dealers (who count on income from their service departments) would be pissed if they were given a clear, candid picture about where maintenance is going post-ICE. (I wonder how long before they develop new high margin upsell products to replace the throttle cleaners and other crap they push now.... will they offer Wiring Lubricants or Magnetism Inhibitor sprays instead?)

There were definitely people doing serious EV comparison shopping - but one sensed that they were all people who were not shopping with price as a consideration. (All consumer shows have a drool/ dream factor to them, I know, so maybe price only kicks in when people sober up later)

AI was not featured...l expected much more of that. Nobody was showcasing self driving vehicles or claiming to be in the lead on that technology. Driver assist, however, was pretty much everywhere.

What the manufacturers seemed to be pushing most was the big screen in-car entertainment and communication systems. “Android/Apple Compatibility” was the phrase I heard most... much more than “green” or “low gas mileage”. Clearly they were selling to a market that is addicted to their smartphones. The touchscreen may have replaced colour or horsepower or body styling as the sexiest aspect of car design. That seemed to be where the auto companies were putting their emphasis. One wonders how the pool car future vision will address that.

My sense is, while here we may be discussing auto tech a bit technocratically, out the in the real world cars are still largely a consumer product that is sold on sizzle rather than steak. I do think price will prevail in the end, but for EV that shift is still invisible. And, as I said above, car shows are drool/dream events - the realities sink home when one does numbers at the dealership.

- Paul

 

[lenaitch]

^I took in the Car Show yesterday. (Disclaimer: I’m in the market for a small, city-friendly vehicle) I found it an interesting slice of how car companies see their market at the moment. Or maybe this discussion had me looking at things from a non-mainstream viewpoint.

My first discovery was that nobody had ‘compact’ cars on display. Couldn’t find a Yaris or Fit or Reo to kick tires. GM has Spark on display. Nissan had a racing equipped Micra, but it was a static non-consumer display as opposed to a demonstrator. Everything seemed to be SUV or sedan sized. lots of trucks.

I saw lots of electric and hybrid vehicles. As a rule, they had sticker prices that were out of reach, even after subsidy. Not one sales person I spoke to could speak to the cars’ economics.......the pitches were just that the cars were green, and therefore cool, and even quieter.... but no one claimed they would be cheaper on a life cycle basis. I have a feeling that the car companies are in “don’t ask, don’t tell” mode about cost for the simple reason that dealers (who count on income from their service departments) would be pissed if they were given a clear, candid picture about where maintenance is going post-ICE. (I wonder how long before they develop new high margin upsell products to replace the throttle cleaners and other crap they push now.... will they offer Wiring Lubricants or Magnetism Inhibitor sprays instead?)

There were definitely people doing serious EV comparison shopping - but one sensed that they were all people who were not shopping with price as a consideration. (All consumer shows have a drool/ dream factor to them, I know, so maybe price only kicks in when people sober up later)

AI was not featured...l expected much more of that. Nobody was showcasing self driving vehicles or claiming to be in the lead on that technology. Driver assist, however, was pretty much everywhere.

What the manufacturers seemed to be pushing most was the big screen in-car entertainment and communication systems. “Android/Apple Compatibility” was the phrase I heard most... much more than “green” or “low gas mileage”. Clearly they were selling to a market that is addicted to their smartphones. The touchscreen may have replaced colour or horsepower or body styling as the sexiest aspect of car design. That seemed to be where the auto companies were putting their emphasis. One wonders how the pool car future vision will address that.

My sense is, while here we may be discussing auto tech a bit technocratically, out the in the real world cars are still largely a consumer product that is sold on sizzle rather than steak. I do think price will prevail in the end, but for EV that shift is still invisible. And, as I said above, car shows are drool/dream events - the realities sink home when one does numbers at the dealership.

- Paul

Advertising is what it is, but do you notice more TV vehicle ads seem to promote them more as entertainment venues than transportation.

A buddy dropped by last week with his new Kia Niro hybrid. He was originally intending to get a plug-in hybrid but said the salesperson talked him out of it given his driving patterns and that it wouldn't justify the extra cost for the plug-in. He figured he couldn't go pure electric because he likes to take off winter camping and figured leaving it sitting in a sub-zero remote parking lot for several days after driving a few hundred kliks might not end well.

