In my recent post about why I write about tech on this city building blog, I made a pithy comment about autonomous vehicles and why it is “largely a software challenge.”
The argument I was trying to make was that the hardware, similar to smartphones today, will likely become a commodity. More of the value will end up flowing to the firms that control the software.
Benedict Evans has an excellent deep dive into this topic on his blog. The post is called: Winner-takes all effects in autonomous cars.
Here’s an excerpt about hardware:
To begin with, it seems pretty clear that the hardware and sensors for autonomy - and, probably, for electric - will be commodities. There is plenty of science and engineering in these (and a lot more work to do), just as there is in, say, LCD screens, but there is no reason why you have to use one rather than another just because everyone else is. There are strong manufacturing scale effects, but no network effect. [My link, not his.]
And here’s his conclusion:
So, the network effects - the winner-takes-all effects - are in data: in driving data and in maps.
That said, it is still early days for autonomous vehicles. Who knows if these network effects will end up being highly defensible or weak. There are still lots of assumptions and questions at this stage.
From a city building perspective, one of the major concerns with autonomous vehicles is that they could tempt us back to car-centric city planning. That would be a shame.
Photo by Zachary Staines on Unsplash
Designing a building for 5+ years into the future can be tricky. The pace of change in the world today is astounding.
Last month Seth Miller published a Medium article called: This is how Big Oil will die. His argument is that the cost of running an electric self-driving vehicle will be so low – simpler technology and no labor cost – that the personal vehicle as we know it will come to an end. People are inevitably going to give up their cars, which will result in a peaking of oil consumption.
We’ve talked about this future many times before on the blog. But Miller’s argument ties it back to oil and also comes with a set of predictions taken from a report prepared by the consulting company RethinkX:
- Self-driving cars will launch around 2021.
- A private ride will be priced at 16¢ per mile, falling to 10¢ over time.
- A shared ride will be priced at 5¢ per mile, falling to 3¢ over time.
- By 2022, oil use will have peaked.
- By 2023, used car prices will crash as people give up their vehicles. New car sales for individuals will drop to nearly zero.
- By 2030, gasoline use for cars will have dropped to near zero, and total crude oil use will have dropped by 30% compared to today.
If all of these predictions prove to be true, then what should we be doing today to prepare our cities for this future?
I would like to pull out one more idea from Derek Thompson’s article, What in the World Is Causing the Retail Meltdown of 2017? It is this prediction that self-driving cars could maybe become the new retail store:
“Once autonomous vehicles are cheap, safe, and plentiful, retail and logistics companies could buy up millions, seeing that cars can be stores and streets are the ultimate real estate. In fact, self-driving cars could make shopping space nearly obsolete in some areas. CVS could have hundreds of self-driving minivans stocked with merchandise roving the suburbs all day and night, ready to be summoned to somebody’s home by smartphone. A new luxury-watch brand in 2025 might not spring for an Upper East Side storefront, but maybe its autonomous showroom vehicle could circle the neighborhood, waiting to be summoned to the doorstep of a tony apartment building. Autonomous retail will create new conveniences and traffic headaches, require new regulations, and inspire new business strategies that could take even more businesses out of commercial real estate. The future of retail could be even weirder yet.”
It’s an interesting idea. And perhaps not as far fetched as it may seem. Delivery timelines are constantly being compressed. And as the purchasing data gets better, it may be possible to anticipate sales before they even happen such that you’re minimizing the amount of unsold product being hauled around.
I’m going to end here because it’s now time for some Raptors playoff basketball. But what are your thoughts?
In my recent post about why I write about tech on this city building blog, I made a pithy comment about autonomous vehicles and why it is “largely a software challenge.”
The argument I was trying to make was that the hardware, similar to smartphones today, will likely become a commodity. More of the value will end up flowing to the firms that control the software.
Benedict Evans has an excellent deep dive into this topic on his blog. The post is called: Winner-takes all effects in autonomous cars.
Here’s an excerpt about hardware:
To begin with, it seems pretty clear that the hardware and sensors for autonomy - and, probably, for electric - will be commodities. There is plenty of science and engineering in these (and a lot more work to do), just as there is in, say, LCD screens, but there is no reason why you have to use one rather than another just because everyone else is. There are strong manufacturing scale effects, but no network effect. [My link, not his.]
And here’s his conclusion:
So, the network effects - the winner-takes-all effects - are in data: in driving data and in maps.
That said, it is still early days for autonomous vehicles. Who knows if these network effects will end up being highly defensible or weak. There are still lots of assumptions and questions at this stage.
From a city building perspective, one of the major concerns with autonomous vehicles is that they could tempt us back to car-centric city planning. That would be a shame.
Photo by Zachary Staines on Unsplash
Designing a building for 5+ years into the future can be tricky. The pace of change in the world today is astounding.
Last month Seth Miller published a Medium article called: This is how Big Oil will die. His argument is that the cost of running an electric self-driving vehicle will be so low – simpler technology and no labor cost – that the personal vehicle as we know it will come to an end. People are inevitably going to give up their cars, which will result in a peaking of oil consumption.
We’ve talked about this future many times before on the blog. But Miller’s argument ties it back to oil and also comes with a set of predictions taken from a report prepared by the consulting company RethinkX:
- Self-driving cars will launch around 2021.
- A private ride will be priced at 16¢ per mile, falling to 10¢ over time.
- A shared ride will be priced at 5¢ per mile, falling to 3¢ over time.
- By 2022, oil use will have peaked.
- By 2023, used car prices will crash as people give up their vehicles. New car sales for individuals will drop to nearly zero.
- By 2030, gasoline use for cars will have dropped to near zero, and total crude oil use will have dropped by 30% compared to today.
If all of these predictions prove to be true, then what should we be doing today to prepare our cities for this future?
I would like to pull out one more idea from Derek Thompson’s article, What in the World Is Causing the Retail Meltdown of 2017? It is this prediction that self-driving cars could maybe become the new retail store:
“Once autonomous vehicles are cheap, safe, and plentiful, retail and logistics companies could buy up millions, seeing that cars can be stores and streets are the ultimate real estate. In fact, self-driving cars could make shopping space nearly obsolete in some areas. CVS could have hundreds of self-driving minivans stocked with merchandise roving the suburbs all day and night, ready to be summoned to somebody’s home by smartphone. A new luxury-watch brand in 2025 might not spring for an Upper East Side storefront, but maybe its autonomous showroom vehicle could circle the neighborhood, waiting to be summoned to the doorstep of a tony apartment building. Autonomous retail will create new conveniences and traffic headaches, require new regulations, and inspire new business strategies that could take even more businesses out of commercial real estate. The future of retail could be even weirder yet.”
It’s an interesting idea. And perhaps not as far fetched as it may seem. Delivery timelines are constantly being compressed. And as the purchasing data gets better, it may be possible to anticipate sales before they even happen such that you’re minimizing the amount of unsold product being hauled around.
I’m going to end here because it’s now time for some Raptors playoff basketball. But what are your thoughts?
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