From the Tesla Model 3 to the Chevy Bolt, a new crop of longer-range, more affordable electric and plug-in hybrid cars are beginning to appear on our roads. Add the arrival of self-driving cars into the mix, and we may be approaching the most radical transformation of our species’ preferred means of getting around since the mass-adoption of the gas-powered car.
That said, some major questions remain, and the biggest of them all may be whether private car ownership will continue to be the dominant model, or whether we’ll start to see Transportation as a Service (TaaS) models replacing the giant hunks of metal that currently take up so much space on our driveways. In other words, if I can hail a luxurious, electric, autonomous vehicle at a moment's notice, will I still want or need to own a chariot of my own?
There are two schools of thought to this. First, the believers in disruption: Given the lower running costs and minimal maintenance, electric vehicles are close to an economic tipping point where they beat out gas-powered cars on a simple dollar-for-dollar basis. With the arrival of autonomous vehicle technology and app-based ordering, these vehicles don’t just become cheaper to drive per mile — they also become capable of generating their own revenue, practically 24 hours a day, without the need to even pay for a driver.
Saving money down the road
The economic advantage, say those bullish on the TaaS vision for our future, will mean that private car ownership just simply won’t be able to compete. In fact, a recent report claims that self-driving cars will make up 95 percent of all car miles driven by 2030. The report, by Tony Seba and James Arbib for San Francisco think tank RethinkX, claims that for the average consumer, a “subscription to a TaaS model could represent savings of $5,600 per consumer per year, adding up to $1 trillion in additional disposable income in the U.S. alone by 2030."
That’s a pretty compelling number. After all, we car owners spend an awful lot on gas, new tires, oil changes, road tax and car loans. Who wouldn’t want to free up that cash in exchange for convenient, low-cost access to zero-emission mobility as a service?
Cars are more than economics
Cars are more than an economic decision. They're an extension of our personalities and a symbol of freedom or status, like this Mercedes Benz autonomous concept car. (Photo: VanderWolf Images/Shutterstock)
That said, bold predictions for our future don’t just have economics to contend with — they are facing cultural norms too. After all, none of us make our purchasing decisions on a purely rational, economic basis. And our attachment to — even love for — our cars is a textbook example of economic irrationality.
Many of us own our cars because we want to, not because it makes economic or practical sense. If we made our transportation decisions based on economics, not desire, we’d be riding mass transit, biking, driving a Honda Fit or a used Prius — not frittering away money on 6 year loans for oversized SUVs.
Besides the significant technical and legal barriers, there's this question: Is a country in which the best selling “car” is the Ford F-150 pickup truck really ready to give up ownership in favor of a robotic taxi service? And will it happen as fast as RethinkX is projecting? It’s worth noting, for example, that other mainstream analysts like Moody’s put the autonomous vehicle takeover at many decades from now.
The questions to watch out for, I suspect, are as follows:
1. Is the need to own a car generational, or will younger people be more open to service versus ownership?
2. Will the mobility benefits of TaaS for boomers convince a generation that grew up listening to songs about the automobile to give up car ownership?
3. Can TaaS models scale to provide convenience and access, even in suburban and rural communities built for the privately-owned motorcar?
4. Just how strong is our emotional attachment to the car? Does the romance of the open road still hold sway for a society that can’t take our eyes off our phones?
5. Will TaaS models undermine mass transit, walking and biking, or will they augment it?
6. Will other countries, where car ownership never became the norm, leapfrog the ownership model?
Will our car obsession survive disruption?
As with most predictions of the future, RethinkX’s report is more about exploring possibilities than making rock-solid predictions. There are just too many variables to know for certain what the future brings. Even the report’s authors, for example, warn that their scenario relies on the imminent arrival of fully autonomous vehicles. If regulatory and/or technical challenges mean that adoption is slower than expected, then that will obviously push back the date of predicted disruption.
Despite early signs that our love affair with car ownership may be a relic of a by-gone era, a quick glance at the highways of any major metropolis will tell you that the privately owned motorcar isn’t likely to relinquish its hold on us without a fight. After all, few consumer goods have had such a profound impact on our psyche, our society and our way of life.
Whether that impact can survive the coming disruption remains to be seen, but one thing is certain: The cars of tomorrow will be radically different from the vehicles we drive today. Exactly who owns them, and how we gain access to them to get where we need to go, is a question that we will still need to navigate.