Next Gen Mobility
Some people say it’s all about the journey,
and I’m inclined to agree with them. But instead of focusing on flights to an exotic destination, or a cruise through the Bahamas, it’s worth examining the mundane to find real game changers. That means taking a look at the daily commute—such a ubiquitous part of our lives—which ranges from the dull to the head-banging “a snail might be traveling faster” variety depending on where and when. Tedious though the commute may be, it is important to development, and represents a huge frontier for change.
So what’s happening?
Let’s start with our beloved automobiles. The first thing to note is the sheer amount of usage we get out of them. Looking at the raw numbers, people across the US drove a total of 288.1 billion vehicle miles in just the month of July this year. And this figure is 0.3% greater than July 2017 (which seems less modest when you realize it means an increase of 800 million). As has been the trend for several decades, Americans are driving (and riding) in cars and trucks more and more. Anyone who can successfully implement a change in the way we use our automobiles will transform our society, and will likely reap considerable rewards in doing so.
The second thing to talk about is the groups and technologies poised to capitalize on such a tremendous market. The quest for the new age automobile has given rise to some of our most talked about organizations and people: from Tesla to Uber to Waymo. And it just so happens that these groups represent the three big areas of change in automobiles (there is a fourth, but I’ll get to that later).
The first change is the shift from gasoline-driven cars to electric ones- spearheaded by Tesla. And despite repeated negative cash flow and the late start to ramping up Model 3 production, Tesla has a greater market cap (as of this writing) than does fellow car manufacturer Ford (which has substantially greater sales numbers). This difference in value speaks volume to the belief that companies like Tesla are the future. And while Tesla may implode or explode over the next few years, other companies will continuously try to push the same agenda of popularizing electric vehicles. Energy efficiency would improve, and the environment would certainly be better served.
The second change is the redesign of the ride-hailing and (hopefully) ride-sharing systems, represented by Uber. Ride-hailing is an old concept, which previously was dominated by taxis. Nowadays, Uber (and its competitors Lyft and Via) have been able to combine technology in such a way as to streamline the process and reduce the age-old anxiety of “will my cab come on time, if at all?” Ride-sharing is a bit different, the operative word being “sharing.” Systems like these actually help reduce vehicle miles driven by allowing for the inclusion of multiple passengers per ride. If Uber-like services can get this concept to take off, then streets stand a chance of being less congested (a huge win in my book) and we can be more efficient in how we use fuel.
Finally, we have Waymo, an Alphabet subsidiary and a pioneer in self-driving technology. And by this, I don’t mean driver assistive functions like automatic parallel parking or pedestrian avoidance systems. I mean the “real deal:” fully autonomous, with no humans. This technology, perhaps more than any other, will revolutionize the way humans get from point A to point B. It could enable us to be safer, more entertained, and more efficient. And Waymo—as one of the companies at the forefront of the research—is valued at as much as $175 billion. If that doesn’t attest to how impactful the technology could be, you are quite the committed skeptic.
While each of these three areas of change are substantial on their own, put together they become clear game changers. In the not too distant future, we could see fleets of self-driving, electric cars waiting to be hailed to pick you up. Then, the controlling software notes a similar waiting person, and picks them up to minimize wait times and maximize movement. Once done right, the system will be so effortlessly smooth that we will hardly recognize society without it.
Remember that fourth big area of change in the automobile sphere I mentioned? As it turns out, the next generation of automobile owners is the source (yes, that means it’s finally time to address the millennials in the room- pun intended). Long story short, millennials seem to be owning proportionally fewer vehicles than previous generations. To sum up why, a simple answer should suffice. And I couldn’t have written it better than Quora writer Rebecca Massey when she addressed this very same question: “Lots of us don’t need cars” and “Lots of us can’t afford cars.”
That first quote boils down to the trend of increasing numbers of millennials living in cities. And according to projections from the CIA, the US and many other developed nations are continuing to urbanize (the US at a rate of 0.95% population change). Cities present a unique issue for automobile owners because substantial penalties are de facto levied against them. Parking is oftentimes inconvenient or unavailable, and struggling through traffic is a lot easier when you are taking a taxi or walking. Besides, when you live so close to where you work, and alternative modes of transportation exist, why bother with the inconvenience of a car? Therefore, it is not an entirely surprising choice for millennials living in increasingly populated cities to opt out of automobile ownership.
The second quote is far more direct, and refers to the expenses of automobile ownership. Parking isn’t always cheap, and car payments certainly aren’t, especially when you are already paying rent, eating out, and working off student loans as so many millennials are. All of this might indicate that consumer trends among millennials- and not transportation technology companies- are the biggest drivers of change in the industry. For instance, I might consider not owning a car in the near future if I could just as easily be chauffeured around town by an Uber driver- or better yet call upon a fleet of autonomous vehicles.
As baby boomers retire, millennials take the reins of the economy and seem poised to drive these trends to new levels. Companies in turn are reacting to the soon-to-be dominant consumers by developing technologies in the three categories of change. I for one can’t wait to see what future developments millennials and the companies that serve them will drive. A new age of mobility is certainly on the horizon.