Antony Currie, Olaf Storbeck & Kevin Allison:
The move toward autonomous, utilitarian on-demand cars would probably save many consumers a lot of cash on a product most of them rarely use. On average a car is driven for an hour a day, according to Morgan Stanley. That equates to a 4 percent capacity utilization, without even considering how many of the seats are occupied.
Shared cars with light shells, basic seating and a trunk full of technology, connectivity and entertainment could be especially appealing in cities. Replacing many of the 100,000 taxis and 900,000 private cars in New York City with a self-driving fleet with decent occupancy rates, for example, could be cheaper than using public transport, according to BCG.
Such changes are years away and some of today’s carmakers may well build these huge fleets. Either way, the companies that deploy the most units with the best software will win.
As technology becomes critical and costs for the shell of a car fall, carmakers that aren’t prepared could end up as little more than contract manufacturers supplying basic hardware or assembling parts for everyone from Google to Uber – a series of analogs for companies like Foxconn, which churn out iPhones and other gadgets on the slimmest of margins for customers like Apple which are far more profitable.