The Coming Disruption of Transport

[crs1026]

^ I can certainly see the number of competing propulsion designs converge. There may only be a few battery brands. Far too many manufacturers each trying to develop their own systems.

I wonder if the reverse may happen.... can a generic battery/propulsion system be de-integrated from body shell production? Maybe the battery and drive train (with braking and stability included) become Intel/AMD, and the body becomes Dell/Lenovo/HP etc. Lots of room for boutique bodies all using the same propulsion system.

Certainly, the effects on the labour market will be devastating, and I doubt many workers see that coming. So much labour tied to oil changes, spark plugs, muffler replacement. Fluid replacement alone is a huge industry. Let alone assembly of crankshafts, pistons, etc. Huge parts trade.

I wonder what products will emerge to replace the mining that goes on today..... no more throttle carbon treatments and all the other high-markup things that dealers and mechanics try to upsell. Maybe electron polish or battery lubricants ?

- Paul

 

[Midtown Urbanist]

Self driving vehicles have a real future in terms of cargo and transport , delivery services, public transit, taxis, the disabled who can't drive, and the seniors who shouldn't be. For the wider population however, I think they are much ado about nothing because the entire concept proceeds from a false assumption...……….people don't like to drive.

The reality is that most people do like to drive and the freedom it gives them. Giving the finger to the guy who is tailgating you, honking at the moron who won't get out of the passing lane, considering a speed "limit" as nothing more than a suggestion, doing L.A. stops, running yellows, none of these thing will get you to where you are going significantly faster but we all do them all the same. Show me a person who says they don't do these things and I'll show you a pathological liar. I often think of my car the same way I think of my dog...…………….expensive and enough to drive me nuts but I love him to death regardless and I don't know what I would do without him.

People like "being in the driver's seat" and the fun and frustration that comes with it and AV will take that independence and sense of adventure to all the excitement of having tea on the couch at grandma's house.

That might be true for my father's generation.

But I can attest that none of my friend groups cares about any of that. They're more than happy to jump into the back of the uber instead.

The video in the OP is very compelling. If we were faced with a decision to own a vehicle and it's operating cost or to instead purchase a monthly $100 Uber subscription, I am pretty sure which choice most people I know would make. The monthly TTC pass costs $150.

 

[kEiThZ]

The video in the OP is very compelling. If we were faced with a decision to own a vehicle and it's operating cost or to instead purchase a monthly $100 Uber subscription, I am pretty sure which choice most people I know would make. The monthly TTC pass costs $150.

At least one person actually watched the video....


To be fair, it's a US$100.....

The key takeaway here is that technological disruption enables new business models. Uber and Lyft were only possible with the rapid adoption of smartphones. Cheap bandwidth across multiple devices enabled streaming services. I like his example of Starbucks including free transport with a latte because their mobile store is cheaper to operate than a conventional store.

The bigger takeaway is that electrification of transport is now a confirmed trend and far ahead than even a lot of the most optimistic visions. And this stuff is coming like a freight train. I wish the TTC would just make the call and commit to a 100% electric bus fleet by 2030. The tech and costs are apparently here now.

 

[knlaruw]

But I can attest that none of my friend groups cares about any of that. They're more than happy to jump into the back of the uber instead.

Perhaps that says more about your friend groups than a trend over all. I personally hate taking Ubers, mostly because I hate their business model, but also because there other benefits to having and operating your own vehicle, much like there are benefits to owning your home over renting one. I would take transit before taking an Uber.

 

[Midtown Urbanist]

Perhaps that says more about your friend groups than a trend over all. I personally hate taking Ubers, mostly because I hate their business model, but also because there other benefits to having and operating your own vehicle, much like there are benefits to owning your home over renting one. I would take transit before taking an Uber.

I am still too price-sensitive to use Uber most of the time. My use case is usually between downtown and midtown which is typically a $20 ride, I would rather walk x kilometres to the subway and ride up. Said friend groups are typically splitting an $8 ride across downtown between 2+ people, resulting in a competitive trip compared to public transport. If this was turned to a flat monthly subscription, you can bet that I would switch over to Uber.

I am not sure if those benefits of vehicle ownership are outweighing the costs of maintenance, operating, and storage of the vehicle. Certain professionals that require transporting equipment to their job site will likely still see the need and convenience of owning their own vehicle, but the typical office worker less so.

In any case, the point being made here is that there will be a significant preference shift in regards to vehicle ownership in the coming years with the emergence of "Transportation as a Service", and this will have disruptive impact on the economy, public transit, and land use.

 

[ssiguy2]

I use to take transit quite frequently for trips over 10km and for less I used my scooter. Now I haven't taken transit in about 3 years because I got my doggie. I needed a car lest I would have to leave him at home but it's these kind of small things that the policy wonks don't take into account. They view car ownership as a financial decision and not a personal one. They think that as self-driving cars and Uber become more common, people will choose them but people don't buy cars based upon logic or often even need. If they did everyone would be buying a practical and affordable vehicle which they don't.