 

[MisterF]

What the manufacturers seemed to be pushing most was the big screen in-car entertainment and communication systems. “Android/Apple Compatibility” was the phrase I heard most... much more than “green” or “low gas mileage”. Clearly they were selling to a market that is addicted to their smartphones. The touchscreen may have replaced colour or horsepower or body styling as the sexiest aspect of car design. That seemed to be where the auto companies were putting their emphasis. One wonders how the pool car future vision will address that.

I don't think that it's so much about being addicted to smartphones as much as car companies recognizing that they can't hope to compete with Google and Apple when it comes to interface, updates and connectivity. So Android Auto and Carplay are ways to harness the power of the smartphones that everyone has anyway to bring an up to date interface and apps to your car's screen.

I have friends with built in GPS where the maps haven't been updated in years. Another friend just bought a new car with Android Auto but no built in GPS since Google Maps is better than anything that could be built in. And it's not just maps. You can use it to listen to Spotify or mp3s from your phone. Or have it read WhatsApp messages to you as they come in. Or using voice commands to send a text.

 

[kEiThZ]

^I took in the Car Show yesterday. (Disclaimer: I’m in the market for a small, city-friendly vehicle) I found it an interesting slice of how car companies see their market at the moment. Or maybe this discussion had me looking at things from a non-mainstream viewpoint.

My first discovery was that nobody had ‘compact’ cars on display. Couldn’t find a Yaris or Fit or Reo to kick tires. GM has Spark on display. Nissan had a racing equipped Micra, but it was a static non-consumer display as opposed to a demonstrator. Everything seemed to be SUV or sedan sized. lots of trucks.

I saw lots of electric and hybrid vehicles. As a rule, they had sticker prices that were out of reach, even after subsidy. Not one sales person I spoke to could speak to the cars’ economics.......the pitches were just that the cars were green, and therefore cool, and even quieter.... but no one claimed they would be cheaper on a life cycle basis. I have a feeling that the car companies are in “don’t ask, don’t tell” mode about cost for the simple reason that dealers (who count on income from their service departments) would be pissed if they were given a clear, candid picture about where maintenance is going post-ICE. (I wonder how long before they develop new high margin upsell products to replace the throttle cleaners and other crap they push now.... will they offer Wiring Lubricants or Magnetism Inhibitor sprays instead?)

There were definitely people doing serious EV comparison shopping - but one sensed that they were all people who were not shopping with price as a consideration. (All consumer shows have a drool/ dream factor to them, I know, so maybe price only kicks in when people sober up later)

AI was not featured...l expected much more of that. Nobody was showcasing self driving vehicles or claiming to be in the lead on that technology. Driver assist, however, was pretty much everywhere.

What the manufacturers seemed to be pushing most was the big screen in-car entertainment and communication systems. “Android/Apple Compatibility” was the phrase I heard most... much more than “green” or “low gas mileage”. Clearly they were selling to a market that is addicted to their smartphones. The touchscreen may have replaced colour or horsepower or body styling as the sexiest aspect of car design. That seemed to be where the auto companies were putting their emphasis. One wonders how the pool car future vision will address that.

My sense is, while here we may be discussing auto tech a bit technocratically, out the in the real world cars are still largely a consumer product that is sold on sizzle rather than steak. I do think price will prevail in the end, but for EV that shift is still invisible. And, as I said above, car shows are drool/dream events - the realities sink home when one does numbers at the dealership.

- Paul

We're still way too early for the electric wave. Also the auto show ain't exactly a great showcase. Still far too many gearheads focused on the loud and cool as opposed to the cheap and practical.

The price drops will come when companies move to building on dedicated EV platforms and stop throwing battery packs and motors into existing chassis designs. I would argue the Volkswagen MEB platform as the first mass market EV platform put forward by a mass market OEM. That is what will see prices drop. They've not yet committed to sending the ID3 to Canada, which is the replacement for the Golf and selling like gangbusters in Europe. Though there are rumours they are considering the popularity of the Golf in Canada, vs. the US. They are planning on sending the ID4 SUV here. And prices on both these platforms are now something like CA$5k more than similarly spec'd gas vehicles, without subsidies. VW saw 10 000 pre-orders in 24 hours for the ID3 launch. It's not Tesla numbers. But those are shocking numbers for a VW. Those are customers willing to pay the full price up-front from a company that has a traditional dealer network and will let you buy them the traditional way in 6-12 months.

