The perfect storm in transportation is near and … not just there

Not a big fan of breaking headlines but certain technology highlights in the last years are starting to connect better then ever before. And it seems that visionaries and industry finally start to agree. We are witnessing major trends that will re-shape whole industries in a shorter period that we have ever experienced before. 

I am pointing at:

• Carsharing
• Electric vehicles
• Autonomous driving
• Machine learning

Carsharing has taken the market by surprise and is becoming more popular by the day. European providers like DriveNow and Car2Go address the daily transportation needs in the city while Drivy, Croove and SnappCar are taking a share from traditional car rental by using privately owned cars. These companies effectively reduce the number of cars on the streets, remove the burden of car maintenance and undermine the desire to invest 30K+ in buying a car. The idea is so good that carsharing is being eyed by established players such as EasyGroup, the company tasked to expand the EasyJet empire, or Europcar, the 2nd biggest European car rental company (via its investment arm).

Takeaway: expect less cars on the streets in the long term, less car sales and revenue from spare parts for car manufacturers.

Electric cars are around us and whoever has tried the i series BMW or Tesla, knows the driving experience if not better is at least at par with current cars. And the acceleration is unbeatable so I am definitely in :). But more importantly electric cars are simple, they have 18x less moving parts than a combustion engine car and thus need close to zero maintenance. And even if needed, I am in no doubt repairs will be done by a robot in the very near term. A major concern before, recharging, is becoming significantly less of a concern with battery life getting longer and charging stations growing in numbers.

The advantages of electric cars and wide acceptance of the public are being unmistakably recognised by car makers such as Daimler which recently announced its own Gigafactory. It came as a result of the acceleration of its electric car plans and backed by $11 bn. KUDOs should go also to Tesla which has pushed the whole car maker industry to move faster and bolder.

Takeaway: expect less demand for oil and gas, increasing uncertainty for energy companies, less revenue from spare parts for car manufacturers, job losses in car maintenance.

Autonomous driving and machine learning are no longer an innovation. Self driving cars are around us, make total sense and are here to stay. Machine learning as one of the ingredients of autonomous driving is being adopted so fast that it will soon be considered a commodity. Autonomous driving makes our roads safer, eases traffic and saves us tons of time. It is good not only for private use but also in public transport and moving goods. There are already autonomous driving luxury cars and truck trains on our highways but have you thought about autonomous driving buses? Because it won’t be long before you find yourself on one of those.

Takeaway: expect job losses in transportation e.g. professional drivers, even greater increase in efficiency in transportation and car sharing, further reduction of vehicles on the streets.

So what would our life look like in less than 10 years? I think something like this.

The rosy part: Commute in cities either by car, bus or rail will be driverless. Most vehicles will be electric. Very few people will own a car. The fee from A to B will vary based on provider, vehicle brand, transportation experience e.g. interior and entertainment options. It might even happen that cities abandon public transport and outsource it to private providers that offer autonomous fleets on demand. These fleets might well optimise the routes so that they do not follow a predefined route but drive commuters to their door.

Car manufactures will become vertically integrated fleet manufacturers and managers. New type of vehicles will emerge, many models will become obsolete and will be abandoned.

Technology providers like Google, Uber and other technology-first giants will enter the transportation sector, and will have an edge on autonomous driving technology over car manufacturers.

The not so rosy part: Professional drivers, mechanics, petrol station workers will become obsolete. Smaller car manufacturers will fight for survival, some brands might disappear. Garages will disappear. Energy companies will be seriously hit from lower than expected demand for oil and gas as well as investments in oil and gas exploration.

And to ease a bit the apocalyptic ending, in my next blog post you will read about my visit to Bielefeld, Germany and the outcome of the Founders Hack event.

You can find the rest of my articles either on LinkedIn or on my website: https://starkfounders.com. Enjoy!