Cars are a reflection of their owners personal taste and lifestyle as well as being a status symbol. Seriously, who buys a sports car for speed when the speed limit is constant, who buys an Jeep because they want to go on the back roads, and who buys a big and very expensive SUV because they need the space for their 1.2 kids?

For better or worse, cars are an integral part of our culture and sense of self and no amount of potential automation or financial disincentive will EVER change that.

 

[p_xavier]

I use to take transit quite frequently for trips over 10km and for less I used my scooter. Now I haven't taken transit in about 3 years because I got my doggie. I needed a car lest I would have to leave him at home but it's these kind of small things that the policy wonks don't take into account. They view car ownership as a financial decision and not a personal one. They think that as self-driving cars and Uber become more common, people will choose them but people don't buy cars based upon logic or often even need. If they did everyone would be buying a practical and affordable vehicle which they don't.

Cars are a reflection of their owners personal taste and lifestyle as well as being a status symbol. Seriously, who buys a sports car for speed when the speed limit is constant, who buys an Jeep because they want to go on the back roads, and who buys a big and very expensive SUV because they need the space for their 1.2 kids?

For better or worse, cars are an integral part of our culture and sense of self and no amount of potential automation or financial disincentive will EVER change that.

How old are you? As a millennial, driving is one of the things I hate the most. What a waste of time and money. You're a slave to a cheap box of steel which depreciates by 20% the moment you get it out of a dealearship. Car prestige is a boomer and gen-x thing. My house is a ten minutes walk from a train station so no need for local transit either. And buying a vehicle for a dog, really?

 

[lenaitch]

How old are you? As a millennial, driving is one of the things I hate the most. What a waste of time and money. You're a slave to a cheap box of steel which depreciates by 20% the moment you get it out of a dealearship. Car prestige is a boomer and gen-x thing. My house is a ten minutes walk from a train station so no need for local transit either. And buying a vehicle for a dog, really?

Always helpful to pass judgement on the lifestyle choices of others, particularly employing the age comment which seems increasingly prevalent lately.
One could comment about being a slave to a plastic box that is held in the hand and depreciates rapidly, but I wouldn't do that.

I watched the video. He raises some interesting points. Less urban areas and less pristine climates may temper the onset of disruption.

Millions of EV in China, powered by coal. Yay.

I recall years back that similar experts were projecting that technology would result in so much leisure time we wouldn't know what to do with ourselves. I suppose all the folks working part-time gigs just to pay the bills didn't read the same article.

 

[kEiThZ]

Millions of EV in China, powered by coal. Yay.

Absolutely yay!

I hate this particularly strawman. Having EVs powered by coal is still better in most cases than burning gas.

1) Centralizing emissions at a power plant enables carbon capture and better pollution control. We don't burn garbage in our backyards. We shouldn't want to burn gas on our streets.

2) Substitution means improvement in emissions. If at some point those power plants are converted to natural gas, emissions drop. If their power mix grows the share of renewables, emissions drop. Etc. It is far easier to change the grid mix and cut emissions than somehow improve the emissions of the thousands of car powered by the powerplant.

3) Refining, storing and distributing gas takes up a lot of energy. And introduces other pollution and risks. See remediation of former gas stations. All of that is eliminated with EVs.

 

[Johnny Au]

I think there’s a very real possibility that we might see the bankruptcy of one of the Big 3 by 2025.

All of those Big 3 are investing in EVs.

 

[kEiThZ]

I would take transit before taking an Uber.

I am still too price-sensitive to use Uber most of the time.

I am no fan of Uber either (for their business practices). Sadly, the taxi industry was more scummy. The perfect opportunity for disruption.

But people aren't fully comprehending the implications here. Autonomous Electric Vehicles could destroy Uber. Make transport cheap enough and any organization could provide it. That was his point with the Starbucks example. AEVs are the ultimate last mile vehicle for transit operators. No more scheduled bus routes. Possibly no more fixed network. You hit a button on your phone, the closest AEV picks you and drops you at the station. The cost is low enough that the TTC could afford to have a fleet of this providing 5 minute response times anywhere in the 416.

They view car ownership as a financial decision and not a personal one.

It may be personal for you (and that's fine). But it's very much a costly convenience appliance for most people. And given the choice a substantial proportion of the population would do away with personal ownership if they got the chance. We have declining car ownership without autonomous vehicles today. So clearly not a stretch to imagine....

Cars are a reflection of their owners personal taste and lifestyle as well as being a status symbol. Seriously, who buys a sports car for speed when the speed limit is constant, who buys an Jeep because they want to go on the back roads, and who buys a big and very expensive SUV because they need the space for their 1.2 kids?

You know what the great thing about TaaS is? The right vehicle for the right application at the right time. Commuting to work? You get a little pod or the carpool vehicle picking you up. Need something intimate for date night? Press a button and the two seater convertible pod shows up. Need a giant SUV for the dog and 2 kids to go through back roads on the weekend? Just make that reservation before the weekend and it's at your house waiting when you need it.

Not saying all of this happens in our lifetimes. But if we achieve fully autonomous vehicles and society moves TaaS, that's how the idea would work.

