In reflecting on thoughts from the previous decade, I looked back at Automation and Digital Transformation. Today I will focus on autonomous vehicles. I first wrote about them in 2014 when I looked at their Disruptive Potential. At the time, the compelling case for moving to full autonomy was truly clear. From the post:
In a recent book titled: The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups, the authors (Chunka Mui and Paul Carroll) dig deeper into this topic. About 5.5 million U.S car accidents occurred in 2009 involving 9.5 million vehicles; the accidents killed 33,808 people and injured 2.2 million others. The total accident related costs in the U.S. are estimated to be roughly $450 billion.Autonomous vehicles: a disruption case study
The focus was to shift to preventing crashes versus previous efforts to ensure accidents were survivable. Automobile makers would rethink the design and construction of cars from built to survive a crash, to built to avoid them. A report titled Preparing a Nation for Autonomous Vehicles predicted mass market adoption of autonomous vehicles between 2022 and 2025. My post mentioned announcements by Nissan and Volvo of their intentions to have commercially viable autonomous-driving capabilities by 2020. In their view back then, it would take an additional five years for prices to drop to allow for some degree of mass-market penetration.
What makes a scenario like driverless cars critical to understand is the breadth of its disruptive reach. It puts approximately $2 Trillion in the United States in play: the summation of revenues for carmakers, dealers, rental car companies, body shops, healthcare providers, and more. As stated in my post, to put the possible impact into perspective, Google claimed that the technology would save 30,000 lives and reduce accident-related expenses by at least $400 billion per year. This creates a disruptive effect of hundreds of millions of dollars for hospitals, car repair businesses, Insurance companies, car dealers, lawyers, and many others.
Even if full adoption is never realized, a 20% adoption rate of incremental driver-assist technology might result in significant enough reductions in accidents to trigger material reductions in premiums – driving a material impact on premiums long before fully autonomous vehicles become ubiquitous. However, here we are in 2021 and much of this disruption case study has not materialized. Why? A partial answer is found in a recent announcement that Lyft Gave up on Autonomous Vehicles. Per the article, Lyft is the latest company to raise the white flag and give up on its self-driving ambitions. The company is selling its autonomous vehicle division to Toyota for $550 million. Lyft expects to stop bleeding about $100 million annually as a result of the divesture. This comes on the heels of Uber selling its own self-driving car division to startup Aurora. In each case, they saw driverless taxis in the immediate future, in Lyft’s case, they said it would happen by 2021. This early excitement was tempered by realism, as companies came to understand that realizing this future was harder than it looked.
Early success teaching cars to follow lane markings was followed by much slower progress with, well, just about everything else. When Uber sold its autonomous division, its cars reportedly still couldn’t drive more than half a mile without human intervention — and that was after spending five years and billions of dollars on the project.Tom Maxwell
Some of the reasons for more conservative predications include, safety, a low tolerance for errors, and the difficulties navigating the legal side of this transition. The Lyft article gets into details surrounding the slow transition to autonomy. Slow however is not never. Seven years since I first explored the topic, expectations have not been met. When we look back from 2025, will some of these predictions come to pass? I’ve included the full series on the topic below, spanning the years 2014-2020. I also included this video interview with Chunka Mui – an expert on the topic of autonomous vehicles. A phrase that stuck with me from that interview seems to fit nicely today: “Patient Urgency.”