While the long-term benefits of autonomous vehicles (AVs) are genuinely exciting, the route to true autonomy in transportation will likely be long and full of uncertainty. The precise impact of AVs on individuals, communities, industries and workplaces is, as yet, unclear. One thing’s for sure, though—every industry will be affected. Some will find themselves disrupted; others will find new opportunities for growth and innovation. Both outcomes create a pressing need for businesses to understand the current direction of AV travel, and time to develop a plan to prepare for a future in which AV use is widespread.
The industry is still at the beginning of its journey to translate its undeniable successes in controlled environments into seamless autonomous experiences in the real world. But as the technology is tested and refined, demand for AVs is certain to grow, particularly among the young.
Today’s consumers have become accustomed to intuitive, personalized and seamless experiences, especially when they interact with digital technologies. These expectations are now being transferred to other experiences and other sectors—and that’s having a big impact on the automotive industry. Drivers and passengers alike increasingly expect their vehicles to offer carefully designed intuitive, interactive and, yes, automated experiences.
AVs exist at the leading edge of technological disruption, meaning a great deal of collaboration will be needed in the automotive ecosystem to make them production-ready. But the technologies are evolving quickly: “Intelligent infrastructure” is increasing accuracy and safety, and cost reductions in radar, LiDAR, and camera systems are each bringing AVs one-step closer to reality, notwithstanding current line-of-sight limitations.
Consumer attitudes to vehicle ownership are undergoing a revolution. Ridesharing—or transportation-as-a-service—has seen a meteoric rise in recent years and has disrupted traditional mobility service markets, especially for incumbent taxi businesses.
Dealerships still rely on three traditional revenue streams: car sales, interior and amenities customization and maintenance. But this model relies on large numbers of people owning their own cars. As automation and ridesharing models continue to grow, those numbers will surely decline, especially among the young.
Future sales and service models will likely evolve to focus on differentiation via maintenance services and service option sales, closer to the way the air travel industry operates today.
Digital commerce has enabled consumers to shop anytime and anywhere. Customers have come to expect the freedom to choose same-day and one-hour delivery, reinforced by merchants’ willingness to bundle these options with retail transactions—in a sense, treating expedited service as a differentiator.
Logistics companies face further challenges in predicting asset and personnel allocations, especially during peak holiday seasons and unplanned spikes in demand. These pressures are pushing top logistics providers to initiate extensive cost takeout programs and AV adoption represents an opportunity to take this to the next level.
Insurance companies have been operating some of the most profitable business models in recent history. But auto insurers are not immune from digital disruption. Online sales, usage-based insurance, data analytics and telematics are having a negative impact on profits—all while consumers perceive auto insurance premiums as over-priced and providing questionable claims benefits.
Technology advances in the automotive industry are closing the gap between traditional vehicles and the future state of AVs, and higher levels of automation are expected to yield even better results. Fewer accidents and safer roadways mean fewer claims and a corresponding reduction in risk premium. While the automotive insurance industry is braced for a decline in premium-based revenues, they are yet to fully understand the new types of risk that will accompany AV adoption.
These three industry segments demonstrate that the AV future is closer than it looks. Key players have already started investing to ensure they have a strategy for emerging AV opportunities.
Nothing will change overnight, but AVs will undoubtedly bring dramatic shifts across numerous industries. Now’s the time for each business to start considering the impact of AVs on its own industry and create a game plan. And now’s the time to reassess collaboration models, especially with unconventional partners, to ensure a business gets a seat at the table when AVs really hit the mainstream.
Act now so that your business is a beneficiary—not a victim—in the coming AV revolution.