I was at the consumer electronics show in Las Vegas last week. While inside was the Faraday Future launch, Volkswagen apologies (and the Budd-e), and the host of interior bucks and gesture interfaces, it was actually something outside of the show halls that really intrigued me.
Anyone who’s visited Vegas will be aware of the ‘small/far away’ factor which means you make the ‘let’s walk to MGM it’s really not that far away’ mistake only once. Because of the scale of the Casinos, distances are much greater than they appear. So you take cabs everywhere.
The ride I took from the airport after arriving in the city literally scared the hell out of me, and I’m not easily unsettled in a vehicle. So, like most of the 170,000 other CES attendants, I then used Uber during the rest of my trip. Everyone’s private driver has just launched in Vegas and was operating on a discount pricing scheme which meant that – most of the time – it was a no brainer choice over regular taxis.
The cars were nicer, and the drivers appeared a little less unhinged when compared to Taxis, too. One Uber driver I was chatting with illustrated the appeal the company offers. David took me from Faraday launch event to my hotel at the Hard Rock, in his family’s Honda Odyssey. He works as a bio-scientist out in the Nevada dessert during the day, but supplements his income by working as an Uber driver some evenings. As he put it “I go home, get the kids in bed and then instead of just sitting and watching TV I can go and work for three hours and earn extra money. And if I don’t feel like it, well then I don’t have to sign on.”
The appeal of Uber for drivers today – what about the future car owner?
Let’s think about David’s approach in the context of the driverless, future car. Uber’s openly said that once driverless cars become viable it’ll dispense with the drivers and just buy/operate its own driverless vehicles because if it doesn’t have to pay a driver it will be able to offer you rides at much lower rates. This approach has led several commentators to suggest driver-less fleet operator like Uber will look for the cheapest, lower-common denominator approach to the vehicle which maximises practicality and has little room for design frippery or differentiation.
Looking at the current UberX, Exec, uberXL, Uber Black offering and I’d say that’s unlikely – the company’s always going to want to offer different sized vehicles and levels of experience/luxury – because customers have different desires and needs based on circumstance, location, time of day.
Let’s look at it from the driver/car owner’s perspective though. Right now we’re discussing how driverless capabilities of the future car present an opportunity for you to work, be online or more social with your passengers as you move from A-to-B. But in the context of Uber and the way drivers like David are using it as an income top up, the biggest appeal driverless cars could have is their ability to earn their owners money by operating in an uber-like driverless car pool whenever they’re not using it.
My Vegas Uber driver, David, could actually go back to spending time with his wife or watching TV, while his Odyssey is out earning him money. What’s more, it could run all night and won’t be limited by his own fatigue as the evening draws on.
I see two interesting outputs in this scenario. Firstly, it could actually drive ownership of premium brand vehicles. There’s an assumption that everyone gives up car ownership in the future because we all live in mega cities and because financially it just doesn’t make sense to have your own, under-utilised and expensive-to-run vehicle.
I’m sceptical about that for two reasons. Most of the ‘societal urbanisation’ data is badly interpreted. Most people who live in urban areas actually don’t live on London’s Oxford street, they live in a mid-sized city suburb where transit is poor and it seems inevitable the car will play a role for a long time to come. On-demand driverless cars might cover some bases, but not all. So ownership will still play a big role – we’ll just expect our cars do more for us.
Sitting alongside this is the on-going covetable qualities that every brand from Volkswagen up, through BMW, to Tesla and beyond to Rolls-Royce and Ferrari has on the typical consumer. So what if you can still pick your car exactly as you want it, have it outside your house when you need it but recoup a chunk of its cost by letting others use it when you’re not? I reckon that’s a more appealing idea to many. It’s something brands like Ford and Mini are already dabbling with – and it should provide an opportunity for premium car brands and those looking to enter the automotive space.
BMW is letting some Mini buyers opt their car into their Drive Now service, offsetting their monthly finance payments
Which brings me to my second point, which is that while we’ve all been reading that it’s Uber who’ll own the future of mobility and is likely to disrupt the car industry most obviously, I think there’s an opportunity for a new autonomous car sharing economy platform – that splices the best of what Airbnb offers (ability to pre-book, pick your vehicle, choose your price point) with Uber’s delivery and driver/rider ratings model, which ultimately allows the vehicle to earn its owner money. Formative versions of what I’m talking about already exist. But the game changer? I wouldn’t be surprised if such a platform was an integral part – and a big selling point – of any Apple or Google car offering in the future.
by Joe Simpson