Autonomous travel disruption: Driverless vehicles to dominate domestic travel

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  Quantumrun Foresight
• April 29, 2022

Insight summary

The rise of autonomous driving technology is poised to reshape the way people travel, offering the potential for increased convenience and affordability that may make driverless cars a preferred choice over traditional air travel and public transportation. From door-to-door service to subscription-based features, this trend is set to disrupt not only long-distance travel but also the very nature of car ownership and urban planning. The long-term implications affect various industries, such as airlines and automotive manufacturing, transforming public transport services, altering urban infrastructure, and even influencing consumer behavior and environmental sustainability.

Autonomous driving disruption context

As autonomous driving technology improves over time, a study shows that customers and travelers may prefer using driverless cars over passenger airplanes, even for long-distance journeys. This preference stems from the potential for increased convenience and reduced costs. A study conducted in 2019 by Swiss bank UBS showed that the market for ride-hailing and robo-taxis could reach USD $2 trillion by 2030. The integration of autonomous technology into transportation services could lead to a significant shift in how people choose to travel.

Additionally, integrating autonomous technology could allow fares to drop by as much as 80 percent, making the services of ride-hailing companies more affordable than current buses and trains.  Even with such reduced prices, UBS estimates that a fully autonomous fleet in 2030 could still have a profitability margin of more than 30 percent as operation costs would also be lower. This trend could lead to a more accessible and efficient transportation system, challenging traditional modes of travel.

The utilization rate, or the period of time a fare-paying passenger uses a robo-car as represented by a fraction, could also be 10 times higher than private cars. This higher utilization rate indicates that autonomous vehicles may be in constant use, reducing the need for large parking spaces and potentially easing urban congestion. The implications of this shift extend beyond mere convenience; it may also have positive environmental impacts by promoting more efficient use of vehicles. 

Disruptive impact

According to a 2018 study by the International Journal of Aviation, Aeronautics, and Aerospace, at least 10 percent of airline travelers may transition to using driverless cars once they become fully informed of the benefits of using driverless vehicles versus planes. For example, driverless cars may allow long-distance travelers to avoid airport security checks, scanners, and mandated baggage limits. This trend could lead to a shift in consumer behavior, where the convenience and flexibility of autonomous vehicles make them a preferred choice over traditional air travel for certain distances.

Another distinct advantage is that autonomous cars could drop off a passenger from point to point, compared with renting a car from the airport to cover the last mile of a particular destination. This door-to-door service could redefine the way people plan their journeys, offering a seamless travel experience without the need to coordinate multiple modes of transportation. Aside from long-distance transport, this feature could also attract businesses that require reliable and efficient transportation for their employees or clients. Governments and urban planners may need to consider how this shift in transportation preferences could affect infrastructure and public transit systems.

Autonomous vehicles may also disrupt the transport industry in terms of car specification selection. German car manufacturer Volkswagen announced in May 2021 that it plans to one-day offer some subscription-based features in its electric vehicles, including self-driving capabilities, at about USD $8 per hour. As a result, one car could have multiple functions, depending on what the owner subscribes to, with software being a core component of how these vehicles operate. This trend could lead to a more personalized and flexible approach to car ownership, where individuals and companies can tailor their vehicles to specific needs and preferences.

Implications of autonomous travel disruptions

Wider implications of autonomous travel disruptions may include:

• The airline industry ordering fewer planes and offering fewer domestic routes as more passengers opt for using driverless vehicles, leading to a potential reshaping of the domestic travel market and a shift in airline strategies.
• Municipal and state/provincial governments being forced to redesign urban traffic and highway infrastructure to accommodate the increased use of autonomous travel, likely resulting in the creation of dedicated lanes for autonomous travel and a reevaluation of city planning principles.
• Public transport services forced to invest in upgrading their bus and train/subway fleets with autonomous functionality to better compete with autonomous ride-hailing services, leading to a transformation in public transportation offerings and potential collaboration with tech companies.
• Increased traffic in select urban centers since the reduced cost and increased ease and productivity of autonomous car travel may incentivize increased travel overall, leading to new challenges in managing urban congestion and transportation efficiency.
• Automotive manufacturers of autonomous vehicles increasingly integrating car-sharing and ride-hailing services into their operations, leading to a shift in business models and the emergence of new partnerships between traditional manufacturers and tech companies.
• A shift in labor market demands as the need for human drivers decreases, leading to potential job displacement in the transportation sector and a need for retraining and skill development in emerging fields related to autonomous technology.
• Changes in insurance and liability regulations as autonomous vehicles become more prevalent, leading to new legal frameworks and potential challenges in determining responsibility in the event of accidents or malfunctions.
• Enhanced focus on cybersecurity and data protection as autonomous vehicles rely on complex software and connectivity, leading to increased regulations and standards to ensure the safety and privacy of users.
• Potential environmental benefits through more efficient use of vehicles and reduced need for parking spaces, leading to optimized urban land use and potential reductions in emissions if paired with electric vehicle technology.
• Changes in consumer behavior and lifestyle as the accessibility and affordability of autonomous travel enable new ways of living and working, leading to potential shifts in residential patterns, work arrangements, and overall quality of life.

Questions to consider

• Would you prefer riding a driverless car over using planes for long-distance journeys?
• Would you be willing to have subscription-based features on your electric vehicle?