IT Maturity, Inc. Newsletter #24
Cars are on the Roads now and Will hit the Market Around 2018! How Will This Affect Your Business (Part 3 - The Details)?
In IT Maturity Newsletters #2 and #12 we discussed the history and near future of Autonomous
Vehicles and highlighted how the approaching change due to Autonomous Vehicles will be greater than that posed by the transformation from horses to cars.
In this newsletter we give a summarized history from previous newsletters, discuss what has happened in the last couple of years since the publishing of Newsletters #2 and #12, as well as provide a more
detailed projection (educated guesses to make this real for the reader) of how this change will progress in the future on a year by year basis and the likely associated business impact.
Part I - Summarized History
- In the late 1980’s autonomous vehicles were going hundreds of feet.
- By 2003 they had reached thousands of feet (i.e. no giant steps in fifteen years).
- A major advance occurred in 2004 and one vehicle went just under ten miles in a DARPA competition.
- In the same DARPA competition one year later in 2005 another major advance occurred, five vehicles went a hundred plus miles.
- In a follow up DARPA competition in 2007, there was another major advance -six vehicles went
55 miles in traffic in a simulated environment on a military base (sans traffic lights and pedestrians).
- In 2008, GM (part of the 2007 winning team and in general a conservative company) predicted
that autonomous vehicles would be on the market by 2018.
- In 2010 - Google (which now employs the leader of the 2005 winning team) reported having traveled 140,000 miles on real roads with prototype autonomous vehicles.
- By 2010 autonomous vehicle elements were in brakes (anti-lock), speed control (cruise control), and even parallel parking.
In 2013, we have the following additional advances:
- In 2012, Google has stated that they are now at 250,000 miles.
- Audi is publicizing prototypes that not only parallel park, but also travel down streets to find
parking spots. The prototype also travels through parking lots looking for spots and self parks. In the demonstration the driver left the vehicle at the front of the parking lot and picked it up at
the same location.
- In Japan they already have vehicles on the market that will look for a parking spot in a lane and with the permission of the driver will self park.
- Numerous manufacturers have vehicles on the market with “safety features” that will provide
autonomous speed control (beyond cruise control) by automatically slowing down a vehicle if it is getting to close to another vehicle, as well as provide autonomous lane control in situations
where a vehicle is veering out of a lane or trying to change into a lane that is already occupied.
Part II - Likely Timeline (in line with GM 2018 Prediction)
- In 2014, look for vehicles being on the market the will do full street and lot parking. Just one
step beyond what Japan is doing today, and inline with Audi’s prototype.
- In 2014 also look for vehicles being able to do autonomous emergency stops in an ever broadening category of situations.
- In 2015, look for vehicles to do lane switches autonomously upon the command of the driver. They will look for (and make) an opening and take it.
- In 2015 also look for vehicles to autonomously control stops at stop signs and street lights as a safety feature.
- In 2016 look for vehicles to do freeway exiting and entrances autonomously on command of a
driver or due to a programmed navigation route. This will by necessity include freeway entrance lights and other freeway entrance and exit variations.
- Autonomous emergency stops will cover almost the full gamut of situations by 2016.
- By 2017, expect higher end vehicles on the market to do major street and residential road turns on driver command, as well as curvy road handling.
- Also in 2017, look for autonomous emergency dodging to cover almost the full gamut of situations.
- In 2018, expect autonomous vehicles to handle the full route, including dirt roads. The driver
will actually be considered a liability as drivers have attention gaps, while autonomous systems (with redundancies and self-monitoring) behave monotonously the same all the time.
- Fully autonomous trucks, off road vehicles, and boats should follow in 2019 and 2020.
California and Nevada already have laws permitting autonomous vehicles and numerous other states are looking to do the same (e.g. Michigan).
Part III - Services
In IT Maturity Newsletter #12 we discussed how the transportation market would evolve after the
introduction of fully autonomous vehicles (ie. after 2018). Most vehicles and vehicle dimensions are
for contingency uses. Vehicles have four, six, or more seats and trunks just in case. Similarly, vehicles
are parked close by, just in case they need to be used. When vehicles no longer need drivers (where drivers can be seen as an extra cost) many aspects of our current model will quickly change. Those
businesses at the forefront will be able to profit, while those caught unawares will loose.
What follows is a likely timeline of these changes:
- In 2018, expect vehicles that can take your kids to school (with camera verification of their
arrival), come back to take your significant other to their place of work, come back and take you to your destination, then go get your mother and take her to the doctor and to do some
shopping, followed by collecting some rental fees by transporting a couple of riders (there are already web sites where you can rent out both your own vehicle or home for a limited period of
time), and finally park itself on a residential street (for free) waiting for its next assignment.
- Expect services to be available in 2018 that will manage your vehicle for you or that will provide
vehicles to you on demand (within agreed upon time limits and vehicle characteristics). Logistics companies will thrive that are best able to project how many vehicles are needed in
different locations at which times of day.
- Two seat vehicles will become more dominant, as most transportation needs are for fewer
passengers. Logistics services will be able to handle contingencies of additional passengers by self-delivering larger vehicles when necessary. Expect service contracts to include several
vacation weeks with larger vacation vehicles as part of their standard packages.
- By 2020 expect services that combine small electric powered vehicles with bus service to reduce
costs (the viability and cost benefit of electric vehicles is much greater in small vehicles, buses,
and trains than in sedan style vehicles). Riders will likely arrive at their destination more quickly
via “door -to- small vehicle -to- bus -to- small vehicle -to- door”, than with “single vehicles
traveling in non-multiple passenger lanes -to- parking -to- walking to destination”.
