The Future of the Auto Industry: Connected, Shared & Driverless

Innovators in the auto tech industry weigh in on the future of personal and shared transportation

what is the future of the auto industry

There’s a new “coolest thing” in auto tech every single day, it seems. Today you probably read about the latest innovation in driverless technology or another ride-sharing company on the scene. No doubt transportation has a lot of irons in the tech fire. Here, leading entrepreneurs in the automotive technology world weigh in on what new car tech we’ll see come to life tomorrow, or a little further down the line, which will define the future of the auto industry.

First cars will become connected. Then autonomous. Then we’ll share them all. That is the future of the auto industry.

Assuming we keep to our current ownership model, we are tracking to put two billion cars on the planet within the next decade  yet most of the 250 million cars in the U.S. sit idle 22 hours a day. Sam Zaid, founder & CEO at carsharing community Getaround, says this behavioral pattern is not sustainable, which means we need to break the current ownership model. But how?

Zaid said this disruption in the future of the auto industry will occur by enabling cars to become shared, first through adding connectivity (“the connected car”) and then through autonomy (“the autonomous/driverless car”).

Most of the 250 million cars in the U.S. sit idle 22 hours a day.

Getaround is working on the former with its technology that enables drivers to lend their cars to others for a fee, or to borrow someone else’s vehicle for a few hours  or even days. The app allows people seeking these exchanges to find each other, but the vehicles themselves are connected, too. Approved drivers can unlock doors and access their rental cars from their smartphones without the owners present. And as we’re increasingly able to tell cars what to do, driverless cars will become a part of the sharing economy.

“We envision a world where companies, individuals, and micro-entrepreneurs all own cars rather than the current one-to-one ownership model,” Zaid said. “In this world, people specialize in ownership while others just consume transportation as a service.”

Man with car key in hand represents the future of the auto industry

You’ll buy transportation the way you buy music.

The Silvercar team believes in the model in which consumers buy what they want, pay for what they use, and do it on their phones  and this goes for personal transportation, too.

“We are at beginning of profound shift in the way we all get around,” said Luke Schneider, CEO of Silvercar and former CTO of Zipcar.

Personal transportation remains a way of life for most folks, as evidenced by 2015 being the best year ever for car sales in the U.S. Considering the three big segments of personal transportation  owned at $1 trillion, shared at $27 billion, and livery (vehicle for hire, taxi or chauffeured limo) at $18 billion  it’s particularly hard to ignore “the $1 trillion gorilla” because that’s the singular mode of transportation some people have used their entire lives.

“But everywhere in the world, the consumer model is changing,” Schneider said. “Take music, for example. It used be owned  full albums on records, cassettes, CDs. But now you have a device that lets you download music  even just one song  over the air. Even better, music streaming services let you ‘rent’ a song by the listen. Music is a great indicator for the way consumer behavior and consumer models are changing. The question is, ‘Why has personal transportation been late to this party?’”

We have devices that let us download music over the air - why can't we use this tech for cars too?

Schneider said that several factors will lead to people owning fewer cars, which will in turn change how people share them and share their costs:

  • Connected cars: While historically “connected cars” pumped information and entertainment into cars, these vehicles are now increasingly connecting with their surroundings and employing big data to make “informed” operational decisions.
  • Autonomous cars: Cars that can drive themselves will have a profound impact on traffic, safety, and how people perceive transportation.
  • Electrification: Electric power trains replacing gas-powered engines will change the planet and how people get around.
  • Mobility: Mobility is about access to the transportation asset itself  getting people to the right vehicle for the right use, location, timing, etc. 

Schneider said that technology exists to make it easier to share the costs of things, and that people inherently want to be more mobile  they want more transportation.

highway headlights: how does this fit into the future of the auto industry

So…how does it all go down?

“It’s going to be an evolution,” Schneider said of the future of auto industry for sharing (rather than owning) cars. “People might own a car, as well as have fractional access to multiple cars. They want more transportation and, if it’s decreased in price, they will use more.”

Without individual ownership, who will own all the cars?

According to Schneider, it will be a mix of automakers themselves, leasing companies and rental companies, corporations (employers purchasing for professional use), government (for government fleets), and the dealerships.

And who will insure them if there are multiple drivers and varied ownership models?

Zaid envisions a usage-based “follow the driver” model in which drivers will be rated on the way they drive, and will factor an insurance cost into the underlying costs of using (renting) the vehicle.

“It will have to be much more dynamic and powered through richer data than we have today,” he said.

“Insurance companies are already starting to explore the best ways to price these new risks, what new products can be offered, and how to underwrite the markets being created,” said Adam Lyons, CEO of The Zebra. “What remains unclear, however, is how regulators will respond to this quickly evolving landscape. Ultimately, state insurance departments have control of how dynamic and innovative insurance companies can be with the data at their fingertips.”

And what happens after we’re sharing and not driving cars?

“Flying cars are an eventuality,” Zaid said. “They’ll enable a completely different disruption.”

  • bewilli

    My main concern is the motherless car. Young children in the car unsupervised or incapable of responding ,being sent somewhere by absentee parents. Legislation and increased cost paid by everyone to circumvent it. The “silver lining” reward goes to the lawyers and google et al.