I urge everyone to go through VW's corporate plan to see where this is going.

https://www.volkswagenag.com/presence/investorrelation/publications/presentations/2019/12_december/20191202_I_VWAG_Investor_Roadshow.pdf

And if you can wait, I would recommend it. The wave doesn't arrive in earnest until Fall 2021. I am holding out till 2022 to replace my 2013 compact hybrid. If I have to go before that, I'd actually buy a used 5-year old and replaced with an EV 3 years later. Once the wave arrives, gas cars are going to start devaluing quicker too.

 

[kEiThZ]

I don't think that it's so much about being addicted to smartphones as much as car companies recognizing that they can't hope to compete with Google and Apple when it comes to interface, updates and connectivity. So Android Auto and Carplay are ways to harness the power of the smartphones that everyone has anyway to bring an up to date interface and apps to your car's screen.

I have friends with built in GPS where the maps haven't been updated in years. Another friend just bought a new car with Android Auto but no built in GPS since Google Maps is better than anything that could be built in. And it's not just maps. You can use it to listen to Spotify or mp3s from your phone. Or have it read WhatsApp messages to you as they come in. Or using voice commands to send a text.

Good points. I wouldn't actually discount Android entirely. A lot of automakers are so hopelessly behind on software, they can't ever catch up and are basically outsourcing the entire OS for some cars to Google. Read up on Android Automotive, which is beyond Android Auto.

 

[crs1026]

And if you can wait, I would recommend it. The wave doesn't arrive in earnest until Fall 2021. I am holding out till 2022 to replace my 2013 compact hybrid. If I have to go before that, I'd actually buy a used 5-year old and replaced with an EV 3 years later. Once the wave arrives, gas cars are going to start devaluing quicker too.

My 2006 may not make it to 2022, but I'm definitely considering the used beater option rather than buying new. Or lease for the gap.

- Paul

 

[crs1026]

This slide sure piqued my curiosity.

- Paul

 

[mdrejhon]

The first is the daily usage profile. From 7 am to 9 am and from 5 pm to 7 pm, lots of cars are needed to drive their owners to/from work. If you don't own one, you will have a hard time finding one available for rent. Of course you can take public transit, walk, bike etc, but then you are not participating in the car-sharing at all. Outside those hours, you might see lots of cars available for hire, but the demand for them will be limited.

Your ride should ideally be to mass transit -- e.g. your nearest rapid transit station.

Ideally, that's what your autonomous ride hail will cheaply do for you in a mid-21st-century suburb. Governments do need to build rapid transit close enough however, which is indeed a concern. You might subscribe to a shuttlepool service instead if there's enough residents that are going to a faraway destination along similar / same routes. This is how UberPool works, but it should work even better in the future to automatically create virtual buslike routes (multiple ridehail services should be incentivized to pool-aggregate in certain regions)

Smart AI will tell you "We notice you're frequently using autonomous ridehail to Markham Business Campus. There is now a new daily express ShuttleHail Bus that takes less time if you are willing to walk 4 blocks to wait for it at X..." Various rebalancings will be done with intermediate-size vehicles (shortbus carpool shuttles) between solo AV and full size buses, as demand warrants.

Incentivization should occur to encourage improvement of transport quality, and the automatic creation of new virtualized carpool routes along the axises of heavy solo autonomous ridehail use, creating defacto rapid transit. And with the Big Data available on this, creates business justifications for government-upgrade to rapid mass-transit routes (official bus route, mass transit, etc).

I know I’m a sceptic in this thread of optimists but how deep do you think this sharing and av as transport will penetrate? People are icky and own vehicles for all kinds of speciality uses and status displays. I’m thinking personal vehicle ownership as a percentage of the total fleet in a place like Canada will be unlikely to dip below 50% regardless of technology.

It's a somewhat solvable issue. Future AVs can chauffer themselves to a maid-cleaning service too -- and there's the option of neighborhood pooling (e.g. granting permissions to carshare only to your neighbours / family / friends you trust, with automatic insurance-included apps that take the work out of that stuff for you)

 

[kEiThZ]

This slide sure piqued my curiosity.

- Paul

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I've said this before. A lot of the legacy automakers don't realize how much the game has changed. Something like half of Tesla's employees are involved in software in some form. It's single digits for legacy automakers. Recruiting and developing that kind of talent takes years. There's going to be some automakers that will never be able to catch up and make the transition.