 

[kEiThZ]

All of those Big 3 are investing in EVs.

Not nearly fast enough or in substantial enough amounts. Simply offering an electric Hummer or Bolt or F-150 or Pacifica isn't enough. They won't have the battery plants to be price competitive. They won't have the automation and self-driving tech to be competitive. Etc.

For comparison, Volkswagen will ship a quarter million EVs next year and offer electrical models across their entire lineup in 2025. VW is building their own battery gigafactory to enable competition with Tesla. They have to spend 60 billion Euros on developing the EV manufacturing infrastructure to do all this. Show me any of the Big 3 who have invested anything as close.

And nothing condemns the Big 3 more than their staffing mix. Half of Tesla's employees are developers, programmers, etc. At the Big 3, that's in the single digits. Fundamentally, they don't understand that motoring has now become about software.

This year Tesla ships the Model Y. Next year, Rivian and Tesla both ship pickup trucks. Crossovers and pickup trucks are among the most profitable segments for the Big 3. What do you think happens to their profits if their customers decide to go for the Rivian and Tesla offerings? They are about to get run over. There's no sugarcoating this.

 

[Admiral Beez]

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.

Yeah, I’m not seeing why a change in propulsion technology is connected to reduction in car ownership. My family has two cars and a motorcycle, all gas powered. I expect in ten years we’ll have two cars and a motorcycle, all electric powered.

The reason I own a car is for the convenience of getting around when and where I want and the pleasure of being separated from the mob.

 

[kEiThZ]

Yeah, I’m not seeing why a change in propulsion technology is connected to reduction in car ownership.

In this case, the only way true distributed ownership can happen is by facilitating a reduction in operating costs such that large fleets can be enabled. That means the cars have to be electric. The economics do not work for ICE vehicles. Seba goes through this in the presentation.

The reason I own a car is for the convenience of getting around when and where I want and the pleasure of being separated from the mob.

And nothing would stop someone in the future from personally owning a vehicle. Some small percentage might still do it. The point is that the convergence of these trends (electrification and autonomy) could enable a new business model where the cost per mile of TaaS is one tenth that of personal vehicle ownership and operation of a gas vehicle. Most people giving a cheaper option will take it up. Not everybody dropped cable when Netflix and YouTube came out. But more and more people are doing that.

You know the old phrase, "If it flies, f**ks or floats, rent it."? This is the ultimate application of that model to cars.

 

[Rainforest]

Electric has nothing to do with it.
Smart driverless does. That's what causes the ownership change.

You know, the really smart driverless cars that can drive itself unattended to you even in the middle of a snowstorm.

That said, the cost of a car as a percentage of a human income will be bigger in 25 years than today, so it's a confluence of factors

• True, real, trusted driverless-ness.
  Not today's supervised "Autopilot" stuff (even though even with Autopilot accidents, Autopilot is still >8x safer now than driving yourself)
• Rising cost of car ownership as percentage of income
  Cars are getting more expensive. Cost of enhancements / safety improvements / going electric / driverless-ness / etc.
• Tech that makes going car-free easier
  Uber, transit, personal mobility, and soon, self-driving rentals that come straight to your driveway.

Which will slowly drive down the cars-per-capita. Just it won't be 80% reduction in 5 years in most areas though.

We already hit peak car and it is inevitable that the trend will be falling cars-per-capita in North America. We've already fallen from >2-cars average to just about <2-car average per household. 36 years ago, almost half of population got driver license at age 16. Today, that's down to only one-quarter of population.

The question -- for five years from now -- is it a 5% reduction, 10% reduction, 50% reduction, 80% reduction -- that's where the crystal ball becomes cloudy. I just don't think it'll be 80% in only 5 years on an countrywide/aggregate basis -- solving safe AI driving through a moderate driveable blizzard/snowstorm needs to become a solved problem first.

All good points. But, to counter them:

1. True driverless-ness helps car owners as much as it helps car renters. If your car is totally self-driving, then you won't need to study for the licence and pass the test. Just like you don't need a license to use a TV or a dishwasher today.

2. The notion that cars will be getting more expensive, runs against the general observation that all things made of metal, plastic, and semiconductors, get cheaper over time.

Even if the cars do become more expensive due to all the enhancements and AI costs, that extra cost will apply to the car rental companies, too. They'll need to purchase/ amortize their cars, plus add a mark-up for salaries, garage maintenance, insurance against the actions of bad users, and some profit on top of that. Renting may be cheaper for infrequent users, while owning might remain the cheapest option for regular users.

3. Teenagers and young people no longer see car ownership as a part of transitioning to the true adulthood. Therefore, they act pragmatically, and don't buy a car unless they really need one.

That doesn't necessarily mean they will never own a car in their lifetime. A healthy single person can get around easily using public transit most of the time, and rent a driverless car on a few occasions per month. For parents with babies or young children, there is a definite advantage of having a car always available in their own garage.

Overall, I can easily see the per capita car ownership going down 20% or 30% in the next 5 to 10 years, but I doubt it can go down 50% or more.