- In 2020 look to see exotic variations being introduced including small electric vehicles
attaching to larger charging vehicles that transport chains of the smaller vehicles via freeways, or rail tracks. The constraints of having a driver will dramatically alter transportation and its
complete structure, similar to the introduction of horse-less carriages of a century ago. Some manufacturers are already working with chains of autonomous vehicles in Italy.
- This transportation alteration will be integrated with an alteration of the nature of delivery. But
we leave the discussion of delivery details to a following newsletter. In Newsletter #12 we provided a general outline.
Part IV - Loosers
Many readers not only want to know how this will impact them as consumers, but also how this will
impact their businesses. As not everyone replaces their vehicle at the same time, the move to completely autonomous won’t happen all at once.
However, as there will be a significant cost incentive to move from supporting an self-owned vehicle
infrastructure to a service model, the move will likely be accelerated beyond the normal vehicle renewal cycle. Likewise the move to driver-less commercial vehicles will be accelerated due to cost
Vehicle infrastructure costs include insurance, gas, time (both for driving and maintaining vehicles),
space (garages), vehicle cost, and vehicle maintenance. Services will undoubtedly far out optimize what individuals will be able to accomplish once the cost of having a driver is eliminated. This will be
particularly true as right-sizing of transportation (vehicles that match who/what is being transported) becomes optimized. Right-sizing to electric will dramatically impact gas consumption.
What follows is a list of the most likely impacted businesses, followed by a spreadsheet of likely year
by year changes. While even the starting statistics are open to significant interpretation this is an educated best guess. We use a higher than normal vehicle yearly change rate of 15-20% because of the
above mentioned cost impacts. For the final percentages of what will be left of the non-automated vehicle industry, think of what is left of the horse industry as the best analogy.
- Look for 2018 to be the year that professional drivers (most are truck drivers) start being
replaced. This should approach 2 million jobs being lost a year as time progresses.
- The automobile industry is a $180 billion business with a quarter million employees.
- Vehicle Law enforcement includes about 350,000 employees. Lawyers, court personnel, prisons will likely also be impacted as DWI’s will disappear.
- The health industry will also be impacted as there are about 400,000 vehicle accident patients in the US per year.
- The collision repair industry will almost disappear at the end of the transition.
- Dealers will also likely disappear and be replaced by services. While parking lots will be needed
to store vehicles at night, they will likely be distributed and may use the parking lots of other businesses on a fee basis.
- As right-sizing of vehicles will lead to more electric vehicles, look for the gas business to decline.
Should people be investing in new vehicles now, even though that investment will take a significant
dip when the transition to services is started in 2018. The answer is yes, the change is still to far away.
But expect a small dip in vehicle sales to start in 2016, when leases will become more popular due to the impending change. This will be offset by a skyrocketing growth of service vehicle sales in the
following years. Manufacturers will likely do extremely well during the transition years.
Conservative companies are likely to fail in high numbers and quickly, as they will be unaware of the
impending changes. Too liberal companies are likely to similarly fail, as they will be too far ahead of the curve.
Investing in infrastructure in an old way of doing things is like flushing money down the drain.
Companies unaware of the impending changes will likely invest in infrastructure that will soon become useless. This includes investing in products and research that will become valueless due the
approaching revolution in automation. Take for example a vehicle part supplier who is only looking at
developing parts that fit today’s traditional sedan. As services and right-sized electric vehicles take
over, if the supplier only has parts that fit the disappearing sedan, the suppliers business is likely to fail. The converse is true for suppliers that prepare for the impending change. IT Maturity provides services to help businesses prepare for and take advantages of change in IT and automation.
Part V - Winners
Who will the winners be? The first criteria, is that they prepare and take action (i.e. work with consultants such as IT Maturity).
Even some of the big losers in the above lists can profit by diversifying and preparing for the coming
transformation. For example dealers can move into the logistics/service business as they already have fleets of vehicles, space, and vehicle maintenance business elements.
- Service companies will be the biggest winners. This will include a diverse group of consortiums
still to form, with logistics, sales, automation, and maintenance expertise.
- Bus and train industries will likely boom (including associated manufacturing) due to the greater
ease they will have in integrating with automated vehicles (compared to the difficult integration they have today with driven vehicles).
- The electric vehicle industry will boom, as the viability and cost benefit of electric vehicles is
much greater in small vehicles, buses, and trains (compared to sedan sized vehicles). Assuming no new energy forms become available that have even lower costs.
- Manufacturers and suppliers in line with the change in size and type of vehicles will become dominant.
- Home remodeling will boom as garages will become a part of the home as opposed to vehicle storage locations.
- Consumers will benefit dramatically in both money and time savings.
- The community at large will benefit, as city, state, and national transportation budgets will be reduced.
If you are oblivious to changes occurring in your business environment, its like treating your
investments like a casino. As significant impact from autonomous vehicles is likely to start happening around 2017-2018, and major product line lead time is 3-5 years, companies should start planning in
the 2013-2014 time frame.
IT Maturity provides training and consulting in a comprehensive IT Maturity Methodology that can be
used to mature enterprises so that they are methodically and continually prepared for Technology, Business, Vendor, and Leadership changes. This includes insights into many of the impending IT and
automation changes that will dramatically alter tomorrow’s business world. Contact information for IT Maturity is given below.
You can purchase the Online Leadership Improvement course at http://itmaturityinc
.com/shop/products-page/leadership-training/ and the book at Leadership Improvement: The IT
Maturity Method by Justin Coven, Ph.D.
If you have questions, would like to discuss the material, want to network, want to take the full IT
Maturity Method course (includes Business Enhancement, Technology Advancement, Vendor Integration, and Leadership), or want to schedule in-house training (Option 1: Full IT Maturity Method;
Option2: Leadership and Innovation) please contact us via the below contact information: