The car of the future is shared and driven by software

Thoughts By 8 months ago

There are many visions on where mobility is going and how transportation will evolve. Which will prevail? Where will the disruption occur?

I suspect the car I drive now, will be the last one I own.  The car industry and how people get around is about to be fundamentally disrupted, as will every industry associated with transportation. This was a clear theme presented by Deloitte and most of the leading car manufacturers that presented at CES 2017 in Las Vegas.

Over the past few years we have already seen the acceptance of ride and car sharing economies profoundly impacting the way we use vehicles and how urbanites get around. The smartphone and Apps have played a key role in this.

From 2017 and beyond it is predicted that the smartphone will be the key to everything related to the car, and that mobile technology will be the driving force for consumer adoption of shared transport. If autonomous vehicles are adopted as quickly as other technologies, like smartphones and the internet, Deloitte predicts that significant change will begin within the next five years.

Finland’s capital already has an ambitious initiative in motion to make it unnecessary for any city resident to own a private car by 2025, by applying Netflix’s business model to urban transport. Helsinki’s vision represents the next revolution in mobility, Mobility as a Service (MaaS) where a digital platform integrates end-to-end trip planning, booking, ticketing and payment services across all modes of transport, both public and private. Using an app to plan and pay for all transport within the city – from train, taxi, bus, car share or bike share (or a combination thereof), Helsinki residents can already pre-pay for all transport services as a monthly mobility subscription, or pay as they go using a payment account linked to the service.

As urban density continues to grow, MaaS provides an alternative way to move more people and goods in a way that is faster, cleaner and cheaper. It’s therefore not surprising that Helsinki is not the only city to be looking at this emergent movement. Paris, Gothenburg, Vienna, Los Angeles, Singapore and Barcelona have all piloted a local version.

In the US a family spends around $9k US per year on the car, more than healthcare and food combined. However, with the rise of services like Uber, one ride sharing vehicle is replacing eleven cars on the road, even with a low utilisation rate of 15%. With the introduction of autonomous cars there would be a much higher utilisation rate, leading to one ride share car replacing over 70 cars on the road.

My prediction is that there will be a tipping point within the next five years where the proliferation of autonomous cars and ride sharing will mean it will be cheaper to use MaaS models of urban transportation than owning and running a private car, resulting in a decline of car ownership. This is a fundamental change that will disrupt many businesses associated with vehicles. It will however open up opportunities, such as entertainment in the car as all the passengers eyes are freed up.

Every car manufacturer that was showcasing at CES is working on autonomous, electrified and connected cars. The disruption in the industy has car makers trying to evolve from highly vertically integrated product companies, to technology companies. However, they are not structured for agility and so are openly partnering with smaller groups and looking outside for
software and mobile technology.

“No single Player can do it all – Brand, Distribution and Partners will become the winning formula”
– John Casesa, VP Global Strategy, Ford

Smart Device Link (SDL) Car Manufacturers are forming an alliance to create a vision to gain scale and uniformity for app developers. The announcement of a joint consortium between Ford and Toyota is an attempt for car makers to protect the dash board from Silicon Valley (Apple/Google). Development of car based technologies must include the big 3 in the roadmap and connect to the dashboard – CarPlay, Auto and the consortium.

Looking ahead – the roadmap to the future city

Cities must evolve to be ready for the current adoption of ride and car sharing (places to stop), and for entirely autonomous fleets. Changing cities, digging up streets and redesigning is difficult. So sensors should not be invasive.

Some of the solutions showcased at CES include using the car as the sensor and data collection mechanism, instead of in-road sensors.

  • Use of smartphones and apps to identify services (fuel, parking) and passenger location
  • Camera’s, Lidar and sensors outside the car to live map the streets
  • Acceleromoters in the car to identify road conditions (pot holes)
  • Sensors in the car to monitor passengers (eye tracking, emotion and distraction alerts)

Markets such as India, Africa and Latin America are likely to be secondary to the US, EU and Asia. I predict Australia will adopt more wide-scale connected car technologies from mid to late 2017.

But it’s clear that we’re on the threshold of an era in technological innovation that has the potential to fundamentally alter not only mobility and how we get about, but cities and ultimately, the quality of our lives.


  • Stephanie Mirabella

    Great article Josh!